Asia-Pacific Regional Forum on Climate Change Finance and Sustainable Development

The 2015 Asia Pacific Forum on Climate Change Finance and Sustainable Development, hosted by the Ministry of Finance of Indonesia and UNDP, in partnership with the Governments of Sweden, the United Kingdom, the UNDP-UNEP Poverty Environment Initiative, the Climate Policy Initiative, the International Centre for Climate Change and Development, and the International Institute for Environment and Development took place from 1-3 September in Jakarta. Representing 15 countries of the region, some 170 policymakers and practitioners participated in the Forum, including officials from Ministries of Finance, Planning, Environment, and Local Government, international organizations, and civil society organizations. The event focused on how climate finance and other sources of development finance–both domestic and external—can be complementary and support sustainable development.
 
Delegates shared experiences in financing responses to climate change in the context of sustainable development, including innovations in budget and planning systems to deliver on low-emission, climate resilient development. Approaches to improve monitoring, accountability, and outcome-based budgeting systems at both national and decentralized levels were show cased with a particular emphasis on the delivery of climate finance to the poor. Delegates discussed the implementation of the Addis Ababa Action Agenda, including possible tools for integrating climate finance with other sources of development finance in the context of the SDGs. In the lead up to the SDG Summit and UNFCCC COP-21, key messages from the Forum could be used by country delegations in their deliberations in New York and Paris. The event showcased UNDP’s core principles of ensuring that climate finance is equitable, efficient, and effective.
 
Key messages for policymakers:
 
1. Addressing climate change is at the heart of the sustainable development agenda and key to achieving the Sustainable Development Goals.
As a risk factor eroding the wealth of nations, climate change is an economic, social and environmental challenge to the achievement of the sustainable development goals (SDGs). Just as a high- ambition agreement under the United Nations Framework Convention on Climate Change (UNFCCC) process will enable the achievement of the SDGs, progress towards the SDGs will enable the achievement of an ambitious response to climate change. Without action, climate change will lead to reduced household incomes as well as government revenues, while at the same time elevating public expenditures. It may also exacerbate resource-based conflicts and social fragility within countries leading to further inequality and deprivation of the poorest and most marginalized communities. Given the acute vulnerability to climate change of numerous countries in the region, policymakers must grasp the urgency of the situation. Scientific evidence is mounting that time is running out to bend development trajectories toward more sustainable pathways.
 
2. Climate finance should be efficient and catalyze additional investment by a wide group of actors.
The resource requirements to meet the SDGs and keep global warming to 2°C are substantial and multiple sources will need to be tapped – including international and domestic public finance as well as international and domestic private flows. The region has significant financial resources with over $4 trillion in domestic public revenues and over $36 trillion in private savings, which can be increased and directed back to the region with improved governance and accountability. There is potential also in reducing domestic revenue losses from illicit financial flows. International public financial support is critical to support domestic efforts to respond to climate change and must demonstrate its added value alongside other financial flows. In creating a sound enabling environment, including by pioneering green fiscal policies and strengthening core government functions, through effective public financial management reforms, countries like Indonesia have shown that strong economic growth and an effective response to climate change can go together. Climate Change presents economic opportunities that should not be underestimated.
 
3. Countries in Asia-Pacific are not waiting for external support and have already begun to act.
In recognizing the primacy of domestic budgets and public finance mechanisms, countries in the region have already taken action by investing their own resources to address climate change. Countries are already reforming their fiscal policy, planning and budgeting systems to make it easier to mobilise, manage, and target different sources of finance to respond to climate change and achieve sustainable development goals. Prioritising scarce public resources to respond to climate change and related sustainable development challenges requires collective efforts and consensus between different actors – elected representatives, civil servants, civil society, and communities. As awareness of the cross-cutting, multi-sectoral nature of climate change and environmental finance issues grows, so too are budget systems and fiscal frameworks evolving to handle increased complexity. Ministries of Finance and Planning are increasingly being called upon to integrate different sustainable development objectives within their plans and budgets. The budget process can help mainstream climate and sustainable development into all public spending, and develop performance or output-based allocations to maximize the impact of finance delivered. Some countries have already begun to tag climate finance and integrate climate into routine national planning and budget processes. The information generated by these systems should be accessible to all concerned stakeholders to ensure the transparency and accountable use of climate finance.
 
 
 
4. In order to be effective and truly transformational, climate finance needs to maximize co-benefits and support the implementation of the SDGs. 
Strengthening governance frameworks at sub-national levels, and targeting resources for the poor and vulnerable are essential to this effort. National climate financing frameworks that include mechanisms to link top-down, centralized planning and budgeting systems with bottom-up, community driven planning are a key foundation for maximising co-benefits. At the local level, ensuring synergies and coherence among the diverse climate related initiatives and resources that are spearheaded by different actors – governmental and non-governmental - becomes critical to an integrated and efficient response. Given that promoting climate resiliency and combatting poverty are closely interlinked agendas, it is essential that budgeting systems enable climate finance to be efficiently directed to the local level and through each climate relevant sector. Ensuring that the monies channeled to communities are spent where they are needed the most entails tracking mechanisms, as well as ensuring the participation of civil society in monitoring the effective and equitable use of climate finance – including its gender impacts.
 
5. A paradigm shift toward more inclusive long term partnerships and public-private collaboration on climate finance is needed to achieve sustainable development.
Transitioning from a ‘whole-of-government’ approach toward a ‘whole of country’, and possible 'whole of Asia-Pacific region' approach to financing a climate change response will entail a new level of partnership between state and non-state actors. Countries are increasingly using PPPs that leverage public financial instruments to maximum effect, channeling climate finance through development banks and other intermediaries offering more inclusive financial products. Country systems, policies, and tools to enable and measure the impact of such leveraged finance need to be in place to ensure climate finance is reaching those who need it most – including the poor and vulnerable. This will ensure that climate finance is equitable and that all people can participate and benefit.
 
