Capacity Building for Climate Action Funding Opportunities. Concept idea by the NDC Support Cluster

Transcription

1 Capacity Building for Climate Action Funding Opportunities Concept idea by the NDC Support Cluster

2 General Description At the subnational level, technical knowledge and funding for existing climate plans is often insufficient. Also, human capacity to mainstream NDCs is often lacking; the workforce tends to be more involved in traditional approaches to development and service delivery. Against this background, it is highly important to strengthen local capacities and develop integrated financing approaches advancing NDC implementation. Such approaches could support stakeholders, for example, to learn about regional and subnational funds, which may also be relevant from a climate perspective. Climate funding academies may be helpful to build this knowledge base and to learn about the availability of funding, as well as on direct access windows within international funding institutions such as the Green Climate Fund (GCF). Beyond a merely informational experience, the academies would generate installed fundraising, alliance building and project proposal development capacities by training key stakeholders within subnational governments. Joint project proposals by cities or municipalities would be encouraged through project preparation facilities specifically established for the purpose of non-state actors. Finally, the national and subnational levels need to closely coordinate the tracking of funding and donor activities throughout the implementation of climate programs. Context The implementation of meaningful and effective climate change action depends on coordination between sub-national actors (i.e. local communities, the private sector, municipal/provincial governments, civil society) and often national and/or international actors (donors, private companies, government ministries, development agencies, etc.). The implementation of NDCs and fulfilment of international commitments in terms of both adaptation and mitigation, requires multi-level climate governance that assures that national climate commitments and policies are brought down to subnational scales. In order to achieve vertical integration, leadership is required in particular among sub-national governments (state, provincial and municipal) as key actors that can bridge gaps between sectors and scales within the overall governance system. It is essential for sub-national actors, and in particular local governments, to fully comprehend the myriad of ways in which climate change is affecting and will continue to impact their territories, communities, ecosystems and economies, in order to develop participatory and strategic planning processes that outline pathways towards climate resilience and low carbon development, that also contribute towards fulfilling NDC commitments. Increasingly, local governments around the world are developing strategic climate planning instruments, which include priority actions that would heighten resilience and adaptation to climate change, as well as reduce emissions and achieve more efficient use of critical resources such as energy and water. From the perspective of international financial institutions, development agencies, multi-lateral organizations, development banks, bilateral cooperation and others, subnational partners such as cities and local governments are increasingly seen as viable if not essential players for the implementation of high-impact, low-risk actions that have the capacity to produce tangible results for a large number of beneficiaries, and be brought to scale if successful. Local governments that have developed strategic climate action plans with identified priority actions are capable of providing a justification for climate actions as part of a sustainable and coherent process in response to specific challenges, impacts. 2

