ASSESSING INVESTMENT & FINANCIAL FLOWS FOR CLIMATE CHANGE: INTRODUCTION Bay Gardens Hotel, 22 May 2009, Castries, St Lucia

PROJECT CONTEXT Hernan Carlino, Argentina

Why consider climate change in development planning  Climate change impacts different sectors, cross-cutting  If not addressed in long-term action, climate change costs will be high Countries may want to position themselves  To ensure that the negotiation outcomes are coherent with national interests & priorities  To be able to participate in the mechanisms that will be created Why consider climate change in planning

Importance of planning tools  To identify national priorities  To facilitate cooperation among different ministries  To build strategies to deal with climate change  To create a coherent base of information of climate change impacts on and opportunities in key sectors These points are addressed in the project Project context

Why an I&FF assessment Objective of this session  Introduction to the project and its 3 stages  Introducing the concept of I&FF assessments  How to proceed: Workplan preparation

PROJECT STAGES & SUPPORT Bhujang Dharmaji, UNDP

Sequencing of national activities Pre-workshop preparation (2 months) National workshop on Bali Action Plan, national issues Assessment of I&F flows to address CC mitigation/adaptation options for up to 3 key economic sectors (6-8 months) National workshop to present results, policy options Key line ministries engaged Key sectors identified National issues papers prepared National workshop on: Bali Action Plan Adaptation, mitigation, technology transfer, financing + LULUCF Key sectors UNDP methodology on assessing I&F flows Backstopping from regional centres of excellence Update on Bali Action Plan negotiations I&F flows assessments presented Post-2012 preparation Preparation stageImplementation stageReporting stage

Define & agree  National objectives/goals  Key sectors/scope  I&FF team  Capacities/needs: methods, information…  Institutional arrangements  On workplan/budget  Available scenarios Preparation stage (1- 2 months)

Conduct I&FF assessment in key sectors selected by the country using the UNDP I&FF methodology and the sector specific guidance & reporting guidelines Guidance & procedures for  Documentation & archiving  Spreadsheet management  Quality control & quality assurance procedures Implementation stage (5 – 6 months)

 Ongoing activity, not starting at the end of the assessment  Define outcome (decision making tool, policy tool), target group (internal/external) to draft report  Ensure good drafter for preparation of report(s)  Purpose: documentation of steps and processes for interpretation of outcomes & for later follow-up work Reporting stage

Support to the 3 stages of the project  Work plan guidance  Methodological guidance  Reporting guidance Regional Centres of Excellence  Training on assessment of I&FF  20 days of technical backstopping incl.  Review of workplan, draft and final assessments  Guidance on scenarios, data, approach Guidance available + support provided

Knowledge platform Public space  Provides database of documents on climate change  Provides information on the project  Dynamic: Users can upload resources; results and updates “pushed” to site visitors Member space  Faciliate sharing of experiences in groups (country groups, thematic groups)  Private access for national project activities

THE I&FF ASSESSMENT Angel Menendez, ITDT

Investment Flow  An investment flow (IF) is the capital cost of a new physical asset with a life of more than 1 year  Limited to new physical assets, because of climate change implications for the duration of the operating lives of the facilities & equipment purchased Definition I&FF and O&M

Financial Flow  A financial flow (FF) is an ongoing expenditure on programmatic measures; financial flows encompass expenditures other than those for expansion or installation o few physical assets.  Primarily ‘operation & maintenance’ (O&M) costs: salaries, raw materials, equipment maintenance, depreciation, utilities, rent, insurance, taxes etc. Definition I&FF and O&M

Operation & Maintenance (O&M) costs of new physical assets  The physical assets purchased with investment flows will have operation & maintenance (O&M) costs associated with them  Can vary considerably among investment flow types & have a significant effect on the total cost of an investment Definition I&FF and O&M

Goals  Development of national policy options to address climate change in key sectors  Increased capacity to co-ordinate negotiating positions at national level & participate in the UNFCCC process Outcomes  National awareness raised  Investment & financial flows assessed for key sectors  Web-based knowledge platform populated Project goals & outcomes

What questions does the I&FF assessment help answer?  What are the adaptation/mitigation options in certain sectors in the next 25 years?  Who is investing in the sector/major players & sources?  What shifts/increase in I&FF will be needed in the sector?  What will be the overall needs for additional I&FF? Why an I&FF assessment?

IMPORTANT ISSUES FOR WORKPLAN DEVELOPMENT Angel Menendez, ITDT

How to scope a sector  Determine specific subsectors that will be included  e.g. within agriculture: crop cultivation, livestock, fishing …  Determine which processes, activities, entities and geographic regions are included in the sector Define scope of the sector

Water Health Tourism Forestry Energy Agriculture GLOFs Electricity Oil/gas REDD Livestock Coastal zones Water-borne diseases Mangroves Bioenergy Energy plantations Biofuel Transport Food security Hydropower Potential sectoral overlaps Define scope of the sector

 Any of these analytical approaches can be used to develop scenarios, & associated streams of annual I&FF and O&M costs  A suitable sectoral model  A sectoral plan  A projection of sectoral trends  The current situation in the sector  A combination of those approaches Select analytical approach

Sources of information Sources of information include  National Communications (1 st, 2 nd )  National strategies & plans  System of National Accounts (SNA)  Systems of integrated environmental and economic accounts (SEEA)  etc.

What is a scenario?  An internally consistent & plausible characterization of future conditions over a specified time period  A baseline scenario reflects business-as-usual conditions, describes what can occur without new policies to address climate change  A mitigation scenario incorporates measures to mitigate GHG emissions  A adaptation scenario incorporates new measures to respond to the potential impacts of climate change Scenarios

Team composition

Reporting  Sectoral results are compiled so that mitigation/ adaptation investments for each source & investment entity, & for each year, can be compared across sectors & across mitigation/adaptation  “Reporting Guidelines for the Assessment of Investment & Financial Flows to Address Climate Change” contains spreadsheets for this  Define purpose & target group to prepare report accordingly

NEXT STEPS Bhujang Dharmaji, UNDP

Workplan development Workplan  Outlines clearly how the I&FF assessment will be done during the following 6-8 months  Defines clearly  The scope of the sector  Data needs, availability and gaps  Proposes the organisational framework how the assessment will be done

I&FF training The I&FF training  Is a technical training for the country teams of each selected key sector  Will be conducted by the Regional Centre (PASS, ITDT, TERI, Oxford Consultant)  Will provide hands-on training how to conduct the I&FF training in the selected national key sectors through the sector teams

Steps in the Sectoral Assessments of I&FF to Address Climate Change

Q&A CLARIFICATIONS ? ? ? ? ? ? ? ? ?