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Climate Finance Tracking Workshop - African Development Bank

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Climate Finance Tracking Workshop - African Development Bank Powered By Docstoc
					JOINT MDB CLIMATE FINANCE
   TRACKING APPROACHES
Mafalda Duarte – Chief Climate Change Specialist, AfDB
Claudio Alatorre – Senior Climate Change Specialist, IDB


               Joint MDB COP18 Side-Event
         Hosted by the African Development Bank
       Doha, 5th December 2012, Renaissance Hotel
OUTLINE
v Why is Climate Finance Tracking Important?

v Some Background… Current Tracking Systems

v Joint MDB Adaptation Finance Tracking Approach

v 2011 MDB Adaptation Finance Numbers

v Joint MDB Mitigation Finance Tracking Approach

v 2011 MDB Mitigation Finance Numbers

v Next steps
WHY IS CLIMATE FINANCE TRACKING
IMPORTANT?
v In order to build trust and accountability with regards to climate
  finance commitments, and to monitor trends and progress in climate-
  related investments
v For AfDB it is also important because it will…
 • support better project design;
 • allow us to track and report climate finance flows internally and
    externally;
 • facilitate the assessment of results from climate investments;
 • facilitate the mobilization of resources from capital markets.
SOME BACKGROUND… CURRENT TRACKING
SYSTEMS
v UNFCCC National Communications: Annex II countries report funding
  activities to developing countries to promote CC mitigation and
  adaptation. Non-Annex I countries requested to provide information on
  support received.
v OECD “Rio Markers”: mitigation since 1998, adaptation since 2010.
  Coders have three options: that adaptation/mitigation is a “principal
  objective”, “significant objective”, or “not targeted to the policy
  objective” (OECD).
v …in which sense do MDBs want to go beyond these efforts?...
JOINT MDB CLIMATE FINANCE TRACKING
APPROACHES
v The joint MDB approaches are work in progress aimed at assisting
  MDBs and other organizations
v Reporting is linked to the MDBs’ financial commitments
v All types of resources are eligible for reporting irrespective of origin -
  including both the MDBs’ own resources as well as the MDBs’
  managed investments
v To prevent double counting, all external resources are clearly
  separated from the MDBs’ own resources
v All types of instruments deployed (debt, equity, guarantees, technical
  assistance and grants) are included
JOINT MDB CLIMATE FINANCE TRACKING
APPROACHES
v Classification is made ex-ante project implementation:
 • The qualification of a project under this methodology does not imply
   evidence of the eventual delivery of climate change benefits. Inclusion
   is not a substitute for project-specific ex-post evidence of benefits, and
   projects seeking to demonstrate such effects must do so through
   project-specific data.

v Classification can be made at the level of project components, sub-
  components or activities
JOINT MDB ADAPTATION FINANCE TRACKING
APPROACH
v The MDB approach for adaptation is based on the following principles
 1. It is purpose, context and activity based. A project must fulfill three
     design process criteria for finance to be reported. It must:
        o Include a statement of purpose or intent to address or improve climate
          resilience in order to differentiate between adaptation to current and
          future climate change and good development;
        o Set out a context of climate vulnerability (climate data, exposure and
          sensitivity), considering both the impacts from climate change, as well
          as climate variability related risks;
        o Link project activities to the context of climate vulnerability (e.g., socio-
          economic conditions and geographical location), reflecting only direct
          contributions to climate resilience.
JOINT MDB ADAPTATION FINANCE TRACKING
APPROACH
 2.   It follows a conservative approach:
       o To incentivize good adaptation projects to speed up transition to
         resilient communities and systems;
       o Activities that do not explicitly meet all the above criteria are not
         included in reporting.
 3.   Project activities should:
       o Address current drivers of vulnerability, especially in poorest countries
         or communities when specifically designed in response to climate risks;
       o Build resilience to current and future climate risks;
       o Incorporate climate risks into investments, especially for infrastructure
         with a long lifespan;
       o Incorporate management of climate risk into plans, institutions and
         policies.
 EXAMPLES OF APPLICATION OF THE 3
 CRITERIA
  Examples         Vulnerability context          Specific intent                 Activity linkage

