Transcript JOINT MDB CLIMATE FINANCE TRACKING APPROACHES Mafalda Duarte – Chief Climate Change Specialist, AfDB Claudio Alatorre – Senior Climate Change Specialist, IDB Joint MDB.

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
 Why is Climate Finance Tracking Important?
 Some Background… Current Tracking Systems
 Joint MDB Adaptation Finance Tracking Approach
 2011 MDB Adaptation Finance Numbers
 Joint MDB Mitigation Finance Tracking Approach
 2011 MDB Mitigation Finance Numbers
 Next steps
WHY IS CLIMATE FINANCE TRACKING IMPORTANT?
 In order to build trust and accountability with regards to climate
finance commitments, and to monitor trends and progress in climaterelated investments
 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
 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.
 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).
 …in which sense do MDBs want to go beyond these efforts?...
JOINT MDB CLIMATE FINANCE TRACKING APPROACHES
 The joint MDB approaches are work in progress aimed at assisting
MDBs and other organizations
 Reporting is linked to the MDBs’ financial commitments
 All types of resources are eligible for reporting irrespective of origin including both the MDBs’ own resources as well as the MDBs’
managed investments
 To prevent double counting, all external resources are clearly
separated from the MDBs’ own resources
 All types of instruments deployed (debt, equity, guarantees, technical
assistance and grants) are included
JOINT MDB CLIMATE FINANCE TRACKING APPROACHES
 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.
 Classification can be made at the level of project components, subcomponents or activities
JOINT MDB ADAPTATION FINANCE TRACKING APPROACH
 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., socioeconomic 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
example 1:
Urban
Development
Possible changes in the
frequency/severity of flash
floods and storm surges
brought by CV&C
Design of project takes
into account the
anticipated impacts of
CV&C
Project will help better cope with
CV&C through activities such as
rehabilitation and upgrade of urban
water drainage systems
Project aims to
increase water
productivity in existing
irrigated areas to
increase resilience to
CV&C
Project will help better cope with
CV&C by introducing water-saving
measures such as introduction of
crops which are less water
intensive and higher value,
preservation of soil moisture and
fertility
CV&C likely to aggravate
Project
water scarcity, putting at
example 2:
risk irrigated agriculture –
Water Supply an essential source of
& Access
food security, employment
and livelihoods
Project
example 3:
Rural
Development
Project will help enhance rural
Farmer communities likely Project tackles drought livelihood through drought
to suffer from CV&C,
risk as CV&C could
adaptation mechanisms like water
through longer dry spells
otherwise imperil
resources management,
and increased variability in livelihood of rural
diversification of farm and non-farm
monsoon patterns
communities
livelihoods and climate-risk
management tools
CV&C: Climate variability and change
MDB ADAPTATION FINANCE, 2011 (USD M)
MDB
AfDB
ADB
EBRD
EIB
IDB
WB
TOTAL
MDB resources
Investments and
Policy-based
technical
instruments
assistance
593
585
181
225
13
275
2,080
224
3,677
499
External resources
Investments and
Policy-based
technical
instruments
assistance
2
172
16
65
1
3
85
3
341
• 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
 The MDB approach for mitigation is based on the following principles
1.
2.
3.
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.
Mitigation activities considered in this joint approach are assumed to
lead to emission reductions, based on past experience and/or
technical analysis.
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
AfDB
ADB
EBRD
EIB
IDB
IFC
WB
TOTAL
MDB resources
Investments and
Policy-based
technical
instruments
assistance
859
2,196
3,400
2,487
1,284
457
1,664
4,592
1,588
16,482
2,045
External resources
Investments and
Policy-based
technical
instruments
assistance
185
224
132
134
3
17
412
3
1,104
• Total MDB mitigation finance in 2011 applying the approach retroactively
was USD 19.6 billion.
NEXT STEPS
 In May 2013 the MDBs will jointly report 2012 figures;
 Operationalization of the approach by each MDB;
 Evaluation of its application in 2011 to fine-tune the approach and its
application;
 Engagement with OECD and other institutions dealing with MRV of
climate finance;
 Support to non-Annex I countries.
JOINT MDB WORKING GROUP FOCAL POINTS
 Adaptation
• Mafalda Duarte, AfDB, [email protected]
• Charles Rodgers, ADB, [email protected]
• Alfred Grunwaldt, IDB, [email protected]
• Craig Davies, EBRD, [email protected]
• Nancy Saich, EIB, [email protected]
• Vladimir Stenek, IFC, [email protected]
• Philippe Ambrosi, WB, [email protected]
 Mitigation
• Mafalda Duarte, AfDB, [email protected]
• Jiwan Acharya, ADB, [email protected]
• Andreas Biermann, EBRD, [email protected]
• Matthias Zoellner, EIB, [email protected]
• Claudio Alatorre , IDB, [email protected]
• Lucas Bossard, IFC, [email protected]
• Philippe Ambrosi, WB, [email protected]