6. International agreements on financing for sustainable development should support domestic environmental and social guidelines and systems for monitoring impact.
International agreements at the UNFCCC, the Sustainable Development Summit and the Third International Conference on Financing for Development will help establish new targets and monitoring frameworks at the national level focused on financing a climate change response and sustainable development. Countries will need support to strengthen their existing monitoring systems to track finance and monitor impacts in line with their climate change and sustainable development strategies, including Intended National Determined Contributions (INDCs), and localised Sustainable Development Goals. These systems should support transparency and accountability both internationally and domestically, for example through civil society, the media, and Parliament.
 
7. In the light of the common but differentiated responsibilities and respective capabilities principle of UNFCCC, the Asia Pacific countries discussed the need for climate finance.
Taking into account the climate convention under the United Nations, Asia Pacific, which is also home to a number of leading economic and financial alliances, has seen some innovative solutions for common problems in financing climate resiliency and sustainable development, including examples of using different public finance instruments for leveraging private sector financing. Indonesia shares its success story with the forum in delivering a domestic and multilateral public finance strategy that attracts private funding, which deepens its capital market and makes investment in new green technology viable. The key message is that just like any other region, Indonesia underlines that Asia Pacific has its own development priorities and financial agenda which requires differentiated delivery mechanism in meeting the region specific challenges, and calls for the countries in the region to stand together delivering the right climate and development finances.  
 
8. Countries and organisations at the Forum participated in the launch of a south-south network to support the exchange of workable solutions that can be implemented back home.
Although the stakes are high, the foundations for appropriate solutions to the challenges that lie ahead are already in place. Countries have already shared experiences in implementing climate public expenditure reviews; piloting climate budget tagging and developing climate fiscal and financing frameworks. The Forum also show case other initiatives such as monitoring frameworks for measuring progress on adaptation as part of sustainable development and approaches to integrating climate analysis within the budget process at sector levels. In addition a new self-assessment index to assess the integration of climate change with the budget process, was shared at the Forum as well as training modules on climate change and public finance. To help sustain communications across countries moving forward, UNDP launched a new peer learning network for ministry of finance officials to help promote south-south exchange as part of the process of integrating climate change within the budget.;

 



Presentations from the workshop
Session 1: Setting the Scene – Asia Pacific Overview

Read More

The objective of this session is to provide an overview of the subject of Climate Finance and Sustainable Development. It will reflect on the different actors involved in delivering development and climate finance in AP. This will be complemented by specific country experiences in Session 2.

 

Session 2: Country Perspectives on Climate Finance and Sustainable Development

Read More

The objective of this to showcase how countries are already managing climate finance in the context of sustainable development. It will highlight the challenges and opportunities of delivering development results going forwards.

Session 3: Regional Skills Building and Peer Learning Network

Read More

The objective of this session is to showcase the regional skills building and Peer learning network for climate policy and public finance which is being established in order to support good governance for climate finance in the medium to long term. The session will demonstrate 'how' this network is being established and what it hopes to accomplish.

 

Session 4: The Central Role of the Budget: Lessons from Strengthening the Governance of Climate Finance

Read More

The objective of this session is to examine the ways in which the budget systems can facilitate the integration of climate finance into the sectors, and in the implementation of sustainable development objectives.

 

Session 5: Delivering Benefits for the Poor through Public Private Partnership

Read More

The objective of the session is to illustrate how several countries have approached the challenge of delivering climate finance in a way that targets the poor, in partnership with the private sector. It will explore a number of critical success factors in the design of large-scale investments, which can enhance the effectiveness of climate finance and thereby ensure long-term sustainable development outcomes.

 

Session 6: Delivering Benefits for the Poor Through Climate Finance at the Local Level

Read More

The objective of this session is to review the partnerships between different local stakeholders in catalyzing pro-poor decision-making processes and in using climate finance to achieve sustainable development objectives. It will also invite community actors to share their good practices in translating sustainable development policies into sustainable development actions.

 

Session 7: South-South Pasar

Read More

This 2-hour session presents an opportunity for all participating countries and organisations to:
1) Showcase informally their success stories and products around incorporating climate change to the public planning and budgeting process
2) Seek out opportunities for, South-South or triangular partnership for future learning and knowledge transfer in strengthening the Governance of Climate Change Finance.

 

Session 8: Keeping Track of Climate Finance

Read More

The objective of the session is to present the different tracking tools that are being used by various stakeholders.

 

Session 9a: Learning from Tracking Adaptation Measuring Development (TAMD)

Read More

Session 9b: Role of Civil Society and Parliament in Monitoring Climate Finance and Development Outcomes

Read More

The objective of the session is to present the different climate finance tracking and monitoring systems, and how they can inform measurement of sustainable development.

 

Session 9c: Tracking the integration of the climate change into national planning and budgeting systems

Read More

The objective of the session is to present the different climate finance tracking and monitoring systems, and how they can inform measurement of sustainable development.

 

Session 10: Linking Domestic and International Frameworks

Read More

The objective of this session is to discuss the ways in which domestic systems link up with international monitoring and measuring frameworks that are currently being developed under the UNFCCC, the SDGs, and the Financing for Development.

 



Background documents
Programme
Joanne Manda
Climate Finance Specialist - UNDP Bangkok Regional Hub
Sujala Pant
Programme Specialist- Local Governance - UNDP Bangkok Regional Hub