FEATURE: Climate finance – Monitoring and utilisation in Pakistan’s context
Fareeha Irfan Ovais, Country Programme Manager, Indonesia highlights the proceedings of a roundtable discussion where participants elaborate the functions, outcomes and challenges of implementing monitoring reporting and verification (MRV) systems in Pakistan.
It is widely accepted that preparing for the adverse impacts of global climate change and preventing more dangerous levels of greenhouse gas emissions will require financial resources on an unprecedented scale. In an effort to meet these needs, Parties to the 2009 United Nations Framework Convention on Climate Change (UNFCCC) Copenhagen climate summit committed to the goal of jointly mobilising $100 billion a year by 2020 for climate change mitigation and adaptation activities in developing countries. This pledge was reiterated in the UNFCCC Paris Conference of Parties in 2015.
According to the Climate Policy Initiative, global climate finance flows have been steadily increasing and reached at least $391 billion in 2014 due to an increase in public finance and a record private investment in renewable energy technologies. In this context, the question of how to measure, report and verify (MRV) these increasing climate finance flows has gained greater importance in the last few years.
In Pakistan, there is limited understanding about climate finance and the requirements, methodology and need for MRV of climate flows. In view of this, the Climate Finance Readiness Focus area at LEAD Pakistan organised a Roundtable Discussion on ‘Monitoring Reporting and Verification (MRV) of Climate Finance: The Role of Non-Governmental Organisations (NGOs) and Civil Society’ on 27th of October, 2016. The objective of the event was to inform NGOs and civil society Organisations (CSOs) on their potential role in monitoring the flows and usage of international climate finance in Pakistan; to provide a platform for organisations to work together to ensure transparent use of climate investment; as well as discuss recommendations for effective use of climate spending in the country in line with developing properties. Representatives from international and local NGOs and CSOs attended the roundtable.
Presenting a brief overview of the global financial landscape, CDKN Regional Research Manager Hammad Raza outlined the basics of climate finance to participants of the Roundtable. He explained that with increasing flows of climate finance, developing and implementing appropriate MRV systems is no longer a choice, but a necessity.
Monitoring or measurement starts with defining ‘climate finance’: what kinds of projects and activities are covered, and what portion of a project with multiple objectives targets climate objectives. Reporting relates to the ways in which funding providers make their financial information and data available to third parties. Verification is more subjective and covers evaluation activities such as ensuring that the reported data is correct, how funds and financial resources were used and how effective they have been for emission reduction or resilience building.
To date, the majority of the climate investment has focused on low carbon development and the emphasis of MRV systems has been on tracking the effectiveness of mitigation efforts and initiatives. However, this is slowly changing. Ali Tauqeer Sheikh, Chief Executive Officer of LEAD Pakistan and Regional Director of CDKN, stressed the need of developing methodologies to track climate finance spending for building climate resilience and adaptation. This is particularly important for developing countries like Pakistan that are low emitters of greenhouse gases, but highly vulnerable to climate change impacts and need to access large volumes of adaptation finance to spearhead their development. Mr. Ahmad Ali Shah from Social Aid gave the example of REDD+ projects in the country and how NGOs can become involved to monitor this effort to reduce deforestation and control greenhouse gas emissions.
The participants were briefed about the functions, outcomes and challenges of implementing MRV systems in developing countries. Implementing these is important to build trust, accountability and transparency between the donor and recipient of climate finance, as well as verify that the stated objectives of combatting climate change are being met. While methodologies are available to measure and report on international climate financing, tracking climate investments from domestic public budgets and private sector remains challenging. Mr. Shahid Nawaz from Save the Children reiterated the importance of expanding the monitoring net to capture ongoing climate change projects supported by the private sector.
Hina Lotia, Director Programs at LEAD Pakistan, outlined the role civil society can play in MRV of climate finance at the national and sub-national level. This is particularly important for verification i.e. to assess how the funds have contributed towards climate resilience, reducing poverty and meeting national development priorities. In Pakistan, the methodologies for verification are still in infancy and need to be refined a great deal. In this context, civil society can support the government in developing and implementing these methodologies at the project and programme levels. Ghazala Raza from United Nations Industrial Development Organization (UNIDO) explained that civil society organisations can carry out third party monitoring of climate change-related initiatives provided they have the will to undertake this role.
However, the participants of the Roundtable unanimously agreed that NGOs and CSOs in Pakistan currently lack the knowledge, skills and capability to play an effective role in monitoring climate finance spending in the country. Moreover, they reiterated that there is currently no platform in the country that allows for MRV-related information sharing between various stakeholders. They recommended that informative workshops and capacity building events should be organised on a regular basis and information about MRV should be shared in the media to raise awareness among the general public.