3 It is preferable that funding for action be provided for territories where local authorities have developed a strategic vision for how to best respond in the face of climate change, and where local actors are empowered to act and comprehend the importance of climate change adaptation and mitigation. Territories that are highly vulnerable and exposed to climate change impacts, as well as strategic territories where significant emissions reductions can be achieved (such as metropolises, industrial areas, and potential protected natural areas) should be considered priority hotspots for capacity building, strategic climate planning, and climate action laboratories. Challenges and Barriers Tackled One of the primary barriers to the implementation of climate actions on a local level in Latin America and other developing regions in the world is access to real funding opportunities. This is not due to a lack of funding sources, as there are a wide variety of existing financial resources both within countries and from a variety of other development institutions and financial mechanisms. Rather, there are several gaps that make it difficult for local actors to identify, access and successfully access funds. Knowledge barriers exist in terms of information on what funding opportunities are available to local actors, and the requirements for accessing such funds. Many subnational governments are not aware of existing opportunities in terms of potential development funding that can be channelled for use in the implementation of climate actions; far less aware of other types of traditional or emergent financial mechanisms that could serve for the same ends, and how to operationalize them. Regarding the use of potential financial mechanisms (i.e. Green bonds, carbon pricing, etc.), many subnational governments in the developing world lack training and knowledge, ranging from language barriers (financial jargon and concepts) to analytical tools necessary for producing viable business models or cost-benefit analyses. Most subnational governments in the developing world, barring large metropolitan areas or other strategic territories, lack the technical capacities within their institutions needed to develop viable projects proposals, concepts or analyses needed to access funding opportunities. In many cases, municipal budgets are not available to hire extra personnel with specialized fundraising or project development skill sets, or to externalize the costs for such exercises (nor is it desirable to do so!). Subnational governments require installed technical capacities, through the training of existing personnel, in order to overcome such barriers. In many parts of the developing world, there is also an untapped potential for leveraging strategic partnerships between different stakeholders (i.e. Private sector, academia, civil society, government, etc.) in order to widen the availability of different kinds of funding opportunities, and to facilitate project development and implementation. The reasons for this may vary greatly depending on subnational contexts, from a lack of trust between sectors, fundamental cultural differences between sectors that impede constructive communication, to a lack of mechanisms and methodologies for knowledge sharing and project co-design, lack of vision regarding the benefits of public-private partnerships, and misconceptions regarding what different stakeholders may bring to the table in a collaborative effort. Summary of the Approach Technical capacities are required within local governments, in order to be able to think and act outside the box in terms of project development and implementation, the identification of various 3

4 forms of funding opportunities, to form the necessary alliances with actors from other sectors and scales, and to gain access to funds for the implementation of climate actions that can contribute to NDC adaptation and mitigation targets. An element of creativity is required, as many existing funding options are not climate change specific; in other words, there are many opportunities to finance climate action from sector-based funds for energy, waste management, disaster risk reduction, water efficiency and management, green infrastructure, community development, among many others. Local governments can be made aware that the transversal nature of climate change and climate actions allow for access to a variety of funding sources, and trained to identify potential funding based on particular fields of action. Various forms of financial mechanisms could also be potentially available for local governments and other non-state actors, depending on the legal and administrative contexts of each country. Green bonds, carbon pricing instruments, preferential financial loans, and other such mechanisms must be included among the menu of funding options available to subnational governments. In addition, local leaders can be trained on how to identify different project development and implementation models; not all funds can be channelled directly to local governments, but may require instead a consortium of actors, led by community or civil society organizations, private companies or national ministries. Local governments must be adept at forming such alliances as needed, rather than relying solely on traditional development funding mechanisms. Public-private partnerships can be very useful in order to leverage co-funding, and design more sustainable and effective project proposals, that are also more attractive to potential funding sources and investments. The Climate Funding Academy approach would provide in-depth training for key stakeholder within subnational governments that have already developed or are in the process of developing strategic climate action plans. These training experiences would be developed in-situ, over a period of several days, and include follow-up sessions in order to assess the primary outcome of the training exercise: the presentation of a concrete project proposal. The academy would be designed in order to develop installed capacities that would allow the subnational government stakeholders to: 1. Identify and map potential sectorial and financial instrument funding mechanisms, according to action priorities 2. Match potential funding sources with priority actions from local climate action plans, and in accordance with national NDC goals 3. Determine and develop partnership models for identified accessing funding opportunities 4. Develop viable project proposals, through capacity building in the development of: - Project objectives - Outcomes, products, results - Various forms of budgeting (ABB, RBB, etc.) - Logical framework - Impact assessment, cost-benefit analysis, business model, etc. - Action indicators (process and impact) - Sustainability criteria - Etc. The Academy methodology would be designed for use in any country, by developing modules in which the specific content and foci would depend on country-specific information such as the legaladministrative context, development standing, national NDC priorities, accessibility to certain financial 4

