Mainstreaming climate change adaptation into planning and budgeting processes is supported by the UNDP. Mainstreaming involves integrally reflecting climate risks and adaptation options in decision-making at various policy levels and stages. The core elements of the mainstreaming process include integrating adaptation strategies into policies, costing priority adaptation actions, establishing institutional arrangements, integrating adaptation actions into planning and budgeting systems, and establishing monitoring and evaluation systems. Effective climate budgeting can help implement adaptation plans by translating policy into action through national and local budgets. Challenges to mainstreaming include limited understanding of climate impacts, lack of incentives, and weak institutional coordination.

1. Mainstreaming CC Adaptation
into Planning & Budgeting
Supported By
Glenn Hodes
Climate Policy & Finance Specialist
UNDP Bangkok Regional Hub
In cooperation with

2. Understanding “mainstreaming”
• CC risks and adaptation options are integrally reflected
in decision-making and planning processes….
…By leveraging entry points at various levels, stages of policy
and planning, and programmatic interventions.
…Thus, neither ad hoc nor stand-alone.

3. Core Elements of Mainstreaming Process
CCA strategies
integrally
reflected in
policies and
strategies
Finance Gap &
Priority CCA
Actions Costed
Establishing
coherent
institutional
arrangements
Planning and
budgeting
systems
integrate CCA
actions
Clear results &
target indicators
identified and
effective M&E
systems in
place
“Resource
mobilization”
strategies
(funding,
knowledge,
technologies)
Mainstreaming actions implemented in practice

4. More effective climate budgeting:
• Budgets are how CC funds are often utilized
and are the most important documents to
translate policy into action
• National (and local) budgets and finances are
critical for the implementation of adaptation
plans and objectives, including NAPs
• Better management strongly correlates to
more equitable spending

5. Climate change & financial risk still a relatively new area for government policy
Limited understanding of how sectoral plans and programs would be affected by CC.
Lack of incentives or political will by functional/line ministries to implement national
CC actions.
Limited capacity of functional/line ministries to undertake CBA & investment appraisal
of programs
Insufficient time and resources to devote expertise to managing climate finance in
budgets
Few guidelines or incentivizes to integrate CCA into resource mobilization strategies.
Weak internal systems and institutional co-ordination
Potentially insufficient information regarding climate spending and financial flows
Challenges

6. Institutional Implications
CC policies and plans are usually prepared by Ministries of Environment.
1. Be aligned and feed into national development strategy processes and vice versa: Involve
also the Ministries of Planning.
2. Inform and be integrated into sector policies and vice versa. Involve all sector ministries
(e.g. agriculture, public works, water, health, forestry, fisheries etc.).
3. Inform and feed into other cross-cutting issues and vice versa. Involve ministries such as
women and children affairs, disaster risk management, social protection agencies etc.
4. Inform and be integrated into sub-national policies and vice versa. Involve Ministries of
Home Affairs/Local Government and Sub-national Governments (provinces, districts etc.)
5. Be costed and appraised and integrated into a country’s medium and long term fiscal and
expenditure framework. Involve Ministries of Planning, Ministry of Environment , Line
Ministries and Ministry of Finance.
6. Translated into concrete allocations in national and sub-national allocations. Involve
Ministries of Finance, Ministries of Planning, Ministry of Environment, Ministries of Home
Affaires, Sub-national governments and line ministries.
7. Monitored and Evaluated: Involve Ministries of Finance, Ministries of Home Affaires, Sub-
national governments and line ministries.
8. Audited and Overseen: Auditor General, Parliament and CSOs.

7. Climate Public Expenditure and
Institutional Reviews (CPEIRs)
• Diagnostic tool
• Scope can be national level, provincial, or
local level
• Platform for multi-sector dialogue and cross
government co-ordination on CC strategy
• Tracking Climate Finance expenditures
from a country perspective
• Translating climate change issues into
language for Ministries of Finance
• What gets monitored gets managed

8. CPEIR - II
• A policy and institutional assessment of government’s ability to
coordinate and translate climate objectives into the budget
• Review expenditure related to climate change and assesses extent to
which budgets are guided by policy and institutional responsibilities.
• Typology used to identify climate change relevant expenditures
• Analysis of trends in climate budget allocations / expenditures
• An illustration of trends in external funds flows;
• Recommendations on institutional reforms for mainstreaming to
improve effectiveness and impact of finance.

