HANOI, June 28, 2016 – Day 1 of the Asia LEDS Forum 2016: Mobilizing Finance for Priority Actions concluded yesterday after an opening panel on existing policies and initiatives for mobilizing finance, parallel sessions on the scale of financing required and suitable financing sources, and country roundtable discussions on policy and regulatory instruments for financing Nationally Determined Contributions (NDCs).
In the day’s keynote address, Dr. Stephen Hammer of the World Bank echoed the Forum’s objectives in describing his organization’s outlook on climate action.
“We’re trying to move from the ‘conversation’ on [the] Paris [Agreement] to a full-blown focus on implementation, [including] collaboration with groups such as the Asia LEDS Partnership and the LEDS GP,” he said.
In the opening panel, it was noted that while policy frameworks on climate change are generally in place in Asian countries, implementation infrastructures and engagement with the private and other non-government sectors for mobilizing finance remain to be a work in progress.
The panel observed that the ‘discourse’ on climate finance was mostly limited to the public sector, with the associated roles and responsibilities often regarded to be solely of government. Further, a shift was suggested from focusing solely on ‘supply-side’ questions of implementing NDCs –i.e. how to obtain finance, technology, and other needs – to considering a ‘bottom-up’ approach based on sectoral demands, and how these demands “are linked to the lives and livelihoods of the poor and marginalized.” Addressing the supply-side issues, therefore, should be guided by sectoral plans that feature specificity and have come up from sub-national or city levels.
The opening panel was followed by a ceremony marking the formal transition of management of the Asia LEDS Partnership Secretariat from the USAID LEAD Program, implemented by ICF International, to ICLEI – Local Governments for Sustainability.
In the parallel sessions, it was noted, among others, that developing climate change policies is ‘not enough’ without translation into concrete allocations in national and sub-national budgets. The key is the development of an ‘integrated climate change financial framework’ – one that serves as a roadmap to identify, plan, track, and report on climate change expenditures.
Further, more than external factors, weaknesses in the ‘enabling environment’ fostered by governments serve as barriers to finance. This enabling environment includes, among others, the government regulatory framework, supported by effective government institutions; a country-specific climate action toolkit, national and sectoral in scope; and technical capacity for Measurement, Reporting, and Verification (MRV) of climate actions. Tracking of public and private climate expenditure, while difficult, was likewise pointed out as imperative to ensure transparency and effective implementation of NDCs.
Mobilizing domestic private finance is especially crucial because of its dominant share within a country, and the strong preference for domestic investment by investors. It requires an integrated approach that includes governance and a host of other factors, as well as the consideration of the entire risk/return value chain and where investors stand with respect to the level of risk.