5 mechanisms or development funds, among other elements. In this way, a contextualization process would be required before application of the academy to different countries, which would determine the specific content, foci, and fund mapping exercise, while maintaining the overall template and academy methodology. Existing Good Practices Some existing best practices can be highlighted that feed directly into the proposed Capacity Building for Climate Action Funding Opportunities approach. These include several experiences with climate finance mapping, fund mapping, and briefing reports, by such institutions as WRI, Climate Policy Initiative, Carbon Brief, IDFC, GIZ, GFLAC, CCAC, OECD, NDC Partnership Platform, among many others. The GIZ and adelphi have developed with CliFiT International Climate Finance Training a modular training course ( which was expanded in 2017 by a sector-component to specifically address the needs of sector such as water, energy or forests. The training course is design in an interactive way so to ensure that the content will be applicable afterwards. This experience can be used to inform the Academy approach and even integrated approaches may be discussed. With regards to specific experience with a climate funding academy applied to subnational governments, the NGO Adapt Chile has developed initial experiences with the Chilean Network of Municipalities for Climate Action since Innovative Characteristics and Key Features Among the primary innovative characteristics and key features of the Capacity Building for Climate Action Funding Opportunities approach is that it seeks to provide local capacity building to subnational governments, allowing them autonomy to act as bridge-builders between various actors, and empowering them as local actors to be able to push for the implementation of concrete climate actions on the ground, which contribute to national-level NDC fulfillment. In addition, the proposed methodology and process for the design of the training academy implies an adaptive template, making it suitable for application in any country, through the development of a contextualization process through prior research on each country context that feeds into the training content and foci. Success Factors and Replicability The approach would include a methodology for country-specific adjustments, as well as a toolkit and methodology for the capacity building experiences (climate action funding academy). Building on the basis of prior experience developed by Adapt Chile with the Chilean Networks of Municipalities for Climate Action, the approach requires an additional methodological recalibration and the development of a new set of tools, taking into consideration the proposed innovative approach and recent information and funding mechanisms that have emerged in recent years. In this way, the approach would require an initial application to one specific country (Chile) as a proof of concept, as well as application for at least two additional countries, e.g. in Latin America, to validate the country-contextualization process. 5

6 Key Stakeholder Groups The following are key stakeholder groups for the proposed Capacity Building for Climate Action Funding Opportunities approach. It is important to highlight that all of the following stakeholder groups would also be involved in the adaptive methodology approach in order to adjust the academy content and foci according to differing country contexts. a. Local Government and Local Government Networks Subnational governments are the primary beneficiaries of the approach, as key stakeholders within these governments would be trained using the proposed methodology. Local government networks are key, as such networks represent communities of practice with local governments active in climate change planning and development. Such networks provide not only a pool of different local governments for the initial training exercise, but also opportunities for replicability. b. Relevant National Government Actors National government actors relevant to the processes for the development and implementation of NDCs and other national-level climate policy initiatives must be integrated into the process for several reasons. First, to assure that the actions contemplated by the subnational governments are consistent with national NDC and climate policies; but secondly, national government actors could also be trained as trainers in the academy methodology, and adopted as a national climate-training program. c. Potential Intermediaries and Partners Within the academy training exercise, subnational governments will be trained in the formation of different kinds public-private partnerships that could aid in accessing, applying for, developing and implementing potential climate action funding sources. The practical exercise of the academy will require the formation of such alliances for the formulation of a project proposal. In this way, relevant partners representing the private sector, academia, civil society, local communities or others should be engaged in order to facilitate such exercises. Authors: Jordan Harris (Adapt Chile) and Dennis Tänzler (Adelphi) with contributions from Nurun Nahar (Planning Commission of Bangladesh), Ana Cecilia Perales (Secretariat of Environment and Territorial Development of the State of Jalisco in Mexico), Francisco Maciel (Sao Paolo Metropolitan West Municipal Consortium-CIOESTE). This concept idea has been developed in the framework of the Thematic Working Group on Governance of the NDC Support Cluster. 09 /