Supporting
Countries to
Integrate Climate
Change into
Planning and
Budgeting
A UNDP Approach
Prepared by
Ashley Palmer, Paul Steele, Thomas Beloe,
Yusuke Taishi, Rohini Kohli, Pradeep
Kurukulasuriya, Kevork Baboyan, Joanne Manda
and Sujala Pant
Draft for Consultation: October 2014
Supporting Countries to Integrate Climate Change into Planning and Budgeting
All around the world it is plain that climate change is happening and that human activities are the principal cause. Last
month the Intergovernmental Panel on Climate Change confirmed that the effects of climate change are widespread, costly
and consequential - from the tropics to the poles, from small islands to large continents, and from the poorest countries
to the wealthiest. The world's top scientists are clear. Climate change is affecting agriculture, water resources, human
health, and ecosystems on land and in the oceans. It poses sweeping risks for economic stability and the security of nations.
-UN Secretary General Ban Ki Moon, The Guardian, 6 May 2014
I.
Introduction
Addressing Climate Change as a Core Human Development Issue
The discourse on climate change has evolved considerably over the years, from an issue that was seen to
be principally an environmental challenge to one with far wider repercussions, even raising the spectre of
a reverse of human development gains made in the past. “[L]ooking to the future, the danger is that
[climate change] will stall and then reverse progress built-up over generations not just in cutting extreme
poverty, but in health, nutrition, education and other areas”.1
The connection between climate change and human development has come into ever clearer focus and
is increasingly well documented. The 2012 Asia-Pacific Human Development Report, One Planet to Share:
Sustaining Human Progress in a Changing Climate, was dedicated to this topic. It examined the many ways
in which climate change threatens people’s fundamental choices and opportunities, from risks to
livelihoods and economic assets, to the heightened potential for conflicts over environmental resources,
to the health risks posed by climate-sensitive diseases. The report also highlighted the nexus between
climate change and inequality, noting “[w]hile climate change will affect everybody to some degree, the
poor are particularly vulnerable, with the fewest options for adapting or managing risk.”2
Responding to Climate Change Requires a Whole-of-Government Approach
Addressing climate change requires an integrated approach which reflects the multi-dimensional nature
of its impact on human development. At the level of an individual country, an effective climate change
response involves horizontal integration across economic, social, and environmental sectors and policy
domains; policy coherence in the face of competing priorities; and vertical integration between
governance levels.3 Looking at the institutional architecture of a government, it means that a ‘whole-ofgovernment’ approach is needed. This can take many forms. National/sub-national climate change
policies may be translated into the planning and budgeting process, and in turn inform the activities of
sectors through line ministries and technical agencies. Or, climate change response strategies and
activities which prove effective can inform national policy frameworks. Other scenarios abound as well.
In practice, a whole-of-government approach requires significant involvement of Ministries of Planning
and Finance in working with Ministries of Environment as well as with key line ministries such as
agriculture, energy, health, and transport. As a cross-cutting development issue, climate change cannot
be effectively addressed as an environmental challenge alone, but instead must be reflected in overall
planning and budgeting systems as an integral part of a country’s efforts to achieve its national
development goals.
1
Fighting Climate Change: Human Solidarity in a Divided World, Human Development Report, UNDP, 2007/2008.
Asia-Pacific HDR. One Planet to Share: Sustaining Human Progress in a Changing Climate, UNDP, 2012.
3
Regional, National, and Local Level Governance for Sustainable Development, Rio 2012 Issue Brief, 2011.
2
1
Supporting Countries to Integrate Climate Change into Planning and Budgeting
The Context of Climate Change Finance in Developing Countries
Climate change affects all countries, yet developing countries are among the most severely impacted.
While there is often a great deal of attention to the financial resources being provided by the international
community, developing countries are committing sizable amounts of their own domestic financial
resources towards implementing their national response to climate change. In Indonesia, for example,
66% of public climate finance in 2011 originated from national sources.4
There are a range of challenges to managing climate change finance and developing countries are
iteratively identifying approaches to address them. For domestic climate change finance from a
Government’s own budget, this includes strategies for defining what actually constitutes climate change
allocations and expenditures and integrating it – vertically and horizontally; across sectors and with
involvement of multiple actors- into existing planning and budgeting systems. For international climate
change finance, developing countries are identifying ways to align these resources with national
development priorities and climate change policies.
