The Royal Government of Bhutan took part in the Asia – Pacific Climate Change Finance and Development Effectiveness Dialogue, outlining its institutional arrangements to manage effectively climate finance. Bhutan was represented by Karma Tshiteem, Secretary of the Gross National Happiness Commission, who presented the work undertaken so far through the Joint Support Programme and the LoCAL Facility.
Climate change is now recognized as a key development challenge requiring a low emission and climate resilient development response. Given its cross-cutting nature, a national response to climate change implies an integration of the full range of public and private investments. For governments, this will require efficient coordination across key ministries including climate, environment, finance, planning and local development, as well as those engaged in climate-sensitive sectors of development such as agriculture, energy, disaster management and infrastructure. In addition, national stakeholders such as parliaments, civil society, private sector and academia need to be fully involved as partners to address climate change in all its complexity.
In an effort to establish and strengthen country leadership in managing climate finance effectively the Capacity Development for Development Effectiveness Facility convened an Asia Pacific Dialogue in Bangkok during the 12th and 13th of September. The event saw the participation of representatives of the ministries of Environment, Planning, Finance and Local Development of the countries in the Asia-Pacific region, development partners, members of civil society and donors.
The Secretary of the Gross National Happiness Commission emphasized the innovations proposed by the LoCAL facility, which introduces strong performance oriented reporting mechanism (with predefined indicators and corresponding baselines) to stimulate effectiveness and account for the climate change adaptation expenditures required by local governments to “climate-proof” development programmes.
Therefore the LoCAL facility not only allows local governments to respond to the increasing impact of climate change, but also “…promote[s] and stimulate[s] Public Financial Management (PFM) and Public Expenditure Management Systems (PEM)”. Linking climate finance to national planning and budgeting processes benefits developing countries in two ways: it firstly allows for large volumes of finance to flow quickly and effectively – for example through budget support instruments. Secondly, linking external finance with national public financial management systems can also provide further support for on-going reforms to strengthen transparency and accountability. The importance of this aspect is not to be underestimated since, as the Secretary stated during the event “…it is crucial to get the process right, as well as the final result”.
The LoCAL facility is a mechanism for local financing of climate resilience within existing government systems. It is being developed by the UN Capital Development fund together with the UNDP and UNEP.