Increasing transparency in climate finance: what role for the UNFCCC NAMA Registry?

This piece was written by Charlene Watson of the Overseas Development Institute.

Since 2007, parties to the UNFCCC have been discussing the design of a registry of Nationally Appropriate Mitigation Actions (NAMAs). This Registry would match developing country actions with possible sources of international financial support. Such a matching function may be difficult to realise, as funders rarely ‘shop’ in such a way for projects, but the emerging NAMA Registry proposal and protocol could improve the transparency of financial support for climate change mitigation.

What value can the registry add?

NAMAs take on many forms, but are broadly defined as a set of country-driven, sustainable development-compatible actions aimed at reducing emissions. The intention of the Registry is to compile developing country NAMAs in order to match them with developed country support through a web-based platform. This support might take the form of technological capacity or assistance, direct mitigation actions, or finance. The Registry has the potential to provide information on developing countries’ climate finance needs and whether such needs are being, or can be, met. Such transparency can foster trust between developed and developing countries in the UNFCCC process to deliver fair and effective outcomes

A number of climate finance tracking initiatives already exist, including our ODI-HBF Climate Funds Update. Climate Funds Update monitors finance from pledge to disbursal in 23 of the dedicated public climate funds and initiatives. Other initiatives track Fast Start Finance, finance for reducing emissions from forestry activities, and climate finance flowing through national budgets. Such initiatives provide crucial data on where climate finance is going and to what activities. They also help monitor whether developed countries are meeting their collective pledges to mobilise US$ 30 billion between 2010 and 2012 and the longer term objective of making available US$ 100 billion a year by 2020.

NAMAs recorded in the Registry won’t necessarily sum to the total cost of mitigation activities in any given country, but will provide one insight into how much and what type of finance is needed by developing country governments. In doing so, the Registry would go beyond other climate finance tracking initiatives.

However, it remains to be seen how the NAMAs already submitted to the UNFCCC (now totalling close to 50), and also recorded in the Ecofys NAMA database, will be integrated in the Registry, as these are not necessarily seeking international financial support. There are also questions about how the Registry will reflect information on finance delivered through other forms, such as through developed countries’ biennial reports on action.

But so far, engagement with the registry has been limited

In August 2012, the UNFCCC Secretariat requested parties to submit NAMAs to be included in a prototype Registry.

Three countries have submitted information on NAMAs seeking preparation support. Mali has requested US$ 40,000 support each for preparation of two NAMAs for energy efficiency and renewable energy, and  forestry, respectively (both note that capacity building and technical support is also needed). Ethiopia has requested US$ 400,000 for support for preparation of an interurban electric rail NAMA. Uruguay’s three requests for sustainable housing, low emission agricultural technology and wind energy NAMAs amount to US$ 1,675,000.

Two NAMAs have been submitted seeking support for implementation: Chile seeks a US$7.5 million grant for implementation of a national forestry and climate change strategy, while Uruguay has requested a US$2 million grant for integrating photovoltaic solar energy into the national grid. Three more NAMAs have been submitted for recognition. All submissions have requested grant finance, and so far the Registry contains information from only four countries.

No submissions on support for NAMAs have been received from developed countries: a sticky issue for recent negotiations in Doha.

Will the Registry be a useful addition to the international climate policy architecture?

Commitments were made in Doha to have a fully operational prototype by April 2013, on which comments will be invited. Participation in the Registry is voluntary and there are minimal requirements from Parties on information submitted. Developed country incentives to engage with the Registry are unclear. Its function in practice as a clearing house for information on NAMAs, and in improving the transparency of climate finance, remains to be seen.

To have any impact in improving the transparency of action and support, greater engagement with the design of the registry is needed. This would ensure that it presents information that helps us understand finance needs and assess the impact of supported programmes. Those institutions and individuals already involved in tracking climate finance may have useful insights to share on these practical challenges.

Fast-Start Finance: where do we stand at the end of 2012?

This piece was co-authored by Smita Nakhooda of the Overseas Development Institute and Taryn Fransen of the World Resources Institute, with inputs from Noriko Shimizu (International Group for Environmental Strategies) and Sven Harmeling (Germanwatch).

‘Developed countries self-report that they have delivered more than $33 billion in fast-start climate finance between 2010 and 2012, exceeding the pledges they made at COP 15 in Copenhagen in 2009. But how much of this finance is new and additional?’ Full text available here.

Climate finance tracking 2.0

CFU is glad to feature this guest commentary on climate finance transparency from our colleague Maya Forstater, Climate Finance Advisor to Publish What You Fund.

They say if you like sausages you should never visit a sausage factory. But users of Climate Funds Update’s data tools may be interested to read about the process involved.

