FILM: Countries put a price tag on implementing their national climate commitments
In the third set of video interviews from CDKN’s South-South Learning Exchange on bankable project development, two international experts – CDKN’s Ari Huhtala and the UNFCCC’s Miki Higashi – talk about the finance and project development opportunities presented by the Paris climate agreement, while Veronica Villena of Peru’s Ministry of Environment provides insight on the realities of climate policy development and financing at the national level. Interviews by Jorge Villanueva and Zabreen Hasan of CDKN.
Ari Huhtala, Deputy CEO for Policy and Programmes, CDKN stresses that the Paris climate agreement provided the world with the Nationally Determined Contributions (NDCs), but did not provide an investment plan. “Climate finance is an excellent way of catalysing investment but you should remember that we are talking about such transformational change that you cannot imagine it will happen with the funds available from the official climate funds,” he says. The challenge is to package funds from different sources, and to leverage public and private funds at a massive scale:
Miki Higashi, UNFCCC Secretariat explains that although the UNFCCC isn’t an implementing agency, it has a facilitating role. It encourages countries to assess their needs for climate finance and aims to be ‘catalytic’ in helping countries to move from ‘intended’ to ‘implemented’ Nationally Determined Contributions. She remarks that many countries present quantified data on their financial needs to implement their NDCs. But there is much room for improving these assessments and actually matching them with bankable projects:
Veronica Villena of the Peruvian Ministry of Environment explains that Peru’s Climate Change office is working on realising the national commitments made at the Paris climate summit. The formulation of the NDCs will have a bearing on the project portfolios for departments such as forestry, waste management and energy.
The Ministry of Environment is focusing on building its capacity to manage and propose projects to the Green Climate Fund. It is also building a country programme based on the NDCs. It will identify project ideas that could be financed by the Green Climate Fund and other complementary funding sources (public or private). It will clearly outline objectives regarding the specific reduction targets for greenhouse gases.
The aim is to use Peruvian sources of funding to achieve a 20% emissions reduction (a further 10% in greenhouse gas emissions reduction will be dependent on international sources of funding). Regarding the cost of making these reductions using Peruvian national resources: the Ministry estimates that 2% of the cost will be borne by the public sector and the remaining 98% from the private sector. There is a visible demand among energy investors to invest in renewable energy sources.
The Ministry is taking a programmatic approach, she says: “It’s about having a clear objective about what we want to achieve in greenhouse gas emissions reductions and adaptation as well as co-benefits and economic diversification …we are a mining economy and we are trying to diversity our activities through these projects as well”.
Image: Mining – Peru, courtesy Senevi, flickr.com/Villena: Peru will need to diversify its activities away from mining [with ‘greener’ development]