Supporting South Asia’s climate finance readiness

Climate change is hurting the growth and development of South Asia. The signs are everywhere.
Pakistan experienced a devastating flood in 2010 that swamped 1/5th of the country and left millions homeless. Experts are calling it the worst climate induced disaster so far . According to Assam’s (India) State Action Plan on Climate Change, longer droughts and dry periods will lead to increase in forest fires, adversely affect biodiversity and the livelihood of the people . In Nepal’s Himalaya, total estimated ice reserve between 1977 and 2010 has decreased by 29 per cent (129 cubic kilometre) . In Afghanistan, communities dependent on rainfall for their livelihoods are observing decline in spring rainfall leading to a direct impact on households’ ability to produce food and earn income .
The Governments are aware and looking for solutions. They may not fully understand the role climate change is playing in exacerbating these factors, but they are cognizant of the changing environment. “We decided to build an Early Warning System for flood forecasting. We were thinking of 2050,” said Muralidhar Panda, Deputy Director Flood Forecasting and Flood Risk Management, Government of Odisha.
Experience suggests that the availability of finance is not the problem, but accessibility is. There are plenty of domestic and international funding channels available to undertake resilience activities. For instance, the Green Climate Fund (GCF) is set to become the most important global institution for transferring climate funding from developed to developing countries. It is intended to be the centrepiece of Long Term Financing under the United Nations Framework Convention on Climate Change (UNFCCC), which has set itself a goal of raising $100 billion per year by 2020.
Some governments aren’t fully aware of these opportunities and others are unable to tap into them because of their rigorous technical requirements. International funds, in particular, demand the presence of a robust system of climate finance readiness i.e. A country’s ability to put in place safeguards, robust fiduciary measures and engage of a wide range of institutional actors.

Key insights from the ground

Department of International Development (DFID) is providing technical support to countries in South Asia to access international climate finance through Action on Climate Today (ACT) programme in South Asia. ACT is helping catalyse finance climate readiness within four countries i.e. Afghanistan, Pakistan, India and Nepal. These are some of the insights that came through from the Programme.

  • The first step, last: Funding application is what immediately comes to mind when thinking of climate change adaptation and mitigation activities. However, experience of securing the first GCF funding in India, Ground Water Recharge and Solar Micro Irrigation, as well as Pakistan, Scaling‐up of Glacial Lake Outburst Flood (GLOF) risk reduction in Northern Pakistan, reveals something different.

“The application process for funding is the last step in this cycle. It needs to be preceded by rigorous groundwork of identifying the adaptation gap, prioritising vulnerable sectors, and designing interventions consistent with national priorities,” said Dr Aditya V Bahadur who works with the Action on Climate Today programme and with the risk and resilience programme of the Overseas Development Institute.”

  • Similar but differentiated entry points: Arguments that work with one country might not hold sway with another. The entry points for climate finance discussions will vary based on political priorities. They can include growth, development, disaster management, Sustainable Development Goals etc.

For instance, the damage to the ecosystem in Assam’s most famous wildlife sanctuary, Kaziranga National Park, got the government and judiciary to seriously consider climate resilient livelihood intervention in the region.

  • Building trust: Accessing climate finance is not a technocratic, linear exercise. It is heavily politicised and requires finding your way through a maze of conflicting interests and power centres. Investing time and resources, to build trust, can lead to a rich dividend over the course of time.

A case study on Technical Entry points states that ACT’s success in this region can be attributed to having a clear understanding of power structures, investing time and resources in Long Range Planning and Context Assessments. For example, one ACT Team Leader drafted the Minister’s speech for COP 21, and similar drafting of key deliveries for senior politicians has also been a feature in many locations. These complimentary activities helped build relationships and trust.

  • Top down and bottom up: It is not enough to get buy-in from the central governments alone. To see impact, it is important to work top-down and bottom-up with the state and provincial governments.

“Accessing Climate Finance was considered a federal subject in Pakistan. Following the 18th Amendment to the Constitution, powers were delegated to the provinces. The issue was that the provinces lacked capacity. They were in the dark with regard to the different climate financing windows available. In addition to this they also lacked the skill set to properly develop projects proposals. ACT, through Climate Finance Unit, undertook a vigorous national level capacity development programme. This ensured a basic level of understanding with regard to financing,” said Waleed Khatak, Technical Expert ACT Pakistan.

  • Carrot and carrot approach: Providing a window of additional financing is the means to have a larger discussion on climate change actions, not the end. It allows us to start a conversation about climate proofing plans and policies across sectors. Thus, international funding is the hook to developing a larger partnership.

“It’s difficult to initiate Climate change interventions as a standalone entity. They are generally appreciated as piggybank on other development projects. Climate Funding (both public and private) helps prioritising the climate relevance of large development programmes.  When we go to governments with an added resource to meet their financial needs then there is greater uptake and we can make appropriate adjustments in the existing projects to highlight the climate risks and mitigation and adaptation benefits,” said Naman, ACT Maharashtra team leader.

Return on Investment

ACT has able to help states and countries access USD 143.30 million in global and national climate finance and to shape other organisations’ programmes for additional USD 67.23 million. This implies that for every 1.29 dollars spent in activities aiming to improve access to climate finance, ACT generated 208.14 dollars of additional leveraged funds.
Our work can go a long way in ensuring South Asia has the ecosystem in place to look after its growth, development and most importantly its people. The ability to build government ownership, support rigorous groundwork and use a flexible way in an ever-changing landscape will determined our impact in South Asia.

This article is written by Anmol Arora. Anmol is the Knowledge Management Officer for Action on Climate Today initiative. Contact him at anmol.arora@actiononclimate.today. 

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