There are clear incentives to improve on current approaches and strengthen existing systems. When it
comes to domestic climate change finance, integration with existing planning and budgeting systems
allows a country to make informed decisions to align the use
Blending Finance in Mali
of resources with national climate change policy, and to avoid
In response to the fast changing
duplication and wastage. It also makes possible evidencearchitecture on climate finance and
based reporting on the steps taken by the country, including
realization of the scale of resources
the amount of domestic ‘own-source’ resources committed,
required to address climate change
to address climate change. As increasingly large sums of
priorities, the Government of Mali has
money become available from international sources,
embarked on operationalizing a strategy
developing countries continue to improve their “readiness”
aimed at blending finance from multiple
for climate finance5 by strengthening institutions and systems
sources and channels. The Government is
for managing these resources to align with both national
currently seeking to combine, sequence
and blend public sources of finance, from
policies and international climate change obligations.
domestic and international sources
(including from vertical and bilateral
channels), with private sources of finance
including resources leveraged from the
private sector as well as foundations. The
governing instrument for the blending of
finance is an integrated climate change
strategy that defines clear outcomes and
which is updated regularly through a
consultative and participatory process.
Against this backdrop, an effective approach has been to
prioritize supporting countries to strengthen existing
national and sub-national planning and budgeting systems
for managing domestic resources, which in turn creates the
right conditions for international climate change finance to
flow. This emphasis on strengthening systems for managing
domestic resources responds to overall resource trends. A
recent report found that in the Asia Pacific region, domestic
resources- both public and private- have grown rapidly since
the 1990’s, with Government spending having increased from 17% to 26% of GDP between 1995 and
2012.6
4
The Landscape of Public Climate Finance in Indonesia, Climate Policy Initiative, July 2014.
A 2012 UNDP report defined climate finance readiness as the capacity of countries to plan for, access, deliver, and
monitor and report on climate finance, both international and domestic, in ways that are catalytic and fully
integrated with national development priorities and achievement of the MDGs.
6
UNDP and Australian Government Department of Foreign Affairs, Asia-Pacific Effective Development Cooperation
Report 2014, p. 14.
5
2
Supporting Countries to Integrate Climate Change into Planning and Budgeting
Supporting Developing Countries to Integrate Climate Change into Planning and Budgeting
Against this backdrop, there is increasing focus on supporting developing countries to anchor their
national climate change response in a strategic framework which integrates climate change with existing
planning and budgeting systems. The contours of such a framework will differ depending on the country
context, but work to date has pointed to some common features of a strategic framework for managing
climate change finance, suggesting such a framework should:
 Bring public sources of climate change finance (international/domestic) into the national planning
and budgeting system, to be delivered through country systems, and align private sources of
climate change finance with the overall fiscal policy framework;
 Employ a whole-of-government approach, as well as more broadly involving all relevant actors,
partners, and stakeholders;
 Focus on planning climate change actions in the medium and longer term;
 Reflect a common and agreed definition, within the country, of what constitutes climate change
allocations and expenditures, allowing for consistent and accurate monitoring, tracking, and
reporting on climate change investments;
 Promote accountability in the use of climate change finance both to national stakeholders,
particularly the most vulnerable, as well as externally to international donors and partners.
Cambodia’s Climate Change Financing Framework (CCFF) is an approach to managing climate finance across
Government. Building on the national climate change strategy, the CCFF includes an assessment of climate
financing scenarios, and a review of modalities for channeling this finance at the national and local level. At the
heart of the CCFF is an innovative benefits approach to defining and analyzing climate finance which looks at
whether the benefits of a policy/action are affected by climate change. This approach is innovative because:
 A focus on the incremental difference in benefits with or without climate change for a policy or investment
moves away from trying to quantify incremental costs. This approach asks the question, would the cost
benefit ratio be higher or lower if climate change were to happen as predicted and if so by how much? This
gives a numeric value to high, low or no regrets investments.
