european capacity building initiativeecbi National Institutional Arrangements for Climate Change Action Mitigation and Adaptation Luis Gomez-Echeverri International Institute for Applied Systems Analysis (IIASA) european capacity building initiative initiative européenne de renforcement des capacités ecbi for sustained capacity building in support of international climate change negotiations pour un renforcement durable des capacités en appui aux négociations internationales sur les changements climatiques

european capacity building initiativeecbi Focusing on Local Institutions and Governance Why the Urgency  Mainstreaming of climate change into development strategies will be difficult if not impossible without strong local institutions and able The promise of new wave of funding - but success will directly depend on mechanisms/institutions in place or to be in place at the national/local level  Success of mitigation funding entities  and adaptation activities depends on ability to clearly assess challenges and opportunities and strategies to address them optimally in line with local needs and circumstances  Questions that arise at global level - how to identify eligible activities and how to allocate, disburse, manage, monitor, and evaluate – also come up at the national level but with added complexity  Several countries taking initiative to establish national funding entities to tap resources – and many have long established arrangements for dealing with climate change but many may need serious overhaul - big capacity development challenge ahead  Urgent need to shift attention to capacity building discussion - from building capacities of accredited entities to building broader local capacities to assess, formulate strategies, and manage climate change programs at local level

european capacity building initiativeecbi Current Institutional Landscape: Very Diverse but There are some common features  Very few countries have established national institutions fully dedicated to addressing climate change (both mitigation and adaptation)  In most countries it is the Ministry of Environment that is designated to help in (coordination?) implementation of climate change activities  In many countries climate change is perceived as environmental problem and thus difficult to establish coordination across sectoral ministries  Narrow institutional mandates shaped by interest to obtain funding rather than broader climate change agenda that needs to be mainstreamed into development  Coordination mechanisms are weak or non-existent – power or legal mandate is absent in most countries

european capacity building initiativeecbi Current Governance Challenges Common Trends and Problems to Addres(1)  Weak institutional structures to manage climate change  Lack of clarity of functions of climate change governance  Perceived lack of real priority for climate change – often driven solely by funding interest which in some cases distorting national priorities  Little capacity to mainstream climate change into dev strategies – major gaps between action taken and national policies and strategies where they exist  Weak structures to mobilize, capture and manage funding  Weak coordination at national level

european capacity building initiativeecbi Current Governance Challenges Common Trends and Problems to Address (2)  Proliferation of funds with diverse administrative and other procedures creating major burden and diverting resources from other key priorities  Very few funding efforts and other support for capacity building  Weak monitoring and evaluation capacity and thus performance evaluation is weak  Weak capacities in key and complex areas crucial for managing climate change actions  Tendency to create new institutions to respond to demands of new funds with complex procedures

european capacity building initiativeecbi The Case for Strong National Institutions and Funding Entities (1)  A focus on strengthening national institutions could help address interest of developing countries to deal with climate change within context of their development  Potential for transition to new model with greater devolution and sense of ownership  Timely transition is good news for climate change and development:  For development: easier to mainstream into development priorities of countries  For climate change: will help countries feel as legitimate partners of global effort  Magnitude of climate change needs can not be fully addressed by UNFCCC - thus need for leveraging other funds (domestic and global) where local institutions will play key role 6

european capacity building initiativeecbi The Case for Strong National Institutions and Funding Entities (2)  National institutions/funding entities are the ones best placed to ensure that investments are mainstreamed/ integrated into development  National institutions/funding entities are best placed to sort out different needs and match them to the best existing instruments  Role of national funding entities and institutions as intermediaries vis-à-vis global mechanism and helping identify eligible activities and coordinate implementing entities  Magnitude of climate change needs can not be fully addressed by UNFCCC - thus need for leveraging other funds 7

european capacity building initiativeecbi In the area of Finance -Many Relying on International Institutions Others creating their own National Funding Entities (Partial Indicative List) Funding Entity Amazon Fund – Brazil Bangladesh Climate Change Resilience Fund Brazil Nat. Fund CC China CDM Fund – CDMF Ecuador Yasuni Trust Fund Guyana REDD Invest Fund Indonesia CC Trust Fund Maldives CC Trust Fund Purpose To combat deforestation and promote sustainable development in Amazon To help implementation climate change action plan – particularly vulnerable communities To support broad range mitigation adaptation To support climate change action plan To support low carbon economy and forests To protect nat. forest and promote low carbon To mainstream and align CC to development To strengthen nat. capacity thru pilot program

european capacity building initiativeecbi National Skills Required Similar to Any Finance but Some More Complex and New Oversight Helping ensure mainstreaming to develop. Helping establish/manage perform criteria Establishing monitor. & review systems Financial Sup. Receiving/managing funds from global funding mechanisms w/ different demands Managing the program cycle of spec funds Leveraging additional CC resources Standard Set. Developing relevant eligibility criteria Ensuring standards aligned to nat priorities Accountability Performance reporting different & complex Capacities for maintaining registers and reporting to global entities

european capacity building initiativeecbi Conclusions  Greater focus needed at climate change negotiations on resources and other needs for strengthening local governance and institutions in developing countries  Potential for exciting new era of global cooperation on climate change with greater sense of local ownership and mainstreaming into development strategies if it is done right – bringing good news to both development and climate change  Success of global cooperation and finance on climate change inextricably linked to strong local arrangements  Countries with strong local institutions and clear climate change strategies are posed to contribute and benefit the most in fight on climate change  New and additional funding prospects are good news but will pose huge capacity development challenge in developing countries that needs to be addressed and properly funded (fast-start-financing)  International institutions will continue to play an important BUT DIFFERENT role creating bridges where local institutions not yet established or weak - building capacities and providing technical assistance 10