The CRGE Highlights newsletter communicates lessons learned from implementing Ethiopia’s Climate Resilient and Green Economy (CRGE) strategy. Volume 1 No 7 of the newsletter details progress made on implementing the CRGE strategy as a mechanism for climate finance and Ethiopia’s approach to Nationally Determined Contributions (NDCs)

Implementing the CRGE – Establishing a mechanism for climate finance delivery

There is overwhelming evidence that climate is changing globally and projections suggest that the rate of change will continue to increase. Warming has occurred across much of Ethiopia and both the frequency and intensity of droughts have increased, impacting the livelihoods of people. At the same time, increases in flooding have also intensified the vulnerability of households. The low level of economic development, combined with a heavy dependence on rain-fed agriculture and high population growth, make Ethiopia particularly vulnerable to the adverse impacts of climate change.

The recognition of this vulnerability and the associated challenges has spurred policy debate in recent years and Ethiopia has developed its green economy ambitions, which encompasses building greater resilience to climate change, under a single policy framework - Climate Resilient Green Economy (CRGE) Strategy. In this context, four areas of engagement have also been selected to fast track the implementation of the green economy element of the strategy (namely hydropower development, rural cooking technologies, the livestock value chain, and forestry development), taking into account their prospect of immediate economic growth and large carbon abatement potential. The adaptation (or climate resilience) part of the strategy is currently being enhanced in order to secure the livelihoods of those most vulnerable to climate change. To this end, the fast tracking of the agricultural sector climate resilience strategy demonstrates that adaptation is being given due attention.

The successive agreements from the Conference of Parties (COP) in Copenhagen 2009, Cancun 2010, and Durban 2011 mandate developed countries to provide new and additional climate finance in the amount of $30 billion between 2010 and 2012 and $100 billion per annum by 2020 to developing countries to finance their response to climate change. Further, the Green Climate Fund which will be the vehicle through which the $100 billion per annum will begin to flow by 2020, allows developing countries to have direct access to funds if these countries have a national mechanism that meets international fiduciary standards.

Against this backdrop, Ethiopia established an innovative funding mechanism to support the implementation of the priorities set out in the CRGE strategy- the CRGE Facility. Designed as a single, national funding mechanism, this Facility is intended to make the administration of funds easier for the government to drive and manage international climate funds, donor funds and domestic funds in a coordinated manner. The Facility was established taking into account the experience of other countries and in line with the international climate change negotiation that wanted to see a visible and traceable funding mechanism for the additional finance that was being allocated and used for climate change interventions and results.

Taking into account the existing institutional structure in the context of climate change, Ethiopia’s CRGE Facility is being administered through inter-ministerial collaboration between the Ministry of Finance and Economic Development (MoFED) and the Ministry of Environment and Forest (MEF), which are responsible for the financial and technical aspects of the Facility, respectively. This key institutional arrangement underpins the effective implementation of the programmes set out in the CRGE strategy, recognizing that climate change is an economy-wide issue that needs such inter-ministerial governance.

For more information on the operationalization of the CRGE strategy see the newsletter.

The Intended Nationally Determined Contributions (iNDCs) Development Process – A global process under UNFCCC that will reaffirm Ethiopia’s CRGE ambitions

COP 17 in Durban saw the establishment of the Ad Hoc Working Group on the Durban Platform for Enhanced Action (ADP), which is a subsidiary body that was established by decision 1/CP.17 in December 2011. The mandate of the ADP is to develop a protocol, another legal instrument or an agreed outcome with legal force under the UNFCCC that is applicable to all Parties and which is to be completed no later than 2015 in order for it to be adopted at the twenty-first session of the Conference of the Parties (COP 21) in Paris and for it to come into effect and be implemented from 2020.

Governments decided to either begin or to intensify domestic preparations for their nationally determined contributions towards the agreement so that they are ready well before December 2015 and ideally by the first quarter in 2015. This is an important part of the timeline of the negotiations.

In this context, Ethiopia’s domestic efforts in addressing climate and development through the implementation of the CRGE Strategy were applauded by participants and viewed as an example that other African countries could learn from. It was also evident that much of the input required for an NDC could be drawn from the existing work undertaken for Ethiopia’s CRGE Strategy.

CRGE Highlights Volume 1 No: CRGE-Highlights May 2014

For more information on CRGE Highlights, contact Ato Belete Geda, Director for the Awareness and Education Programme in the EPA or visit the CDKN-funded project page.