 A focus on benefits brings in the long term perspective. This allows for a more nuanced policy dialogue
about prioritizing investments which may not be considered viable in the short-term.
 A focus on benefits moves country dialogue towards results based programming and performance based
budgeting. The focus is on the result or benefits of the investment, making it possible to consider whether
national plans are building resilience.
 A focus on benefits provides incentives to Government to show how they are prioritizing their investments
in a language that has political traction.
For Cambodia the process of developing the CCFF has been as valuable as the end product itself. There is broad
ownership of the process and strong stakeholder commitment to implement the CCFF.
Strengthening existing systems towards such a strategic framework can pose a range of challenges, which
differ depending on the country context. This paper will consider some of the approaches being taken,
focusing in particular on key aspects of an ‘ideal’ strategic framework for planning and budgeting, and
how such a framework can be adapted and fit-to-purpose by developing countries, in support of their
own stated climate change policies and national development goals.
3
Supporting Countries to Integrate Climate Change into Planning and Budgeting
Super Impact: All people, including vulnerable groups, are able to participate in, contribute to, and benefit
from development, as barriers posed by climate change risk are minimized or eliminated
Governments able to
integrate climate change
finance: on treasury, on
budget, part of longer term
planning cycle
Governments able to accurately
track, monitor, and report on use
of climate change funds, and use
this information for decisionmaking
Decision-making about climate
change takes into account the
needs of the poor and vulnerable
Medium term climateresponsive fiscal framework
guides decision making and
management of climate
change resources
Medium term climate resilient
planning framework (with
sector plans, attention to
decentralization structure)
Institutional/governance
framework for inclusive,
accountable, whole-ofgovernment approach to
managing climate risks
Problem
Barriers
Interventions
Outcomes
Impact: Developing countries have in place the institutions, systems and processes, at both national and subnational levels, to effectively manage the risks to human development posed by climate change
Outputs
Impacts
Integrating Climate Change into Planning and Budgeting: A Theory of Change
Stocktaking of
processes and entry
points, including
through diagnostics
such as CPEIR, NAP
stocktaking
Support to strengthen
budgeting and planning
process for integrating
climate change into
decision making and
development processes,
at national and subnational levels
Facilitate sharing of
experiences on
climate responsive
budgeting and
planning between
countries (S-S and
TrC)
Lack of whole of government
approach; institutional and
sectoral siloes; lack of
coordination; institutions not
fit for purpose
Insufficient focus on planning
for climate change actions in
the medium and longer term
horizon
Capacity and skills gaps on
climate resilient planning and
budgeting approaches
Insufficient knowledge
sharing between countries on
approaches to climate
resilient planning and
budgeting
Capacity building on
specific technical
skills and
competencies for
planning, budgeting
Inadequate voice and accountability
mechanisms for ensuring climate
change actions reach beneficiaries,
and for overall accountable
economic decision making
Much climate change planning,
budgeting, delivery
(international and domestic)
managed outside of country
systems
Sub-Problem: Decisions over scarce resources fail to adequately and effectively take climate
change into account
Development Problem: Climate change negatively impacts on development gains, and constrains the choices
and ability of people, particularly the poor and vulnerable, to participate in and benefit from development
4
Supporting Countries to Integrate Climate Change into Planning and Budgeting
II.
A Strategic Framework to Integrate Climate Change into Planning and Budgeting
National Systems for Planning and Budgeting: An Overview
While there may be some variations between individual countries, by and large national planning and
budgeting cycles share some common features. The following diagram provides an overview of the
process, and illustrates opportunities within that cycle for integrating climate risk. The next section of this
paper will consider, in turn, elements of the planning process and the budgeting process as distinct.
