bangladesh governing cc finance in bangladesh final draft (1)

8/2/2019 Bangladesh Governing CC Finance in Bangladesh Final Draft (1)

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Governing

ClimateChangeFinance

inBangladesh

AnAssessmentoftheGovernanceofClimateFinanceandTheParisDeclarationonAidEffectiveness

REVIEW DRAFT

FOR LIMITED CIRCULATION ONLY

A Report to the Capacity Development for Development Effectiveness Facility

Prepared by Clifford Polycarp, World Resources Institute

21 September 11 October 2010

NOTE: The views expressed in this report are those of the author only and do not in any way

represent those of the donors to the CDDE Facility, organisers of the climate change finance and

aid effectiveness initiative, or the World Resources Institute


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CIRCULATION ONLY

TableofContentsAbbreviations and Acronyms ........................................................................................................ 3

Executive Summary............................................................................................................................ 4

1. Introduction.......................................................................... ........................................................ 7

2. Climate change and development in Bangladesh ......................................................... 8

3. Ownership ..................................................................................................................................... 9

3.1 Evolving strategies and action plans ........................................................................... ... 9

3.2 Emerging institutions and funds ................................................................................... 10

3.3 Challenges to enhancing ownership ............................................................................ 11

4. Alignment ........................................................ ........................................................................... 12

4.1 Progress with ODA .............................................................................................................. 12

4.2 Aligning climate finance .................................................................................................... 13

5. Harmonisation .......................................................................................................................... 14

6. Managing for results .............................................................................................................. 14

7. Mutual Accountability ........................................................................................................... 15

8. Conclusions and recommendations ................................................................................ 16

References ...................................... ..................................................................................................... 19

Annex 1: Matrix of questions ...................................................................................................... 20

Annex 2: List of stakeholders interviewed............................................................................ 24


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AbbreviationsandAcronyms

ADB AsianDevelopmentBank

AWGLCA AdhocWorkingGrouponLongtermCooperativeAction

BCCRF BangladeshClimateChangeResilienceFund

BCCSAP BangladeshClimateChangeStrategyandActionPlan

CCTF ClimateChangeTrustFund

COP ConferenceofPartiestotheUNFCCC

GEF GlobalEnvironmentFacility

GHG GreenhouseGas

IMED Implementation,MonitoringandEvaluationDivision

NAPA NationalAdaptationProgrammeofAction

NSAPR

NationalStrategy

for

Accelerated

Poverty

Reduction

ODA OfficialDevelopmentAssistance

UN UnitedNations

UNFCCC UNFrameworkConventiononClimateChange


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Executive

Summary

This report is one of five country studies that have been commissioned by the

CapacityDevelopmentforDevelopmentEffectiveness(CDDE)Facility1supportedby

the Asian Development Bank, Government of Korea, Government of Japan, and

UNDP, as part of a regional dialogue process also supported by the Swedish

International Development Cooperation Agency (SIDA) and the OECD DAC. The

purpose of the initiative is to develop a set of recommendations regarding the

programmingofclimatechangefinanceatthenational level.The initiativeseeksto

strengthenthemanagementofclimatechangefinancebybeneficiariesanddonorsthrough

aconsiderationofAidEffectivenessprinciples. Findingsfromthecountrystudieswillbe

discussedinaworkshoptobeheldinBangkok,October19202010.

Withmore

than

84

81

percent

of

its

population

living

under

$2

aday,

Bangladesh

is

amongthepoorestcountries intheworld. It isalsoamongthemostvulnerableto

the impacts of climate change particularly affecting the poor. Recognizing this,

politicianshaverespondedconstructivelyandconsistently,evengovernmentshave

changed,toputinplacepolicies,strategies,institutionstorespondtothechallenge.

Whilehistoricallythegovernmentand its internationaldevelopmentpartnershave

worked to enhance the countrys resilience to climate variability and shocks, only

recentlyhavetheystartedtodedicatefinancialresourcestoaddressthethreatsof

longtermclimatechange.

ThecountryfirstdevelopeditsNationalAdaptationProgrammeofActionin2005to

identifyadaptationneeds.Buildingonthiseffort, in2009,thegovernmentadopted

theBangladeshClimateChangeStrategyandActionPlantobuildthecapacityand

resilienceofthecountrytomeetthechallengeofclimatechange.Thestrategyhas

six pillars covering social aspects, disaster management, climate proofing

infrastructure, building research capacity, low carbon development and building

governancecapacity.Effortstomainstreamclimatechange intodevelopmentplans

andarethelineministriesarealsonowstartingtotakeshape.

