Forum theme: Strengthening Country Systems to Access and Manage Climate Change Adaptation Financing in Asia and the Pacific

In order to achieve sustainable global adaptation to the current and future changing climate, country systems in LDCs and other developing nations need to be strengthened so that these countries can independently, efficiently and effectively manage climate financing. For the purposes of this Forum, the term “country systems” refers to the collection of financial, procurement, administrative, planning, implementation, monitoring and evaluation processes that are used in combination within countries – particularly by their governments – in order to administer climate change adaptation related policies, plans, programs/projects, budgets, and, ultimately, results. 

All LDCs have by now formulated their individual National Adaptation Programme of Action (NAPA), a list of ranked priority adaptation activities and projects that respond to a country’s urgent and immediate adaptation needs – those for which further delay would increase vulnerability as well as costs at a later stage (UNFCCC, 2001). However, the process by which more strategic and longer-term investments are planned and prioritized has emerged as an area in need of strengthening. As countries are progressing in the delivery of initial results on urgent adaptation actions, they are also discovering the need to shift gears towards thinking about medium and long-term priorities while simultaneously addressing “urgent and immediate needs.”  This requires systemic changes to make development planning and budgeting more climate-responsive. The support provided by UNDP, and its partners, to countries on their NAP process is therefore of paramount importance.

It is clear that while international sources of climate funds have been the topic of much discussion and debate, national domestic sources will likely contribute significant financing for achieving development results that also have adaptation benefits. Climate Public Expenditure and Institutional Reviews (CPEIRs), which are designed to help Ministries of Finance, Planning, and Environment assess how national budgets and institutional frameworks are configured to respond to climate change, and which have been undertaken in Bangladesh, Cambodia, Indonesia, Nepal, Samoa and Thailand[1] with support from UNDP, the World Bank and other donors, have revealed that most development funding, including climate relevant funding, is often domestic. Therefore, more country level work is required to catalyze and redirect these significant resources towards climate resilient investments and to better align domestic and external finance for even greater adaptation benefits. More proactive engagement with planning and finance ministries is important and will help these countries along the road in developing a climate fiscal framework that more effectively helps them to manage anticipated climate change related risks and opportunities over the medium and long-term.

Similar work has been undertaken by other development agencies and research institutes, including the World Resources Institute’s collaborative program with UNDP and the United Nations Environment Programme (UNEP) in getting developing countries “ready” for climate finance by strengthening national systems to directly or indirectly access international climate funds, helping to develop capacities that in turn will be able to develop project pipelines based on national climate change strategies and priorities, and setting up in-country monitoring tracking systems for climate finance and its effectiveness. The Overseas Development Institute has also conducted numerous ongoing studies and research on climate finance and effectiveness.

Looking forward, an increasing support in this area is likely to be through capacity development for ensuring both that country systems are in place for short-, medium-, and long-term planning and that internal and external financing is channeled in a coherent manner for climate-resilient development. With this ultimate aim, ongoing assistance – such as through the CPEIRs, the USAID Adapt Asia-Pacific/UNDP Economics of Climate Change Adaptation capacity building program, and the Global Support Programme on National Adaptation Plans (NAP) process – will support countries to embark on longer-term planning to develop country systems that respond to the needs of adapting to climate change. 

As noted above, several key players in the field have undertaken significant past and present work on country systems. There are, however, remaining gaps that need to be filled and new opportunities to be discussed on how countries can strengthen country systems and what countries need to do at the national level to improve climate responsive planning and budgeting as well as improve preparedness to access external climate funds. There will need to be greater in-country connectedness and integration between ongoing planning and budgeting processes involving key ministries such as environment, sector ministries, planning and finance ministries.

The jointly organized USAID Adapt Asia-Pacific/UNDP regional forum, under the theme “Strengthening Country Systems to Access and Manage Climate Change Adaptation Financing in Asia and the Pacific,” aims to identify those gaps as well as opportunities to address them. It will build on the conclusions from the Global Forum held December 2013 in Korea on the “Use of Country Systems to Manage Climate Finance.” Among other things, the global forum concluded that the ability to both align climate change strategy formulation with national development plans, as well as to clearly track climate spending of all kinds, is important. Additionally the forum concluded that there is urgent need for capacity building support for new institutional frameworks and public financial management to attract, guide, and manage climate finance. The USAID Adapt Asia-Pacific Forum will review these global conclusions and identify to what extent they are being applied in this region and how their application can be supported and strengthened.

[1] CPEIRs are also underway or planned in China, Fiji, India, Pakistan and Vietnam, almost all of which are USAID Adapt Asia-Pacific target countries.