Fulfilling national and international commitments to reduce greenhouse gas emissions, as well as adapting territories, societies, and ecosystems to a changing climate, will require the mobilization and management of significant financial resources. While ensuring that developed countries provide financial resources to developing countries is critical, as is stipulated in the United Nations Framework Convention on Climate Change, there is also a need to mobilize resources at the national level in developing countries. The Paris Agreement has invited all parties to contribute to climate action, including the mobilization of finance and making these financial flows consistent with low greenhouse gas emissions and resilient development. This means that all countries united by common principles should, within their respective capacities and challenges, create public policies and budgets that help tackle climate change.
The Climate Finance Group for Latin America and the Caribbean and the International Budget Partnership present this methodological guide, which is designed to support the work of civil society and other non-governmental stakeholders, as well as governmental stakeholders from central and local governments, and legislative representatives interested in exploring the public budget’s role in tackling climate change. Download PDF.
Climate change is one of the greatest challenges facing the world today. Significant amounts of finance are and will be required to enable governments around the globe to support adaptation and mitigation efforts. There is growing interest among government, civil society, the private sector and international actors on how to mobilize finance, from both international and national sources, to address the climate crisis.1 Climate finance creates opportunities to mitigate the worst effects of climate change on poor and marginalized groups. Whether it will do so or not depends on the strength of public finance accountability ecosystems through which funds – both domestic and from international donors – are allocated and executed to deliver climate-adapted local development. In this paper, we will use the term “CFA ecosystem” to refer to the public finance accountability ecosystem, but with particular attention to climate-specific funding for inputs and development outcomes related to climate change adaptation.
This report synthesizes lessons learned from a two- year pilot project supported by the Swedish Postcode Foundation and implemented in Bangladesh, Nepal, and Indonesia by ActionAid Bangladesh (AAB), Forest Resource Studies and Action Team (ForestAction) Nepal, the Indonesian Traditional Union of Fisherfolk (KNTI) and the National Center for Indonesia Leadership (INISIATIF) with support from the International Budget Partnership (IBP). Launched in 2019, the project set out to explore:
- How CFA ecosystems function
- The strategies and roles of various actors within them – including civil society – to strengthen and engage in the systems to ensure that resources reach marginalized communities.
The report synthesizes lessons from this project on what needs to be done to ensure that climate finance is used responsively and accountably to mitigate the worst effects of climate change on poor and marginalized groups. The purpose of this study, conducted by the TAP Room, was to draw out insights and learning from the project to deepen knowledge of CFA ecosystems for the organizations involved and the broader field. The research team conducted a desk review of relevant project documents, interviews with IBP staff, and interviews and focus groups with the implementing civil society organizations (CSOs) in Bangladesh, Nepal, and Indonesia. However, the study is not intended to evaluate IBP’s contribution to, nor the final outcomes of, of the CSO efforts.
Download the full report and executive summary.
Effective climate budgeting requires meaningful participation and systematic public engagement. Without these it is difficult for governments to provide climate financing that aligns with household priorities, and households will continue to spend large amounts of money responding and adapting to climate change without, and sometimes against the flow of, public financing.
Using a case study approach, this paper explores the role of public participation in climate budgeting in Nepal, Bangladesh, and Indonesia by assessing these governments’ adherence to the Global Initiative for Fiscal Transparency (GIFT) principles of public participation in fiscal policy. It also analyses secondary data on household climate and disaster priorities against government climate and disaster expenditure estimates, and finds that households in these countries are significant financiers of climate resilience. But their governments are not yet enabling households to meaningfully participate throughout the public financial management (PFM) process that would lead to better alignment and targeting of the public climate budget.
The paper also identifies cross-country learning and makes recommendations to support improvements in public accountability and participation processes, particularly through interventions to improve national adherence to the GIFT principles. Download the paper.