ASSESSING INVESTMENT & FINANCIAL FLOWS FOR CLIMATE CHANGE: INTRODUCTION

1. ASSESSING INVESTMENT & FINANCIAL FLOWSFOR CLIMATE CHANGE: INTRODUCTION Bay Gardens Hotel, 22 May 2009, Castries, St Lucia

2. PROJECT CONTEXT Hernan Carlino, Argentina

3. Why consider climate change in planning 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

4. Project context 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

5. 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

6. PROJECT STAGES & SUPPORT Bhujang Dharmaji, UNDP

7. Sequencing of national activities Preparation stage Implementation stage Reporting stage National workshop on Bali Action Plan, national issues National workshop to present results, policy options Assessment of I&F flows to address CC mitigation/adaptation options for up to 3 key economic sectors (6-8 months) Pre-workshop preparation (2 months) • 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

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

9. Implementation stage (5 – 6 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

10. Reporting stage 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

11. Guidance available + support provided 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

12. 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

13. THE I&FF ASSESSMENT Angel Menendez, ITDT

14. Definition I&FF and O&M 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

15. 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.

16. 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

17. Project goals & outcomes 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 http://www.undpcc.org/

18. Why an I&FF assessment? 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?

19. IMPORTANT ISSUES FOR WORKPLAN DEVELOPMENT Angel Menendez, ITDT

20. Define scope of the sector 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

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

22. Select analytical approach • 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

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

24. Scenarios 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

25. Team composition

26. 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

27. NEXT STEPS Bhujang Dharmaji, UNDP

28. 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

29. 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

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

31. Q&A CLARIFICATIONS ? ? ? ? ? ? ? ? ?