9. CPEIRs – what have we learned?
• CPEIRs help to set a baseline against which future
expenditures can be measured and monitored
• Economics of adaptation need to be much better
understood (costing & prioritizing)
• Capacity to deliver needs to be strengthened, and quality
of expenditures need to be improved and monitored
• International finance should build on domestic finance
• Promote use of national systems for planning, execution,
monitoring and reporting.

10. The Budget Cycle
• Budget cycle elements:
– Which elements of the budget
cycle need to incorporate CC
information?
– What about sequencing?
– How and by whom?
• Where to start?
• CC budget integration feedback
to policy and planning cycles
Climate Change
Strategic
budgeting
Annual
budget
formulation
Execution
(incl. GFMIS,
procurement)
reporting
and
monitoring
Budget
evaluation

11.  National Development Strategy: Philippines NDS 2011-16.
 Annual Sector Plans: US Department of Health, Department of Agriculture.
 MTFF/MTEF: Bangladesh CCF, Proposed Cambodia CCFF.
 Budget or Stand alone Circular: MoF provide guidelines on CC integration in Budget
Submissions. Philippines: common CC typology and guidelines for tagging CC spending
in budget. Able to track and monitor national response based on tagged data for 2015.
 Budget Submission: MoAC Thailand in collaboration with BoB, NESDB and ONEP.
 Technical Budget Hearings: In Philippines on CC to help prioritize CCE and inform
NGAs planning for 2016 budget.
 Budget Speech. Pakistan, Nepal
 Annual Budget Policy Statements.
 Budget Books Annex: Nepal
 Standalone but legally required CC Budget Reports (US, France…).
Tangible Entry Points for
Climate Change Alignment
11

12. • An integrated and strategic framework for
governments to better mobilize, manage and
target climate finance – recognizing a broad
range of financing modalities.
• It supports decision-makers to ensure that
national systems and climate finance
architectures deliver CF in more equitable,
effective, and efficient ways.
• Outlines a reforms road map to strengthen fiscal
planning and budgetary decisions, as well as
transparency and accountability mechanisms.
What is a CC Financial Framework (CCFF) ?

13. Download NOW
at
www.CFADE.org

14. • Integrate CC into existing techniques
• If no organised system for appraisal, then
use CC as an opportunity to encourage
Applying Appraisal Tools to Public Finance

15. Menu of Appraisal Tools & Methods
Tool/Method General thrust
Cost Effectiveness Analysis (CEA) Measures cost in relation to an isolated outcome. Defines
least-cost way to get result. More suitable to CC mitigation.
Cost Benefit Analysis (CBA) Overall economic rationale, weighing both costs and benefit
streams and effects on all outcomes.
Climate Change Benefit Analysis (CCBA) Help identify and appraise public investment projects having
positive climate change benefits.
Financial Analysis “Bankability” in financial viability terms, i.e., investment
return, debt-serviceability, pay-back time
General Equilibrium Analysis
(CGE, IAM …)
Macro-economic effects
Multi Criteria Analysis (MCA) Supports decision-making with broad view of impacts, often
participatory application
Real Options Analysis CBA with assessment of future flexibility
Robust Decision Making Least likely to fail

16. 1. Climate-responsive budgeting as strategy to achieve
better policy choices, institutional co-ordination and a
strengthened NAP process.
2. “Bottom up” focus, starting at functional/line ministry
level, starting with agriculture while simultaneously
engaging Bureau of Budget, ONEP.
3. Appropriate screening guidelines and investment
appraisal methods to quantify climate risks and benefits
developed that can be applied by sectors.
4. Capacity building through pilot projects and programs:
walk key stakeholder through entry points as part of
budget cycle.
Case Study : Mainstreaming CCA in Budgeting in Thailand

17. 1. Piloting and Capacity
Building on Climate
Appraisal/CBA Tools
- Preliminary analysis on five
adaptation projects under MoAC
- Preliminary analysis on two
mitigation projects under MoE
- In depth analysis of two
projects under RID and LDD
2. Developing a Common
Framework for Appraising
Projects related to Climate
change
- Guidelines on Climate Change
Benefits Analysis (CCBA)
developed based on experiences
from the piloting and capacity
building works as well as
Preliminary analysis on the
institutional arrangement and
coordinating mechanisms

18. Resources
18

19. Group discussion
• What are the main gaps in linking adaptation priorities to
public finance and establishing baselines for CC spend?
• What are the key-challenges with:
– Prioritizing programmes for budget allocations
– Costing measures and developing realistic financing plans
– Assuring the quality of expenditures
– Monitoring and reporting
• How much do the most vulnerable people really benefit?

20. Thanks for your attention