Transcript Session 6.1.2 Cambodia - Climate Change Finance and

Planning the Climate Change Response through
National Systems :
Climate Change Action Plans and Climate
Change Financing Framework in Cambodia
03 DECEMBER 2013
Current status of Climate Finance in
Cambodia
• On average, 105 MUSD per year of climate-relevant expenditures
according to the latest CPEIR update (2009-12), with 22% domestically
funded and 78% external
• External resources mobilized in the past three years: over 80 MUSD per
year (main donors: CIF/SPCR, US, Japan, EU, Sweden, GEF, LDCF,
Adaptation Fund)
• Cambodia Climate Change Strategic Plan 2014-23 (approved in
November 2013)
• 9 priority ministries + Ministry of Environment currently developing their
Climate Change Action Plans
• Guidelines for integration of climate change in local government’s plans
and budgets also under development
Climate Change Financing Framework
(CCFF)
• Objectives
Review existing modalities, current and future sources of
financing, and produce recommendations on how climate change
finance should be channeled for the implementation of the CCCSP
(including sub-national and national levels)
Present a coherent, realistic and prioritized action plan
Provide an estimated costing of the Climate Change response (at
least for the next 5 years), taking into account financing scenarios
Provide initial estimates of the benefits of the proposed response
 Identify next steps and required capacity development support to
implement the framework
Climate Change Financing Framework (2)
• Process to date
Led by a sub-group of the inter-ministerial Climate Change
Technical Team: MEF (coordinator), MoEnvironment, MoPlanning,
NCDD-S (decentralization body), Council for the Development of
Cambodia (in charge of aid and investment coordination)
Initial methodology developed in July 2013 and updated as
required, based on experience
Exercise launched in July 2013, includes detailed work on action
plans in 9 priority ministries + Ministry of Environment
First draft of the action plans and the national CCFF expected by
end December 2013
 Approval in first quarter 2014
Climate Change Financing Framework (3)
• Key pitfalls that we have tried to avoid in the design of our
methodology and tools:
Avoid unrealistic financial expectations (use of financing scenarios)
 Avoid a silo planning approach (link between CC actions and
existing investment plans, where relevant)
Avoid a project-based, project ranking approach (use of a strategic,
programmatic method to plan/allocate resources)
CCFF Key Tools: Scenarios
• Focus on three major types of financing for public expenditures:
Dedicated climate finance from international funds (GCF, Adaptation
Fund, REDD+, LDCF etc.)
Dedicated climate finance from donors (and possibly Government)
in country
 Climate-relevant component of other public expenditures (i.e. not
labeled as climate change but part of the climate change response)
Conservative approach (low growth scenario esp. for international
resources)
• More qualitative assessment of potential for private sector
investment in the climate change response
CCFF Key Tools: Scenarios
$ million
350
305
300
282
260
240
250
125
222
117
205
110
200
103
Integrated CC
96
150
Bilateral/multilateral
90
Dedicated global CC
120
113
100
90
95
101
107
50
35
42
60
30
50
25
Baseline
2014
2015
2016
2017
2018
0
Total
CCFF Key Tools: Scenarios
• Some initial trends:
Global CC funds should grow fastest, but will not be the main source
of financing in the next 5 years
 Main sources of financing: dedicated CC finance through
donors/Govt in-country, and CC-relevant components of other
public expenditures
To ensure effectiveness of CC finance, importance of addressing
donor practices in country, and CC integration in national planning,
budgeting and monitoring processes
CCFF Key Tools: Identifying CC relevant
actions
• Three main types of actions:
Rescaling (up or down) existing actions to take into account their
positive/negative impact on the Climate Change response
Modifying existing actions to take into account Climate Change /
climate proofing
Dedicated Climate Change actions (100% CC: research, capacity
development etc.)
• Second and third category: CC-related inputs are identified and
costed
• The first category is often overlooked because of difficulties to assess
which part of the cost is justified by climate change.
CCFF Key Tools: Estimating CC relevance
of actions
• Use of a methodology based on expected benefits: i.e. which portion
of the benefits of the action will be due to climate change?