AsclimatefundsstarttoflowinBangladesh,institutionsarestillevolving.Aclimate

changeunithasbeensetupintheMinistryofEnvironmentandForests(MoEF),and

is in the process of being fully staffed. This unit is expected to provide secretarial

functions for thegovernments$100 millionClimate Change Trust Fundas well as

the $110million multidonor Bangladesh Climate Change Resilience Fund (BCCRF).

Thiscoversthebulkoftheroughly$300millionthatisexpectedtobeprogrammed

toaddress

climate

change

in

the

coming

years.

The

unit

is

also

expected

to

MoEF

Secretary also coordinates the climate changecells focal points in the various line

ministries.

Coordinationhasgenerallybeenachallengewithinothersectorsaswell,as isthe

coherence between priorities in the national development and the sectoral plans.

Thisalsohasimplicationsforclimatechangeplanningandprogramming,whichrisks

1 More information on the CDDE Facility can be found atwww.aideffectiveness.org


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being decoupled from core poverty reduction and development agenda posing a

systemic challenge to mainstreaming climate change in the poverty reduction and

developmentagenda.AddressingthisissuewillmayrequiretheMoEF,togetherwith

theMinistryofPlanning,andtheMinistryofFinancetoensurethatclimatefinance

resources are integrated into the mediumterm budgetary framework and the

AnnualDevelopmentPlanningprocesses.

Giventhescaleoftheneedsforcoordinationthereisstillconsiderabledebateover

howtobeststrengthen institutionalcapacities inthisregard.Several ideasarestill

being discussed. There appears to be some convergence around the idea of line

ministriesleadingcoordinationonclimatechangemainstreamingforspecificsectors

due to technical expertise and convening power, but also to enhance ownership,

whiletheMoEFwouldberesponsible foroverallcoordinationandcoherence.This

will

require

the

MoEF

to

empower

the

line

ministries

to

take

the

lead

for

their

respective sectors, and the line ministries to put in place enduring institutional

arrangementstoensurethatleadershipisexercisedeffectively.

Thegovernmentanditsdevelopmentpartnershavemadesomeprogressinaligning

their strategies and resources in support of priorities, and in harmonizing their

efforts. The development of the Joint Cooperation Strategy (JCS), which has

expandedfrom4donorsto18donors,andtheperformanceofthefourdonorsthat

were partof the initial JCS are indicative of concertedefforts to make progress in

thisarea. Intheclimatechangespace,thepoolingofresourcesbymultipledonors

intotheComprehensiveDisasterManagementProgrammeandtheBCCRFarealso

indicatorsofeffortstomakeprogressonalignmentandharmonization.

AsthenewchairoftheclimatechangeandenvironmentWorkingGroupsubgroupin

the Local Consultative Group (LCG) process, the UN agencies UK Department for

InternationalDevelopment (DFID)canworkwith leadclimate financecontributors,

the MoEF and the MoF, to ensure that climate change is addressed more

comprehensively intheLCGprocessto improveharmonisation,andtoensurethat

climate funds are also more closely aligned with poverty reduction plans and the

mediumtermandannualbudgetaryplanningprocesses.

Although donors are making progress in aligning behind the governments stated

priorities,progress intheuseofPublicFinancialManagement (PFM),procurement

andauditingsystemsisslowerwithongoingconcernsoverfiduciaryrisk.Theyfacea

challenge in balancing fiduciary risk controls with more flexible measure to

programme

resources.

These

concerns

have

also

affected

climate

change

programming where the government and the donors, for nearly three years,

debated who would manage the BCCRF. Addressing this issue will require the

strengthening institutions for financial accountability such as the comptroller, the

auditor general and the AntiCorruption Commission to better implement and

enforcerules.

The challenge of weak capacity is also a concern when it comes to monitoring

results.WhiletheImplementation,MonitoringandEvaluationDivision(IMED)ofthe


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Ministry of Planning has the overall responsibility of monitoring publicly funded

projects,theactualresponsibilityofcollectingandcompilingdata,andanalysing it

lies with the line ministries. The capacity to measure and report on climate

outcomesneedstobebuiltintothisexistingarchitecture.However,bothIMEDand

thelineagenciesremainunderstaffedtoperformthisaddedfunction.