However, it is important to emphasize that the planning and budgeting processes must be interlinked,
mutually reinforcing, and continuous, as portrayed here:
Given the complexity of integrating climate change into the planning and budgeting process, including the
need for involvement of numerous institutions and stakeholders, many countries have found it helpful to
undertake a focused diagnostic exercise. A Climate Public Expenditure and Institutional Review (CPEIR)7,
for example, systematically considers the relationship between climate change policies, institutional
mechanisms, and the technical processes of managing climate change finance within the national
budgeting system. Some countries have also looked closely at their approach to climate resilient
development planning, including by engaging in a stocktaking exercise to inform their National Adaptation
Plan (NAP)8 process. The CPEIRs and a number of other products identified by the UNFCCC guidelines for
NAP formulation (e.g. stocktaking, risk assessments, economics of adaptation and investment appraisal,
participatory dialogue, etc) offer an opportunity to identify the most promising entry points within existing
national systems to strengthen the climate change response.
The next section of this paper will look in more detail at the planning and budgeting cycles, and how they
can be used in support of an overall national strategic framework for responding to climate change.
7
8
For more information on CPEIRs, see: http://www.climatefinance-developmenteffectiveness.org/
For more information on NAPs, see: http://unfccc.int/nap/
5
Supporting Countries to Integrate Climate Change into Planning and Budgeting
Integrating Climate Change In the Planning Process9
Most countries have some form of planning process to
Indonesia and Nepal have both taken
determine national political and economic priorities. This
increasing steps to integrate climate
may take the form of a political manifesto of a party prior to
change into their periodic planning
election or a government action plan after an election has
processes. In Indonesia, the Planning
taken place. At a more technical level, this may take the form
Ministry BAPPENAS reviewed the impacts
of a national development plan, which may be a five-year
of climate on the latest 5 year plan, while
in Nepal the National Planning
plan or over an even longer period. The challenge with these
Commission included linkages in their
plans is the extent to which they are really translated into
three year Plan. These efforts are also
public expenditures through the budget process and are
now starting to be replicated at the
linked to annual, sectoral and subnational economic decisionsubnational level, with Nepal pioneering
making through sector strategies and subnational planning.
the use of the Local Adaptation Planning
Process (LAPA).
To address the latter issue, some national planning processes
involve elaborate bottom-up planning which brings together
sectoral and subnational priorities. A stylistic budget process is set out below demonstrating the links
between medium term and annual planning; between national development planning and decentralized
and sector planning; and most crucially between planning and budgeting or financing. The red flags
indicate entry points for mainstreaming – in this case for the National Adaptation Plan (NAP) process.
Source: GIZ adapted from Uandela (2010)10
9
This section has been adapted from Mainstreaming the Environment and Climate Change to Reduce Poverty: A
Handbook for Strengthening Planning and Budgeting Processes, PEI, [draft] 2014.
10 Uandela, André (2010), Planning and budgeting mechanisms in the Mozambique water sector: improving the
decision making process, presented at the IRC (International Water and Sanitation Center) Symposium 2010 Pumps,
Pipes and Promises, WASHCost project, Mozambique.
6
Supporting Countries to Integrate Climate Change into Planning and Budgeting
Planning as an Institutional Process
Planning as a government function was at its height with the planned economies of socialist countries,
but many developing countries still have Planning Ministries or Commissions which may be responsible
for large capital expenditures, such as infrastructure through the Public Investment Program (PIP). In most
OECD countries where the private sector plays a large role, the planning function of government has been
reduced or merged with the Ministry of Finance or other parts of government. In countries where separate
Planning and Finance Ministries continue, this may be a source of institutional tension and in some cases
Planning Ministries have lost power as Ministries of Finance become stronger. For those who favor a
separate Planning Ministry, the argument is that the Ministry of Finance may stress a short term focus on
managing macro-economic indicators, without the benefit of a longer term view on economic and political
trends that a Planning Ministry can provide. This longer term perspective of a Planning Ministry can also
mean that Planning Ministries are more likely to take into account the longer term threats created by
climate change.
Integrating Climate into National Planning Documents
There has been a good deal of work and much progress on reflecting climate issues in national planning
documents. For example, the Planning Commission in Bangladesh produced a 5th Five Year Plan with a
much more substantive section on environment and climate change than earlier national plans. In the
Cook Islands, climate change has been mainstreamed into Te Kaveinga Nui, the National Sustainable
Development Plan (2011-2015). In Cambodia, the forthcoming National Plan recognizes the significance
of climate change and is expected to includes climate indicators, in addition to being linked to the 10 Year
Climate Change Strategic Plan.
