Hunting for the Billions: Unlocking and Scaling Climate Finance in Asia-Pacific Highlight UNDP broader approach of mainstreaming finance, country experiences, opportunities and challenges and lessons.   Opportunities and challenges for mainstreaming CC finance in investment planning and budgeting processes: key insights from practitioners Synergies and alignment between different tools and frameworks Practical challenges and solutions (approaches and tools) Institutional entry points Engaging with Ministries of Finance Particularly in relation to the budget Glenn Hodes Climate Policy & Finance Specialist

Context There is often a large disconnect between NDCs & action plans linked to the Paris Agreement and realistic financing --> creates an implementation gap. While climate finance (both int’l and domestic) is expected to increase, demand is likely to far outstrip supply. Tracking and CC budgeting can help prioritize scarce resources and fill gaps: Assessing gaps predicated on clear baseline, estimate of future available financing. Better management of cc spending correlated to more equitable, responsive actions. Create indicators and build knowledge of co-benefits to low-carbon investments What gets monitored and measure is more likely to get done

Mainstreaming CC into public financial and economic management The reveal The reforms The integration Theory of change Advocacy for Demand & Accountability

The integration The reforms The reveal How well is expenditure/investment aligned? Climate Public Expenditure and Institutional Review Private Climate Expenditure Review The reveal The reforms The integration Diagnostics

Climate Public Expenditure and Institutional Reviews (CPEIRs) – an Atlas

Viet Nam Private Climate Expenditure Review Builds on 2015 CPEIR. Second study undertaken globally & first in Asia. Launch Q3 2018 Coverage: EE in steel, cement, paper, sugar production RE: hydro, wind, solar, biomass Market/investment survey methodology: support provided X actual investments covering years 2010-15 Energy efficiency ODA loans and guarantees: USD 106 mm; grants: USD 110-112 mm Investments: USD 630 mm - 170 mm in steel production, 227 mm in cement; 119 mm in paper and 127 mm sugar. (37% of total needs estimated) Renewable energy ODA loans: USD 420 mm; grants: USD 15.5 mm Investments: USD 9.75 bn 9,15 billion on hydropower, 428 M on wind, 170 mm on solar water heaters 2nd study globally since OECD published its review of South Africa in Sept 2017. It is 1st such study in Asia and 1st for UNDP globally It for us, it is learning by doing since this is 1st such study for UNDP globally. It provides example for future UNDP reports for Ecuador and Thailand. Complements Climate Public Expenditure Review in 2015 done by MPI, UNDP and World Bank. PCEIR focuses on years 2010-2015 and the following sectors that represent 52% of GHG emissions in VN: EE in steel, cement, paper, sugar production RE: hydro, wind, solar, biomass We initially planed to review finance flows but had to skip this aspiration due to difficulty in accessing data. We instead went into detailed review of investments that have been made by private companies, SOEs, and to a limited degree by households – we identified what has been done and interviewed companies to define the costs of these investments or typical costs (in case exact data was difficult to access). We then compared this data with support made available for mitigation actions and energy sector reform. Final publication will be launched by MPI in March 2018. Final draft is ready for cross-check with DPs,

The integration The reforms The reveal Budget tagging, call circulars, planning and public investment guidelines How to better allocate and track resources The reveal The reforms The integration THAILAND Capacity building on CC-CBA, and walking stakeholders through mainstreaming entry points as part of budget cycle. Stock take found only 1 dept systematically using CBA. Strengthening project design and appraisal processes within MOAC to integrate CC into budgeting guidelines. Supporting MOAC to develop more bankable budget proposals based on MCA & CC-CBA.

