Getting climate finance to where it is needed most

Over the last decade, developed countries have contributed tens of billions of US dollars in climate finance to developing countries to support both mitigation actions (to reduce emissions of greenhouse gases that cause climate change), as well as adaptation (to tackle the adverse impacts of climate change).

Most of the funding has gone to support mitigation actions in a few of the larger developing countries such as China, India, Brazil, Indonesia and South Africa while only a small proportion has gone to the most vulnerable and poorest developing countries, such as Bangladesh, for adaptation.

At the eight annual international conference on community based adaptation (CBA8) held in Nepal in 2014, the Kathmandu Declaration was adopted with three major demands. The first demand was for global climate funding to be divided equally between mitigation and adaptation. The second was to demand that when allocating such climate funds, all developing countries give half of it to the most vulnerable communities for adaptation. The third demand was for all climate funders, both global and national, to provide information on how much of their funding goes to the most vulnerable communities.

There has been a significant victory at the board of the Green Climate Fund (GCF), the main channel for global climate funds from developed to developing countries, regarding the first demand to allocate global adaptation funding equally with mitigation funding. The GCF Board has made the laudable decision to allocate its funds equally between mitigation and adaptation. It has further decided to prioritise the adaptation funding to the most vulnerable developing countries, namely the Small Island Developing States (SIDS) as well as the Least Developed Countries (LDCs), which includes Bangladesh. However, the flow of funds from the GCF is still quite slow, thus even the funds allocated for adaptation in the most vulnerable countries have yet to reach their intended beneficiaries in many cases.

The GCF is not the only channel through which climate funds are flowing. A recent review of all sources and channels of climate funding done by the International Institute for Environment and Development (IIED) based in the UK found that only about 10 percent of global climate funds can be shown to be reaching the communities or local levels where the most vulnerable people live. The report also found that it is still very difficult to find transparent information that enables tracking of the funds to the local level. This lack of transparency is valid both for global and national funds.

Amongst the donors, two are worth mentioning for their explicit adoption of community and local level funding, namely, the community based adaptation (CBA) fund of the small grants programme (SGP) of the Global Environment Facility (GEF), and the Local Solutions Programme of USAID that has an explicit target of 30 percent to reach the local level. Also worth mentioning is the Local Climate Adaptive Living Facility (LoCAL) of the United Nations Capital Development Fund (UNCDF).

With regard to the demand for national governments in developing countries allocating at least half their climate funds to the most vulnerable, only Nepal has a clearly stated policy of allocating 80 percent of their climate funds to the local level to support their Local Adaptation Plans of Action (LAPAs). A number of countries in Africa, including Kenya and Tanzania, are developing climate funds to channel funding to the local level, although it is too early to say if they are effective.

Over the last decade, Bangladesh has received several hundred million US dollars of climate finance from developed countries through the Bangladesh Climate Resilience Fund (BCRF), and has also allocated several hundred million US dollars worth in taka from the national budget through the Bangladesh Climate Trust Fund (BCTF).

Both these funds have explicitly allocated 10 percent of their available funds to reach local communities through NGOs managed by the Palli Karma Sahayak Foundation (PKSF).

The remaining 90 percent climate funds have been allocated through different government ministries and agencies, where, in many cases, it is difficult to track if any of it went to local or community level. However, there are other local level funds for disaster risk reduction which can be used to gain knowledge on climate adaptation funding.

Based on this brief report card of the current situation regarding the flow of climate funds from global to national levels and then from national to local levels, the verdict is firm. Both the developed countries providing the funds and the developing countries receiving the funds must do better.

The developed countries providing the climate funds for adaptation have to do a much better job of tracking their funding more transparently. The climate fund intermediaries, such as the GCF, as well as others such as UNDP and World Bank, also need to be better at speeding the delivery of adaptation funds that they manage, and also ensure that they can provide transparent information to track if it is reaching (and benefiting) the most vulnerable communities.

Finally, developing countries, including Bangladesh, need to consider adopting a policy to prioritise allocations of climate funds to the most vulnerable communities in the most vulnerable parts of the country.

They also need to develop transparent and robust systems at the national level to track the funds and ensure that they indeed reach and help the most vulnerable communities at the local level.

Originally this article was published on March 09, 2017 at Daily Star, The author Dr. Saleemul Huq is the director of International Centre for Climate Change and Development (ICCCAD) at Independent Unviersity, Bangladesh (IUB)