Integrating Climate into National Planning Processes
Integrating climate change into national planning processes is a much more institutionally sustainable
approach than simply inserting text into a planning document. It requires that a particular set of
institutions and relevant sectors continue to address climate change issues over the course of a multi-year
planning cycle. In addition, it allows for planning processes to be dynamic and flexible in order to respond
to new data and risks over time and to address uncertainty within climate models. In Bhutan, the Gross
National Happiness Commission (i.e. Planning Commission) chairs a “Mainstreaming Reference Group”,
which has been recognized by a Prime Ministerial Decree, to support mainstreaming into the Five Year
Plan and related policies and programs. In some countries, the Ministry of Environment can play this role
in integrating climate change into national planning – but this requires an able and willing Ministry of
Environment to be pro-active in championing such integration.
Integrating Climate Change In the Budgeting Process11
The budget is the key political and economic decision of a government. It includes both the expenditure
decisions of a government i.e. what to spend on, but also the fiscal policy of a government i.e. what to tax
and levy charges on. These public expenditure and fiscal policy decisions also incentivize private sector
investments. Public expenditures can impact on environment and climate issues in terms of the “positive”
expenditures on environment and climate priorities such as sanitation, watershed and forestry
management and climate proofing infrastructure, and “negative” expenditures such as government
funded fossil fuel power plants or state led land clearance. “Positive” fiscal policy can include incentives
11
This section has been adapted from Mainstreaming the Environment and Climate Change to Reduce Poverty: A
Handbook for Strengthening Planning and Budgeting Processes, PEI, [draft] 2014.
7
Supporting Countries to Integrate Climate Change into Planning and Budgeting
for clean technology or private forestry plantations, while “negative” fiscal policies can include tax breaks
for private fossil fuel investments or for private investors to clear forests. The budget is a complex political
and technical exercise, which
The Government of Indonesia has embarked on a pilot process of integrating
therefore provides multiple
climate change adaptation actions into the planning and budgeting process
entry points for integrating
at the sub-national level in the province of Nusa Tenggara Timor. The CPEIR
climate
change
and vulnerability assessment are used to shed light on the existing public
considerations. The key steps
spending on climate-sensitive sectors and gaps that exist in achieving the
in the budget process are
National Climate Change Action Plan (RAN-API). It is expected that provincial
budget
planning
and
and district level planners will use the findings from these assessments to
make informed decisions about the priorities of climate change adaptation
formulation,
budget
investments among other competing demand for public investments.
execution
and
implementation, and budget
monitoring and accountability. The diagram below shows how climate change in particular can be
integrated into these different steps.
8
Supporting Countries to Integrate Climate Change into Planning and Budgeting
Climate Responsive Medium Term Fiscal Framework
The implementation of a
Bangladesh’s Ministry of Finance has
term fiscal framework
started to take an increasing role in a climate
development
of
the
responsive budget. First the government
Strategy (MTBS) which
reviewed its expenditure on climate change
promotes a climate resilient
which was found to be $1 billion per year,
climate compatible, low
with three quarters from domestic
The following are features
resources. This motivated interest by the
Ministry of Finance who then set about
such a framework.
climate responsive medium
should be part of the
Medium
Term
Budget
mitigates climate change;
economy; and incentivizes
carbon economic growth.
and key process steps in
developing a Climate Fiscal Framework
which was approved by the Minister of
Finance. The Ministry of Finance has also
now chosen to lead on international finance,
with the Economic Relations Department
identified as the National Designated
Authority for the Green Climate Fund.