Tracking expenditure and budget tagging - enabling governments to make more informed decisions & prioritize CC investment Climate Budget Tagging (CBT) is a tool for monitoring and tracking of climate-related expenditures in the national budget system. It enables public scrutiny on government’s and donors’ spending on tackling climate change issues strengthening accountability and transparency:  It provides comprehensive data on climate-relevant spending: yes and no, it actually depends on the comprehensiveness of the Public Finance Management Information System (PFMIS) comprehensiveness, if the country has funds outside the budget or if Overseas Development Assistance is not captured by the PFMIS, then it will not be comprehensive. It is as good as the government’s PFMIS level of maturity.   It is a key starting point in that process but alone it is not enough at all.  Tagging needs to be complemented by costing of plans/needs assessment, benefit cost analysis and other planning tools to help do that. Otherwise, it will be mostly about reporting and understanding the climate dimension of existing public investment programs. Also, tagging should as much as possible involve line ministries as they are  the one ultimately doing the sector plans. Tagging is a good occasion to get them think about CC under supervision of MOF  and Planning. If they are not involved and it is just an exercise led by Ministry of Finance to do it on its own, the impact is not as valuable. And line ministers  will not think about climate change and how it is relevant to their interventions. Ministry of Finance can not finance climate relevant activities if sector ministries do not submit climate mainstreamed projects.    Again, it is a first essential step towards that. I will send you our joint report on accountability of climate finance which explains what are the opportunities and challenges on that path but tagging alone can be tricky to achieve proper accountability.

County Experiences Cambodia: ODA database being tagged as part of integrated national climate change financing framework and tracking implementation of international commitments. Bangladesh: Climate Fiscal Framework (2014) proposed a climate expenditure tracking framework to be applied to all line ministry submissions plus on-budget ODA. Indonesia: introduced mitigation tagging (Low Emission Budget Tagging & Scoring System) in 2014: key ministries track resources spent on achieving -26% GHG reduction target by 2020. Regulatory reforms to mandate (Regulation 143/PMK.02/2015). Adding adaptation tagging and integrating into KRISHNA system. Nepal: one of first countries to adopt climate budget tagging in 2012, now done for 4 FY years in a row. Upgraded system to allow real-time expenditure tracking & reporting.   Pakistan: Adopted climate budget coding and expenditure reporting method and processes. Testing first real-time CC budget reports. Philippines: 5 consecutive years of experience with mandated CC budget tagging in for all gvt. entities. Vietnam: Expanding tracking and integrating DRR together with CC. One of first countries to initiate private climate finance tracking

The integration The reforms The reveal Climate Change Financing Framework & MTEF integration NDCs/LEDS investment priorities fully integrated into annual & medium term budgets and development financing strategies The reveal The reforms The integration In Cambodia, CC budgeting guidelines were introduced by the Ministry of Economy and Finance linked to the CCFF. This required an analysis of the climate change benefits that can be obtained from key public investments. The Ministry of Agriculture and Forests (MAFF) screened and appraised its climate-relevant programmes, taking into account also gender-responsiveness. As a result of new integrated guidelines, it developed new extension services delivered by state agricultural departments specifically tailored for women. These programs pay attention to domestic and productive needs in planning water-supply infrastructure and using renewable energy for water supply. MAFF found that that its programmes could deliver an additional 15 to 50 percent more benefit, when climate change is taken into account. These benefits and marginal costs have been factored into subsequent annual and medium-term budget proposals to the MOEF. Thailand -

What is a CC Financing Framework (CCFF) ? An integrated, strategic framework to better mobilize, manage and target climate finance so as to bridge existing finance and policy implementation gaps. Outlines a reforms road map to enhance fiscal planning and budget management by systematically integrating CC and improving inter-ministerial coordination. Supports decision-makers to strengthen capacity of country systems to deliver climate finance in a more effective, equitable, and accountable way. A CCF can be understood to be a framework for a whole-of-government approach that engages all key stakeholders to better mobilize, manage and target climate finance. Following a CPEIR, these frameworks assist governments to manage and track climate finance and better prepares public finance systems to utilize national and international finance in the most efficient and effective ways. CFF’s have been carried out in: Indonesia, Bangladesh, Cambodia

Finance for NDCs/national CC responses CCFF Work Flows NDC/SDG13 national targets

CC Financing Frameworks New! Guidance Note

The integration The reforms The reveal Advocacy monitoring, oversight & policy feedback Advocacy for demand & accountability Climate budget expenditure reports Advocacy briefs Civil society – collaborative research on climate investment impact Parliament & Media engagement The reveal The reforms The integration

Budget for Climate Change UN Helps Ministries Budget for Climate Change parliament Pakistan brings cutting-edge approaches to international discussions on climate change finance