• Relatively easy to quantify for mitigation, more complex for
adaptation. E.g. if it is anticipated that disasters will occur twice
more often by 2050 (SREX), then 50% of the benefits of disasterproofing of an infrastructure project would be CC related (and
eligible for CC finance)
• This focus on benefits (instead of inputs) to estimate climate change
relevance can be applied to all three types of actions identified
above
• Not a full cost-benefit analysis (not feasible on national scale), but
using “yardsticks” based on CC science for key types of intervention,
more detailed CBA for the biggest investments only.
CCFF Key Tools: Estimating CC relevance
of actions
W
100%
Types of Action
CC planning, management, awareness. This will have no value if CC does not happen.
100%
Coastal protection specifically for sea rise (ie not for general coastal protection against current risks). This will have no value if CC
does not happen.
Disaster response, reduction and management. Based on the SREX conclusion that extreme events will become twice as likely by
2050.
Proofing against flood/drought (roads, water, crops …). Based on the SREX conclusion that extreme events will become twice as
likely by 2050.
Forestry protection and biodiversity related actions in ecosystems that are CC vulnerable. Based on the assumption that these are
vulnerable ecosystems anyway, so there will be benefits even without CC. Could be higher for coastal areas.
50%
50%
50%
50%
25%
20%
15%
10%
10%
Livelihoods targeted on climate vulnerable groups. Based on the assumption that the incidence of CC related risks with double, in
line with SREX conclusions on extreme events
Irrigation and water supply. Assuming that two thirds of benefits are in dry season and these are not affected by CC, and that the
dry spells in the wet season will double, based on SREX conclusions, and so the one third of benefits from wet season will also
double.
Energy efficiency and renewable energy. Based on the current price of electricity, the carbon content of electricity and assuming a
value of 50 $/tCO2e.
Road improvements in general (ie not just CC proofing). This is based on analysis which suggests that road costs will increase by 15%
if CC happens (?)
Support for climate sensitive diseases. Based on WHO international studies suggesting climate sensitive disease will increase by 10%
by 2050.
Sustainable forest management. Based on international studies comparing the economic value of timber and non-timber sales
under sustainable management to the carbon content of the timber extracted, valued at 50 $/tCO2e.
CCFF Key Tools: Prioritization of actions
Key principles
• Recognize the interdependencies between various actions, and avoid
a simple ranking of projects. Programmatic approach
• Avoid mechanical scoring exercise. Use recommended criteria for a
qualitative discussion on prioritization
• Use of financing scenarios (ceilings) to keep planning realistic
Three main steps
1.
Long list of actions (looking at existing investments and new
actions), through extensive stakeholder consultations
2.
Short- listing / discussion on priorities (based on criteria)
3.
Reflect priorities through phasing/allocation of resources
CCFF Key Tools: Prioritization of actions
1.
Long listing
• Looking at the three types of actions identified above.
• Involvement of key stakeholders.
Short-listing/prioritization
Economic
Social
Environmental
-1 – 3
0–3
-1 – 2
0–2
0–2
0–2
2
1
0
1
2
0
Ease to implement
Mitigation cost
effectiveness
Feasibility
Cost per beneficiary
Co-benefits
Scale of
climate risk
Effectiveness
Capacity
Action
Political commitment
2.
Green /Yellow/ Red
Shortlisted
Upscaled malaria treatment
…
G
Y
G
CCFF Key Tools: Prioritization of actions
Phasing and allocation of resources
Category of action
Ministry CCSP Strategy #
CCCSP Strategy #
Action
Responsible department(s)
3.
Estimated budget (USD’000)
2014 2015 2016 2017
1
Increase budget for technical support
for Farmer Water User Committees
1
DWR
200
200
2
Climate proof design of canals in the
Northwest irrigation programme
2
DWR
5,000
15,000
45,000
45,000 50,000 55,000 60,000
Total (ceiling)
200
200
2018
200
Total
1,000
20,000
255,000
Lessons learnt
• Need for a combination of a “ decentralized” approach (with line
ministries in the lead for their planning, important for
mainstreaming and ownership), and some central inputs (from the
climate change institution) on CC impacts, methodology, and
coordination issues
• Cambodia context (high dependency on external resources, very
project-based) makes it essential to engage donors on modalities
that support mainstreaming and a programmatic approach
• Costing is made difficult by the absence of climate-proofing
standards in many sectors. Urgent need to develop these standards
and update them as CC science evolves.
Thank you