Revenues:
On the public revenues side,
the Ministry of Finance
should develop a climate
compatible fiscal policy, as
well as a domestic and
international
resource
mobilization strategy, to
feed into the medium term
fiscal framework in line with
its overall fiscal discipline
objectives (budget neutral, etc.). This will need to be done with technical support from the National
Revenue Commission, the Ministry of Environment and concerned line ministries (for example, Ministry
of Energy, Ministry of Public Transportation). Key steps in this process are outlined as follows:
1. Measure the current share of domestic revenues allocated to climate relevant actions using the CPEIR
expenditure analysis tool, which looks at how that share is expected to evolve according to the
medium term macroeconomic framework and/or any existing medium term climate finance targets
which have been established by the government;
2. Review and reform pricing, taxation and subsidy policies, including to private sector, to be climate
compatible, and quantify their net impact on the budget;
3. Estimate the amount of funding expected from dedicated global funds (for example: SPCR, GEF, AF,
LDCF, GCF and UN-REDD) and private finance and include in the medium term revenue framework;
4. Estimate the expected level of funding from international (ODA) sources by consulting donors about
their future intentions and integrate this estimate into the medium term revenue framework, and;
5. Review methodological options for linking domestic sources of funds to their application in climate
response. It should not necessarily be assumed that sums raised from fiscally based ‘green actions’
will be hypothecated for climate response, but rather a range of technical (e.g. a national fund) and
policy linkages between the sources and applications of funds should be considered. This could mean
a virtual fund comprising international sources and domestic sources; ring-fencing of sums raised from
taxation measures; budget support; or a policy-based linkage. A full range of climate finance
management options should be identified with attention to the pros and cons specific to the context.
Once these steps are completed, a medium term revenue framework can be developed which identifies
which revenue streams are linked to a climate response. This provides the basis for deriving the climate
resource ceilings for each line ministry, based on climate risk assessments and past expenditure trends in
a given sector.
Expenditures:
On the public expenditure side, line ministries need to develop climate responsive medium term
expenditure frameworks, within the set ceiling, to be submitted to the [central agencies] for approval and
9
Supporting Countries to Integrate Climate Change into Planning and Budgeting
integration into the medium term fiscal framework. Planning and budgeting for expenditures involves the
following steps:
1. Line ministries identify programs and expenditures which have a climate dimension (mitigation,
adaptation, technology transfer and capacity building), by using the CPEIR expenditure analysis but
also, importantly, by drawing on institutional knowledge and expertise;
2. The climate relevance of programs/expenditures is then determined, ideally by using a benefits
approach, or alternatively through expert judgment based on expenditure description with the
provision of climate finance and public finance expertise;
3. Line ministries then identify which climate relevant programs/expenditures need (i) up-scaling or (ii)
modification in their design (such as climate proofing) in order to optimize the benefits from the
investment. The line ministry should also decide whether there is a need for new climate dedicated
programs/expenditures;
4. Programs should be prioritized, net economic, environmental and social costs and benefits
understood, and phased, taking into account cross-sectoral linkages and complementarity of actions
using various planning and appraisal tools, including:
 Project appraisal including cost-benefit analysis, benefit-cost ratios;
 Marginal abatement costs and benefits for mitigation/adaptation effectiveness;
 The level of uncertainty or risk inherent in the action. One of the main sources of risk will be
uncertainty about the severity and geographical as well as temporal extent of climate change and
what this implies for the performance of the climate actions considered;
 Scoring and multi-criteria analysis looking at environment, economic growth, poverty, gender and
disaster co-benefits, and;
 Participatory approaches.
5. Finally, under the leadership of central agencies, line ministries should define key performance
indicators and, where possible, provide evidence of baseline values and targets for monitoring the
ministry’s climate change strategic plan. These should be based on the selection of indicators already
identified for possible inclusion in the National Development Plan.
Note on Planning Tools: It is important to mention that the planning tools listed above can be very useful
for guiding decision making. However, there are other critical factors which should be taken into account
in the decision making process. These include the opinions of senior decision makers within the ministry,
as well as the enabling political environment. It is, therefore, fundamental to complement a technical
planning exercise with an institutional and political economy analysis to consider other factors which
affect the ability of public sector institutions to implement the actions.
Accountability in the Use of Climate Change Finance
The accountable use of climate change finance is crucial – both in terms of expenditures being spent as
and where agreed, as well as with regard to ensuring that resources reach the communities most in need.
For this, the role of Parliaments is most relevant; similarly, anti-corruption commissions (or equivalent)
also have a role to ensure that finance is being used as planned, and that leakage and rent-seeking is
minimized. The role of non-state actors is also equally significant. Civil society organizations have an
important role in ensuring the accountable and transparent use of climate change resources, as well as in
working with communities to encourage their involvement in holding government to account.