The sausage-makers – Charlene Watson, Smita Nakhooda, Alice Caravani, Liane Schalatek – have helpfully outlined the process in their report on The Practical Challenges of Monitoring Climate Finance. Over the past three years they have painstakingly tracked 22 funds; combing through websites, trustee reports, press releases and notes from civil society organisations to identify funding decisions and work out how far the money had got along the chain from pledge to disbursement. They double check this with the Funds involved, before publishing it, then going back two months later to start the whole process again in order to keep the data up-to-date.

All this effort is worthwhile because credible, comparable and up-to-date information is essential to understanding who benefits from public climate financing, and how scarce public resources are being used, and to building trust.

The task is made harder by climate funds that sometimes don’t report regularly, by inconsistent terminology, and by the lack of a system for tracking funding between funds and projects, leading to the potential for double counting.

Furthermore, Climate Funds Update is just one of a cluster of initiatives monitoring overlapping flows of climate finance. Most recently, the multi-lateral development banks released their first Joint MDB Report on Climate Finance which sums together both the dedicated funds which feature on Climate Fund Update, but also mainstream development funding with adaptation or mitigation co-benefits.

The challenge of tracking climate finance will only become trickier as the Fast Start period comes to an end, and countries shift towards the longer-term goal of scaling up to mobilise US$100 billion a year of ‘new and additional’ funding from a wider variety of sources. The Climate Policy Initiative last year mapped the landscape of climate finance revealing spaghetti strings of intermediaries, instruments, channels and end-users. Overall they counted US$97 billion worth of public and private flows but emphasised that this could not be equated to the US$100 billion promised by developed countries in the Copenhagen Accord, as it is not yet clear what should be counted ‘in’ and what should be counted ‘out’.

In their report to the upcoming COP 18 meeting, the co-chairs of the  UNFCCC Work Programme on Long Term Financing, Georg Børsting and Zaheer Fakir, highlight the urgent need to “improve the transparency of climate finance at the international level while keeping systems simple and manageable.”[1]. One key obstacle is the lack of global agreement on what counts as climate finance, what ‘mobilising’ means, and against what benchmark ‘new and additional’ should be counted.  These thorny issues will be amongst the topics discussed in Doha, and are likely to go forward to future COPs.

But there is a system already in operation, which could make climate finance data more accessible and useful, and take a great deal of the painstaking effort out of tracking it.

The problem of hard to publish, hard to find, hard to use data is common to both climate finance and development cooperation. In our report Towards Climate Publish What You Fund aidinfo argue that a new approach to data transparency, which originated in the aid sphere could be used unlock climate finance data, without blurring the (as yet undefined) boundaries of what can be counted as climate finance for the purposes of UNFCCC commitments.

The International Aid Transparency Initiative (IATI) is an open data standard that enables funders to publish detailed information in a timely, accessible and comparable way on their own websites. The location of the data is recorded in a central registry which acts as a single point of access for data users.  Crucially, this makes the data machinereadable, unlocking it from individual databases and reports and opening it up to automated collation and interactive data use and visualisation.

Those providing data to IATI commit to:

  • Can update their information at least quarterly, preferably monthly;
  • Publish forward-looking data, such as project budgets, planned disbursements, and aggregate country budgets as well as detailed project  information,  such as which organisation receives the funds, details of disbursements and expenditure, and contact details;
  • Publish in a way that allows funds to be tracked through the funding chain and data and reconciled with the financial year of the recipient country.

Published in a common data format, it is readily comparable and easily combined with other datasets to meet users’ individual needs. The standard is not limited to ‘aid’. All funders including providers of ODA and OOF (other official flows), humanitarian flows, south-south development co-operation, NGOs, foundations and other private donors, are able to publish to the IATI standard. Data users are able to filter the data they need by source type, theme, location or any number of criteria they choose.

Countries that have agreed to implement IATI include Australia, Belgium, Canada, Denmark, Finland, Germany, Ireland, the Netherlands, New Zealand, Norway, Spain, Sweden, Switzerland, the UK and the US. This means that over a third of all fast start finance has come from agencies that are already committed to implementing the IATI standard. The World Bank, the European Commission, the UNDP and other multilateral funders have also championed the system, although to date it has not been implemented in the climate specific trust funds.

Small changes to the IATI standard would enable funders to tag the information they publish about funding flows with more detailed climate change markers, for example indicating the percentage of each budget intended for climate mitigation, adaptation or REDD goals and to state whether this is part of a UNFCCC climate finance commitment.

The IATI standard itself would not answer the political questions determining what is ‘in’ or ‘out’ for the purposes answering the US$100 billion dollar question. But it would provide a simple, manageable and powerful system to improve climate finance transparency; providing finance and line ministries, civil society, legislators and citizens with timely, comprehensive, accessible and comparable information about climate finance flows which could then be mapped onto domestic budgets and priorities.

Maya.forstater@publishwhatyoufund.org


[1] Note by the Co-Chairs, Report on the workshops of the work programme on long-term finance, November 2012: http://unfccc.int/resource/docs/2012/cop18/eng/03.pdf.