This article was originally published on the CFR website on May 04, 2015
Claire Bernard, Director of the Sustainable Development and Regional Planning Division at the Planning Institute of Jamaica (PIOJ), provides insights into how Jamaican institutions have prepared to receive and manage international climate finance and what their experience can offer others. Jamaica is the recipient of US$10 million from the Adaptation Fund. Part 1 in a two-part series; read Part 2 here. Interview by Anna Hickman, CDKN.
1. What does it mean for a country to be ‘climate finance ready’?
Our understanding of climate finance readiness is having the policy and institutional framework, technical expertise and project management capabilities that:
- Give confidence to developed country partners that the resources granted for adaptation or mitigation are spent in an accountable, transparent and efficient way;
- Align the initiatives pursued to broader national development priorities; and
- Deliver tangible and measureable outputs which contribute to the desired outcomes in a sustainable manner.
2. What do you consider are the key elements of being ready to attract international climate finance – especially public sector finance?
- Having existing policy and governance frameworks and demonstrated policy commitment to address climate change. In Jamaica’s case this is reflected in Vision 2030 Jamaica – National Development Plan; Medium Term Socio-economic Policy Framework; Climate Change Policy Framework (draft White Paper); Growth Inducement Strategy; National Energy Policy 2009-2030; Jamaica Sustainable Energy Roadmap; Ministry with climate change portfolio (including the Climate Change Division), Climate Change Advisory Committee, etc.
- Identifying climate change as a national priority and incorporating it as an important pillar or cross-cutting thematic area in country strategies or country programmes concerned with International Development Partners (IDPs). Jamaica is also party to the United Nations Framework Convention on Climate Change (UNFCCC) and prepares National Communications which are used to guide policies, projects, etc (two have been prepared thus far, the third is to be finalised by 2017).
- Information/data on climate impact is available. Jamaica has tracked and documented the impact of some climate hazards, downscaled regional and other climate models and prepared long-term climate scenarios to 2100 with analysis of sectoral implications. Jamaica has also prepared near-term climate scenarios with emphasis on specific geographic areas and sectors.
- Having a cadre of technical experts (or access to such experts) via universities and research institutions.
- Demonstrating institutional capability. The country should be able to identify institutions with related experiences or mandates for managing climate finance. Such institutions should havedocumented systems (including fiduciary management systems) and procedures.
- Having in place programmes of work and plans of action relating to climate change (e.g., Sector Plans, NAPs, NAPAs, NAMAs).
3. What experience do you have with attracting private sector finance for adaptation or mitigation activities and what have been the key factors in your success?
Generally, the local private sector has invested in mitigation/adaptation activities to support and safeguard their own businesses in order to increase efficiency and reduce cost, or to create new products. Where investments with broader national impact are made, there is usually a profit motive. During implementation of the Government of Jamaica/EU/UNEP Climate Change Adaptation and Disaster Risk Reduction Project (completed in December 2013), one large hotelier partnered with the project to support coastal restoration activities. The partnership was successful because the hotelier was aware of the value of the coastal ecosystems for the area, and also for their property and tourism product.
At a larger, more strategic level, the country has applied to access the private sector funding set aside under the Pilot Program for Climate Resilience, and various renewable energy projects involving foreign investors are being pursued. There is also evidence that development projects (many funded by international private sector interests) are being implemented through public-private partnerships and incorporate climate change adaptation and mitigation measures.
4. What range of activities do you see developing countries taking to get climate finance ready and how does this look different depending on whether it’s a low-income country (LIC) or a middle-income country (MIC)?
- Becoming more aware of and understanding the climate finance landscape.
- Creating the appropriate policy environment.
- Conducting analysis of needs and gaps – including institutional capabilities or gaps, technical know-how, systems and procedural deficiencies.
- Identifying needs and developing a package of plans and project concepts.
- Developing or accessing adequate capacities for negotiation and advocacy.
- Collaborating /working with experts/other States with experience, to build capacity.
While the above is relevant for all developing countries, it will be especially relevant to LICs whose capacity is likely to be less. LICs might therefore need to establish regional partnerships for negotiating access or identifying and empowering advocates to work on their behalf.
5. What, in your experience, are proving to be some of the greatest hurdles to attracting climate finance from foreign sources?
- Inadequate information; lack of simplified, harmonised /standardised rules of access across financing facilities. This can be prohibitive and increases the cost of access.
- Qualifying requirements – fiduciary standards, technical competence etc.
- Compartmentalisation of the development agenda and competition among issues for funding.
- Commitment/delivery gap among the developed countries – declining official development assistance (ODA) and funding shortfall for the MDGs.
- Countries having the “required capabilities”, including knowledge of the landscape and its rules of access.
- Development status of some countries e.g. many Caribbean Small Island Developing States are categorised as middle income countries and therefore have limited access to some resources.
- Inadequate or less than positive experience in managing and implementing internationally financed projects.
- Structural challenges in some countries, e.g.indebtedness, fiscal constraints, absorptive capacity including public expenditure ceilings.