Afghanistan Climate Budgeting Guidelines Opportunities and challenges with mainstreaming climate change in national budgeting processes Bangkok, 4 March 2019

Why Climate Change in Afghan Budgets? Impact on key development concerns: livelihoods, food & water security, poverty, disaster risk reduction Inherent adaptation/mitigation opportunities to be explored CC risks to Afghanistan Afghan CPEIR on sector-wise impact on GDP growth Gaps in funding to meet adaptation needs Evidence on Loss and Damage from CC 38% reduction in development aid between 2010-15 Donor aid – major off-budget resource for the country Recent trend in donor support This slide is to mention the policy and economic context – and rationale to take up a reform like the ACBG.

Enabling conditions in Afghan policy context Ongoing reform Improved fiscal projection and reporting practices Gender-responsive budgeting Afghan CPEIR First step in this mainstreaming pathway already achieved Indicative climate change financing framework (CCFF) also provided Advantages Expected loss & damage from future CC risks mapped across key sectors Strong basis to link budgets with CC priorities This slide is too discuss the enabling factors that helped introduce the ACBG among the MoF and other stakeholders.

ACBG: Piloting and Adoption Steered by the Ministry of Finance (MoF) – central authority in coordinating and approving line Ministry budgets Piloted in select line ministries – Ministry of Agriculture, Irrigation and Livestock (MAIL), Ministry of Energy and Water (MEW) and Ministry of Rural Rehabilitation and Development (MRRD) – which implement projects closely related to natural resource management, rural livelihoods and vulnerable communities Consultative phase involving important stakeholders from the start by engaging with the NEPA, MoF and line ministries Practical and operational inputs – from technical and sectoral nodal officers Strategic oversight – from key senior leadership of line ministries Iterative rounds of training and capacity building conducted leading to robust and well understood climate budgeting guidelines and toolkit MoF approved ACBG in December 2018 – poised for expansion to all relevant ministries from this upcoming financial year Budgets have the potential to be defended also based on their CC linkages, for project approval This slide is to explain the process followed in developing and institutionalising the ACBG (we can convert this into a flow chart, for easier understanding after getting Sayed Naseer Sb’s inputs)

Integration into the Afghan budget calendar Short-term Fiscal space and priority setting Identify programmes for further scrutiny Short -term Budget prioritization Inform the concerned Ministry on high priority programmes Medium-term Systems development Codify programmes from a budget reporting perspective Medium-term - Improved capacity to deliver climate resilient programmes Access additional climate finance through identification of budget gaps in climate relevant programmes Long-term - Climate-responsive budget strategy, which would evolve from regular tracking of climate relevance of prioritised programmes Re-shape budget orientation for greater CC response This slide is to discuss the proposed integration with budget phases – needs to be further modified by Sayed Naseer Sb, based on more recent updates (this is just a template)

ACBG: Role in Climate Finance Mobilisation CAPACITY - Increased sensitisation among line ministries on CC linkages with their programmes important to plan public expenditure in a CC resilient manner PLANNING to reduce vulnerability of infrastructure and communities to adverse CC impacts over time by allocating funds to programmes addressing these concerns REPORTING – budgets communicate climate relevance of budgets give high visibility to public expenditure that already have climate co-benefits, which can be monitored closely FINANCE - Opportunity to leverage existing budgets to tap international climate funds important to strengthen co-financing prospects and donor support by showcasing climate- sensible initiatives being undertaken by Afghanistan This slide is to provide perspective on how the ACBG would be a tool in mobilising domestic adaptation finance – and a way ahead.

Thank you!