1) There is a need for greater quantification in reporting on finance for the Rio Conventions due to new quantified goals under the UNFCCC, CBD, and other agreements. 2) Two main approaches for greater quantification are identifying financial components within activities or using "coefficient" estimates to scale Rio marker data, but both raise feasibility issues. 3) Most members currently use Rio markers and coefficients to report financing, though approaches vary, and harmonization could improve comparability.

1. Considerations for drawing on Rio markers
for reporting quantitatively to the Rio
Conventions
Stephanie Ockenden, DAC Secretariat
Fourth Experts’ Meeting of the ENVIRONET-WP-STAT Task Team
21 May 2015, Paris.

2. Considerations for greater
quantification in reporting....
1. Needs for greater quantification
2. Rationales and feasibility considerations
3. Current practices and the use of coefficients
4. Pragmatic ways forward

3. Needs for greater quantification:
• Rio markers originally developed to track
mainstreaming:
– Descriptive - identify activities targeting climate/biodiversity
as a principal or significant objective
– Allow for an approximate quantification of financial flows for;
• Climate-related development finance
• Biodiversity-related development finance
• Desertification-related development finance
• New data needs arising from new quantified
goals:
– UNFCCC Climate finance goal; USD 100bn p.a. by 2020
– CBD Biodiversity finance target; doubling of finance by 2015
– Each have own reporting requirements under the
conventions

4. Two main methodological approaches for
greater quantification:
• Component based approaches:
– Identify USD component within total expenditure
– Activity level
• “Coefficient” based estimation approaches:
– Rio marker data scaled down by % share
– Applied at different levels
Aggregate
Sector
Activity
Group

5. Example: CBD

6. Considerations for greater
quantification in reporting....
1. Needs for greater quantification
2. Rationales and feasibility considerations
3. Current practices and the use of coefficients
4. Pragmatic ways forward

7. Rationales and feasibility considerations...
Insights from survey of DAC members – based on a small sample of Rio
marked activities, asking questions on reporting approaches, rational and
component level reporting
Different rationales for greater quantification:
• Account for the exact financial element within an activity
related to the Rio conventions
• Refine the estimate of climate/biodiversity importance
based on objectives and results
• Combination e.g. to estimate a conservative financial value,
whilst at the same time recognising the value of
mainstreaming and results.

8. Rationales and feasibility considerations...
Feasibility considerations:
• For the survey - not possible for members (with few exceptions) to
identify climate/biodiversity financial components
• For the majority - not logical to decompose activities into components
– i) Disaggregation would be "artificial" - components cannot be disaggregated as
the whole project is required to deliver the climate/biodiversity objectives.
– ii) it is not possible to clearly decompose the measures as not all the
projects/programmes are clearly formulated with a component structure,
– iii) activities can serve more than one policy objective and it would be very
difficult to separate them.
• Some highlighted that information is not readily available, or that
insufficient information is available, in particular based on current
financial management systems and practices.
– Component approach - highly resource intensive, especially to do uniformly
– A few members noted that for larger projects, information could be available, and
that going forward greater decomposition of projects could be foreseen.

9. Granularity
of activities
in 2013
Bilateral portfolio:
• 6771 climate-related
bilateral activities in 2013
• 90% activities < USD 5m
• Top 10% range USD 5m to
1.36bn
• Top 5% range from
USD11m
• Top 2% range from USD
27m
Multilateral Portfolio:
• 1248 climate-related MDB
activities in 2013 (recorded
in DAC statistics*)
• 15% activities < USD 5m
* Excludes small number of EIB activities that could
not be reconciled and where total commitment data
not available

10. Considerations for greater
quantification in reporting....
1. Needs for greater quantification
2. Rationales and feasibility considerations
3. Current practices and the use of coefficients
4. Pragmatic ways forward

11. Current approaches for more quantified
reporting
• Majority of members draw on Rio markers to provide
the basis for their reporting to the UNFCCC, CBD on
bilateral ODA.
• Many members applying “coefficients” to adjust the
share of finance reported
– Typically at aggregate level
• A few members have developed more sophisticated
approaches, or have their own national approaches:
– France (AFD): component approach for mitigation
– Germany: component approach for biodiversity
– UK, US, own national approaches
Source: Summary of members' responses to OECD DAC Survey, April 2014 and May 2015

12. Climate Finance Coefficients
• Most report 100% principal
• Varied treatment of significant, ranging from 0-100%

13. Biodiversity Finance Coefficients
• Most report 100% principal
• Varied treatment of significant, ranging from 0-100%

14. Comparability and the need for harmonisation
are concerns from members
• Different approaches and coefficients may relate to the nature of
different member portfolios, and how the marker is applied.
– Sector
– Type of activity – i.e. capacity-building vs infrastructure
– Activity Size
• Limited evidence available to inform coefficients
• Task Team - exploring and developing the evidence base
• Some guidance/detail of more refined coefficient approaches derived
by sector specialists/expert judgement:
– Belgium - extensive list of “weighting factors” for 9 sectors, 49 subsectors
– Switzerland – apply coefficients on a case by case basis, with guidance for key
activity types
– France (Biodiversity) – identify coefficients for 5 sectors/activity types.
Compiling information on different approaches,
Helping to increase transparency and facilitate sharing of approaches

15. Transferable evidence from component
based approaches to inform coefficients?
MDB Components Portfolio:
• Average climate finance / total commitment = 77%
• Over half of MDBs activities count 100%,
• Average falls to 42% if exclude these
• Wide Range 0.1-99%, including within sectors...
Average shares across top 5 sectors:
Average
(All)
Average (ex.
100%)
Range (ex.
100%)
Energy generation and supply 88% 55% 6-97%
Transport and storage 67% 32% 0.1-98%
Agriculture, Forestry and Fishing 76% 31% 1-98%
General environmental protection 86% 69% 1-99%
Banking, financial & business
services 86% 53% 4-94%

16. Next Steps
Short term: Improve transparency
• Encourage members to communicate approaches
• OECD DAC Secretariat to present summary detail of
approaches as an Annex in our publications >
members to confirm details!
• OECD DAC Secretariat to update and publish
stocktake
Medium term: Improve understanding and
comparability of approaches
• Further sharing of approaches and evidence
• Thresholds for large activities:
– Above USD 25m or USD100m?
Long term: What do members envisage?

17. OECD DAC CRS Rio marker statistics and analysis
www.oecd.org/dac/stats/rioconventions.htm
OECD Environment and Development Homepage
www.oecd.org/dac/environment-development
Joint ENVIRONET-WP-STAT Task Team:
Stephanie.Ockenden@OECD.org and Valerie.Gaveau@OECD.org