Managing climate finance through country systems: UK experience Malcolm Smart Senior Economic Adviser Department for International Development Global Forum on Using Country Systems to Manage Climate Change Finance, 2-3 December 2013, Incheon, Korea

What I will cover How does the UK manage its resources to address climate change? What international climate finance does the UK provide? What is the UK’s commitment to using country systems Support to help build country systems for climate finance Managing climate finance through country systems Slide 2

Met Office Regional bodies How does the UK manage its resources to address climate change? Slide 3 Climate Change Act DfT DECC Mitigation Adaptation Legislates long-term 2050 emissions cut target Rolling 5-year national carbon budgets – packages of measures Target-consistent carbon prices in policy/project appraisals Taxes, ETS to internalise cost of carbon Not about tracking finance – tracking GHG impact Defra Committee on Climate Change Parliament Env Agency UK CC Risk Assessment Local Government Act sets the requirements for Devolved Govts National Adaptation Programme Public resources Private Sector Insurance industry Advice & support to companies See

What international climate finance does the UK provide? Slide 4 Adaptation The International Climate Fund What £3.8 billion over 5 years Split between 3 Departments (DFID, DECC, Defra) Spent through multilateral bodies (GEF, CIFs) on global progs. in-country 3 themes Low Carbon Devt Forests Issues Strong focus on private sector Fast Start pressures on monitoring & evaluation – results Mainstreaming CC into other DFID progs

UK’s commitment to using country systems Slide 5 Commitment to Busan principle of country ownership  Support to strengthen systems  Considerable use made of country systems where conditions allow: Partnership Principles Fiduciary Risk Strong focus on results and VfM Issues in choice of climate finance modality for working with Government  Existence of costed national strategy on climate change?  Policy consistency?  Reflected in budgetary allocations?  Able to track the finance?  Results framework?  CF greater fiduciary risks? ‘new’ partners in govt no single Min oversight? doing new things?

The UK is helping develop country systems for climate finance National development plan Planning & Strategy MTEF rolling multi- year budget Budget Formulation Budget Execution Evaluation Accounting for spend East African economics of CC studies & other support for national plans in Rwanda, Kenya (StARK+), Ethiopia CRGE (SCIP), Nepal LAPAs, Indonesia low carbon support to Min of Finance, LDCF for NAPAs Audit Slide 6 Monitoring results Tanzania Climate Change Institutional Strengthening Programme to improve Tanzania's access to climate finance and use it effectively Asia Regional programme supporting strengthening climate finance governance (CPGD) For project info see: Support for CPEIRs via ODI policy research programme More generic support to strengthen PFM & accountability Helping Govts’ develop M&E systems - TAMD IIED Supporting state action and other subnational plans in South Asia CPGD

Managing climate finance through country systems Slide 7 Most Degree of Earmarking Least Project with clearly specified areas of spend Climate change budget support (DPL-type) Rwanda – FONERWA £22.5m to National climate fund open to GoR, CSO & private sector Project using DFID systems Seek to ensure: consistency with plans on-budget None to date Ethiopia - £15m through MoFED as part of ‘CHIP’ Other support through Govt with CC benefits e.g.£344m for Ethiopia Productive Safety-Nets Support to the Implementation Plan for Development Resilient to CC in the Caribbean - £5m via regional body Potentially India’s National Rural Employment Guarantee scheme (MNREGA)