Climate finance for real – Learning from country experiences

Since the climate change negotiations in Cancun in 2010, policy-makers and analysts are focused on the $100 billion buzz: If agreements are met, this amount would be available by 2020 for developing countries to promote green development with low carbon use (‘mitigation’) and to cope with the ever harsher changes in climate patterns, including increased and more frenetic impact of natural disaster (’adaptation’). Today, one of the big question marks is how developing countries might be able to manage these resources (‘climate finance’) in an effective way. And even more importantly, how countries can actually design, implement and account for a climate-resilient low-carbon development, independently on how it is actually financed, be it through external or domestic resources.

In a very inspiring dialogue hosted last week by the Honduran government in Tela, a beautiful city at the Caribbean coast, more than 90 policy-makers and practitioners from 26 countries discussed their experiences with effective climate finance management. Working at the interface of climate change and development policies, these champions from Latin America and the Caribbean, as well as Asia and the Pacific, shared knowledge and innovations in three key areas:

  • How can result-oriented climate change strategies and actions plans be designed and implemented under the umbrella of development policies, in particular at the level of critical sectors?
  • How might ministries and other national actors relevant to climate change priorities be coordinated, for example through inter-institutional committees?
  • How can climate finance be managed within national and sector budgets, and what are the experiences with innovative financial mechanisms such as national funds?

Working around lessons systematized ahead of the dialogue (see regional summary with country examples here [pdf]), the participants took a fresh perspective on the climate finance narrative. Discussions in Washington DC and Europe tend to struggle with understanding national and local contexts. In contrast, the Tela exchange involved experts from the ministries of Environment, Finance, Development Planning and External Relations, who shared the good news: There is a lot of progress made already in pursuing consistent policies and breaking down the silos of different government branches. This is certainly a major transformative energy which merits further support and engagement by the international community.

At the same time, the Tela Dialogue came up with a strong sense that it is not only countries needing to invest in their capacities, for example when it comes to monitor, report and verify (MRV) climate change priorities. Also global and bilateral providers are encouraged to leave behind the comfortable blueprint discourse and break down their own in-house silos. Above all, the international community urgently needs to learn from national and local experiences of what works and what does not work.

Indeed, the climate finance agenda can benefit from the lessons which have been learned, sometimes painfully, around effective development cooperation. At the very least, for developing countries around the world, it simply does not make sense to continue disconnecting climate change and development for the sake of the increasingly unproductive discourses at the global level. Too immediate are the opportunities to achieve both climate change and poverty reduction objectives in a large number of countries. And too high will be the costs if ‘policy as usual’ continues distorting country efforts and preventing global and bilateral contributors to engage with them in a meaningful way.

With a view to the weeks and months ahead, the government experts agreed to build up a climate finance community engaging practitioners across ministries and other national institutions, to enable continuous knowledge exchange among peers (check Tela conclusions here). Further analytical work will be conducted on country experiences, as well as barriers to effective climate finance management at the levels of both countries and external providers. With these inputs, the participants plan to gather again for focalized discussions on specific challenges and opportunities, such as the use of national funds, the country-tailored implementation of MRV, the setup of national coordination mechanisms, and others.

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Check the full summary of country experiences discussed in Tela here [pdf]. The conclusions can be seen here.

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Mapping Multilateral Support to South-South Cooperation in Latin America and the Caribbean: Towards Collaborative Approaches. UNDP, 2011. Download PDF (English version) (Versión en Español)

 

IDB  Magazine - Regional Public Goods: An innovative approach to South-South Cooperation, 2014 version here in English and Spanish.

Using Knowledge Exchange for Capacity Development: What Works in Global Practice? KDI and The World Bank Institute

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