10
Supporting Countries to Integrate Climate Change into Planning and Budgeting
Conclusion: UNDP’s Approach to Supporting Countries to Integrate Climate Change into
Planning and Budgeting
III.
The theory of change which informs UNDP’s approach involves a range of interventions for integrating
climate change within planning and budgeting functions in government, shifting from a purely
environment driven agenda. The nature and sequence of interventions depends upon the country
context. Understanding the roles of different actors, enabling environment, legal framework,
accountability mechanisms, and other governance factors which impact on the planning, budgeting and
delivery of climate change finance is critical.
UNDP’s approach builds on overall development effectiveness principles and on its track record of working
with leadership within countries to contextualize development support and align with national priorities.
The approach emphasizes the human development mandate by strengthening not just the technical
processes of planning and budgeting, but also focusing attention on the gender, poverty, vulnerability,
and inclusiveness aspects of climate change policy and implementation systems. In practice, much of
UNDP’s support to developing countries in this area has focused on strengthening national [country]
systems for, first and foremost, managing domestic climate change finance. By extension, this approach
contributes to creating overall conditions and enabling environments within countries which can also
effectively absorb and manage international sources of climate change finance. This approach is also
broadly in line with UNDP’s mandate and primary accountability to partner countries, with only secondary
accountability to international climate change institutions/funds.
Against this backdrop, UNDP has supported the integration of climate change into development processes
through a number of interventions and programs, including:

The Governance of Climate Change Finance Program focuses on promoting a whole-ofgovernment approach in responding to climate change, using the budget process as an entry
point. The program supports the Ministry of Finance to promote climate compatible budgeting
across government, and focuses on ensuring that climate change finance benefits the poor and
vulnerable. Engagement with civil society actors, as well as other state institutions such as
Parliament is also an important aspect of the program. The program aims to: i) support the
integration of climate change into budget formulation at national and sub-national levels; ii)
strengthen institutions to track and report on climate change expenditures as part of the budget
process at national and sub-national levels; iii) share knowledge effectively within and across
countries as well as with key international policy processes related to climate change finance.
More information: http://www.climatefinance-developmenteffectiveness.org/

The National Adaptation Plan Global Support Program (NAP-GSP) is assisting LDCs to identify
technical, institutional and financial needs to integrate climate change adaptation into ongoing
medium and long-term national planning and budgeting. The program helps strengthen
institutional and technical capacities in all LDCs for iterative development of comprehensive NAPs
that are country-driven, and based on existing national development priorities, strategies, and
processes. The program objectives focus on: i) developing operational and flexible NAP papers
and implementing training to advance medium- to long-term adaptation planning processes in
the context of LDC national development strategies; ii) making tools and approaches available to
LDCs to support key steps in the NAP process; and iii) exchanging lessons learned and knowledge
through South-South and North-South Cooperation.
More information: http://www.undp-alm.org/projects/naps-ldcs
11
Supporting Countries to Integrate Climate Change into Planning and Budgeting

The Economics of Climate Change Adaptation Capacity Building Program supports countries to
advance their country-driven mainstreaming efforts and climate adaptation programs by
providing training on the economics of adaptation. The skills developed under this program are
intended to help practitioners select and design efficient adaptation projects in their country. This
can help countries to more strongly interface with international climate adaptation funding
sources, as well as to plan and budget adaptation projects to be financed domestically. The costbenefit analysis training also helps practitioners include climate change in traditional
development projects, thereby mainstreaming climate change risk management practices into
domestic programs and national economic development planning.
More information: http://www.undp-alm.org/projects/ecca-asia
These initiatives have supported countries to address climate change from different entry points, and
collectively are contributing to making climate an increasingly more central part of the human
development agenda. The added-value of UNDP working through a whole-of-government approach is that
it strengthens planning and budgeting systems to manage climate finance by building on on-going
activities in areas related to governance, environment, disaster risk reduction, and poverty. UNDP’s
approach also stresses the need to work with both international and domestic finance to leverage all
existing and potential resources.
12