1. Decentralization in Pakistan and Implications for Climate Change Financing Naseer Memon Chief Executive SPO

2. Pakistan has a history of over-centralized power structure. Federal government controlled both legislative powers as well as resources. Most of the taxes are collected by federal government and resources are transferred to provinces through National Finance Commission Award every fifth year. Provinces can barely finance 16% of their current expenditure. Nearly 91% domestic revenues are generated at federal level. Whereas provinces and local governments generate only 6% and 3% respectively. Context-power imbalances

3. 7th NFC Award increased share of provinces from 45% to 56%. From next year it will further rise to 57.5%. Under the constitution of 1973 a Concurrent List was introduced having 47 subjects for which both federal and provincial governments could legislate. Provinces considered this list as encroachment in their domain. 18th Constitutional Amendment enacted on 8th April 2010 abolished the list and empowered provinces. 7th NFC Award and 18th Amendment are landmark achievements of democratic process yet undergoing teething problems Context-18 th Constitutional Amendment

4. Federal Public Sector Development Program is being curtailed and provinces now have greater authority and resources to plan and execute development projects. Environment Ministry has also been devolved to provinces. Environment subject is being further devolved to metropolitan corporations within provinces A new ministry of Climate Change has been established in the Federal government. Federal Cabinet has recently approved “Climate Change Policy” for the country Subsequently a National Action Plan is being developed Post 18 th Amendment Scenario

5. Provinces do not consider climate change as priority Development projects are neither designed nor implemented with climate change perspective Environmental Impact Assessment is often ignored in public sector projects in spite of legal requirement. Ill-designed and poorly executed infrastructure projects aggravated recent flood disasters Provincial governments require capacity to manage climate change portfolio from planning to execution. National Action Plan would form the basis for future course for provinces to embark upon a climate change adaptation and mitigation program Post 18 th Amendment Scenario

6. Currently MoCC at Federal Government has no extension arms in provinces, where actual implementation will take place Dysfunctional local bodies system is another missing link to benefit communities from any climate related financing. Lack of formal effective coordination mechanism between MoCC and provincial governments As a coordination body, MoCC consults with provinces but has no legal authority to direct provinces. Provinces are ambivalent towards federal government bodies and reluctant to accept their role in devolved subjects Post 18 th Amendment Scenario

7. A comprehensive framework need to be developed with consensus to steer the process Transition phase of 18th amendment has brought several possible developments on climate change related work to screeching halt Absence of institutional relationship between federal and provincial bodies raises unanswered questions In this scenario management of climate-related financing will be a daunting task. Post 18 th Amendment Scenario

8. Bridging crevasse between federal and provincial governments to develop a consensus climate change program and National Action Plan Consensus among provinces on criteria for tapping climate change related finances Segregation of climate adaptation/mitigation projects from development projects Consensus on institutional arrangement for monitoring and reporting of climate related financing Developing institutional capacity within provinces to develop and implement climate change related portfolio Challenges

9. Political ownership in provinces after consensus decisions on climate change portfolio Opportunities for CSOs and communities to participate and benefit from climate change financing Grassroots level planning and monitoring adding to sustainability Private sector contribution through public-private partnership in a less cumbersome environment at provincial level Provinces having direct access to climate change financing Opportunities

10. Thank You