Project         Possible changes in the       Design of project takes    Project will help better cope with
example 1:      frequency/severity of flash   into account the           CV&C through activities such as
Urban           floods and storm surges       anticipated impacts of     rehabilitation and upgrade of urban
Development     brought by CV&C               CV&C                       water drainage systems
                                                                         Project will help better cope with
             CV&C likely to aggravate         Project aims to
                                                                         CV&C by introducing water-saving
Project      water scarcity, putting at       increase water
                                                                         measures such as introduction of
example 2:   risk irrigated agriculture –     productivity in existing
                                                                         crops which are less water
Water Supply an essential source of           irrigated areas to
                                                                         intensive and higher value,
& Access     food security, employment        increase resilience to
                                                                         preservation of soil moisture and
             and livelihoods                  CV&C
                                                                         fertility
                                                                  Project will help enhance rural
                Farmer communities likely Project tackles drought livelihood through drought
Project
                to suffer from CV&C,         risk as CV&C could   adaptation mechanisms like water
example 3:
                through longer dry spells    otherwise imperil    resources management,
Rural
                and increased variability in livelihood of rural  diversification of farm and non-
Development
                monsoon patterns             communities          farm livelihoods and climate-risk
                                                                  management tools
CV&C: Climate variability and change
MDB ADAPTATION FINANCE, 2011 (USD
M)
                           MDB resources                     External resources
                Investments and                    Investments and
     MDB                            Policy-based                          Policy-based
                    technical                          technical
                                    instruments                           instruments
                   assistance                         assistance
     AfDB              593                -                 2                   -
     ADB               585                -               172                   -
     EBRD              181                -                16                   -
      EIB              225                -                65                   -
      IDB               13               275                1                   3
      WB              2,080              224               85                   -
    TOTAL            3,677              499               341                   3

• Total MDB adaptation finance in 2011 applying the approach retroactively was
  USD 4.5 billion.
• Given that the data are for a single year, they should not be used to make any
  judgments regarding the MDBs’ commitment and engagement in delivering
  adaptation finance.
JOINT MDB MITIGATION FINANCE TRACKING
APPROACH
v The MDB approach for mitigation is based on the following principles
 1. It is activity-based, namely, it focuses on the type of activity to be
     executed, and not on its purpose, the origin of the financial
     resources, or its actual results.
 2. Mitigation activities considered in this joint approach are assumed to
     lead to emission reductions, based on past experience and/or
     technical analysis.
 3. Some activities provide both mitigation and adaptation co-benefits.
     As a result, the financing for adaptation and mitigation should not be
     added together to prevent double counting.
MDB MITIGATION FINANCE, 2011 (USD
M)
                          MDB resources                     External resources
               Investments and                    Investments and
     MDB                           Policy-based                          Policy-based
                   technical                          technical
                                   instruments                           instruments
                  assistance                         assistance
     AfDB             859                -               185                   -
     ADB             2,196               -               224                   -
     EBRD            3,400               -               132                   -
      EIB            2,487               -                 -                   -
      IDB            1,284              457              134                   3
      IFC            1,664               -                17                   -
      WB             4,592             1,588             412                   -
    TOTAL          16,482             2,045             1,104                  3


• Total MDB mitigation finance in 2011 applying the approach retroactively
  was USD 19.6 billion.
NEXT STEPS
v In May 2013 the MDBs will jointly report 2012 figures;
v Operationalization of the approach by each MDB;
v Evaluation of its application in 2011 to fine-tune the approach and its
  application;
v Engagement with OECD and other institutions dealing with MRV of
  climate finance;
v Support to non-Annex I countries.
JOINT MDB WORKING GROUP FOCAL
POINTS
v Adaptation
 • Mafalda Duarte, AfDB, m.duarte@afdb.org
 • Charles Rodgers, ADB, crodgers@adb.org
 • Alfred Grunwaldt, IDB, alfredg@iadb.org
 • Craig Davies, EBRD, daviesc@ebrd.com
 • Nancy Saich, EIB, n.saich@eib.org
 • Vladimir Stenek, IFC, vstenek@ifc.org
 • Philippe Ambrosi, WB, pambrosi@worldbank.org
v Mitigation
 • Mafalda Duarte, AfDB, m.duarte@afdb.org
 • Jiwan Acharya, ADB, jacharya@adb.org
 • Andreas Biermann, EBRD, biermana@ebrd.org
 • Matthias Zoellner, EIB, m.zoellner@eib.org
 • Claudio Alatorre , IDB, calatorre@iadb.org
 • Lucas Bossard, IFC, lbossard1@ifc.org
 • Philippe Ambrosi, WB, pambrosi@worldbank.org

				
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