Use OF COUNTRY SYSTEMS TO Manage CLIMATE CHANGE paul Steele, UNDP

1. Use OF COUNTRY SYSTEMS TO Manage CLIMATE CHANGE paul Steele, UNDP

2. Overview • County systems • Climate expenditure/finance • Why use country systems to manage climate finance • How to use country systems to manage climate finance • Conclusions

3. Country Systems for Climate Change:It’s a plumbing job Integrate climate into planning Integrate climate to budgets

4. Country systems: plumbing • Planning • Policy coordination and implementation • Budgeting & financial management • Procurement • Monitoring and evaluation

5. Private Sector Parliament Civil Society Public Finance • Coherence • Predictability • Transparency • Gender Equity

6. Climate expenditure/finance • Climate expenditure is significant (3-15% of total government expenditure ) • Domestic expenditures important • Cross ministerial expenditure (eg Agriculture, Infrastructure, Local Gov, Social protection, ) • International climate finance fragmented andoften outside country systems: donor trust funds, GEF, Special Climate Fund, Adaptation Fund • Green Climate Fund intended to consolidate • Leveraging private finance is key

7. Climate finance and country systems: Why? • Advantages of using country systems • Country ownership • Transformational change: heart of economic policy • Mainstreaming across sector and subnational budgets • Scaling up and lower transaction costs • But challenges of corruption, harder to monitor, competing interests – political economy?

8. Climate finance and country systems: How? • Institutional reforms • Planning • Budget execution and implementation • Accountability and Monitoring

9. Private Sector e.g. Audit climate expenditure e.g. Climate policy in Annual Plan Parliament Civil Society e.g. Climate Budget marking Public Climate Finance • Coherence • Predictability • Transparency • Gender Equity e.g. Climate Key perfor-mance indicators

10. Country systems and climate finance: Institutional reforms • Budget process: public expenditures and incentivizing private finance • Promote climate finance units in Ministry of Finance(Indonesia, India) • Inter-ministry climate finance groups (Bangladesh, Thailand, Cambodia) • Local government needsclimate expertise

11. Country systems: Planning and Budget execution & implementation • Climate Fiscal Framework (Bangladesh) • Climate impacts of capital budget assessed (VietNam) • Climate strategy costed for budget (Cambodia) • Local climate expenditure targets (Nepal) • Public financial management for managing climate finance (Bangladesh)

12. Country systems: Accountability and monitoring • Climate included in performance based budgeting (Bangladesh) • Assessing climate expenditure qualityie cost-effectiveness (Indonesia) • Budget climate coding/tracking (US, EC, Nepal, Indonesia) • Distributional impacts of climate finance (Bangladesh)

13. Conclusions • Country systems are the plumbing • Climate finance – domestic is significant, international fragmented and often outside county systems • Climate finance needs to flow through these country systems • But there are challenges that need to be overcome – need to understand the politic economy