TheMoEFneedstoworkwithIMEDandthroughitwiththerelevantmonitoringand

evaluationstaffinthelineministries,tobuildthegovernmentscapacitytomeasure,

reportandverify(MRV)climateoutcomes.Thiscapacitybuildingeffortcanbebuilt

into the technical assistance programmes of the United Nations Development

ProgrammeandtheAsianDevelopmentBanktomainstreamclimatechange inthe

planningandlineministriesrespectively.

Despite

the

enormous

challenges

in

governing

climate

finance

effectively

in

Bangladesh, the government and its development partners have made good

progress in a relatively short period of time. Addressing the coordination and

capacity constraints will go a long way in enhancing the effectiveness of not only

climatefinancebutaidmoregenerally.


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AidEffectiveness(seeAnnex:Listofstakeholdersinterviewed).Thedraftreportwas

alsoreviewedbyrelevantstakeholdersinthecountrybeforefinalization.

ThereportbeginsbysituatingclimatefinanceinBangladeshwithinthedevelopment

contextinthecountryinsection2.Sections37capturethecurrentstatusofclimate

finance in relation to the five aid effectiveness principles, as well as the views of

various stakeholders on challenges and opportunities in ensuring that the climate

finance is governed effectively. Section 8 draws out some of the key issues and

conclusions, and suggests some of the key areas that the government, its

development partners and other stakeholders can focus on to improve the

governanceofclimatefinance.

2. ClimatechangefinancingandaideffectivenessinBangladeshBangladeshisoneofthepoorestcountriesintheworld.Eightyfouronepercentof

itspopulationof144158millionpeopleliveonlessthan$2aday(OECD2008UNDP

2009). It is also one of the most vulnerable countries to climate risks, particularly

tropicalcyclones.Thepoorareparticularlyvulnerableasamajorityofthe50million

poor live in areas that are especially vulnerable to natural disasters, such as river

islandsoralongthecoast(MoEF2009).Whileinternationaldevelopmentassistance

hashistoricallysupported thecountrysefforts toenhance its resilience toclimate

variability and shocks, only more recently are funds being channelled to address

longterm climate change. The issue is also gradually making its way on to the

agendaoftheinstitutionsforaddressingaideffectivenessinthecountry.

2.1ClimatefinanceandODA

Recognizing its particular vulnerability to climate shocks, the Government of

Bangladesh, with support from international development agencies, has invested

over$10billionsinceitsindependencetomakethecountrymoreresilienttonatural

disastersandotherclimateshocks(MoEF2009).Theseinvestmentsareapartofthe

Official Development Assistance (ODA) provided and would not meet the

additionalityandincrementalcostscriteriaoftheUNFCCC.Nonetheless,itdoeshave

significant cobenefits of enhancing the countrys resilience to climate change as

well. Inthecomingyears,thegovernmentand itsdevelopmentpartnerswillneed

scaleuptheirinvestmentstoenhancethecountriesresiliencetoclimateshocksand

alsofocusmoreexplicitlyonthreatfromlongtermclimatechange.

Thegovernment

has

already

stepped

up

its

efforts

over

the

last

five

years

by

putting

inplacepoliciesandstrategies,andbyevenprovidingsubstantialfinancialresources

totacklethechallenge.Thissupportmayhavebeenpartlydrivenbythedamaging

climaticeventsthathaveaffectedthecountry inrecentyears,includingtwosevere

floods, and a massive cyclone. What is more significant is that it has taken these

actionsevenasthegovernmenthaschangedsignallingbroadbasedsupportforthe

climatechangeagenda.


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As a least developed country, Bangladeshs contribution to the climate change

problemthrough itscarbonfootprint isrelativelysmalland is likelytoremainso in

the foreseeable future. Nonetheless, the government recognizes that as it grows

economicallysowillitsfootprint,andinresponse,ithasidentifiedaclimatechange

mitigation pillar in its climate change strategy. However, the emphasis in the

allocationofresourcesisappropriatelyfocusedonclimatechangeadaptationinthe

short tomediumterm.

2.2ODAandaideffectivenessThe responsibility for enhancing the aid effectiveness agenda in the government

restswiththeAidEffectivenessUnit(AEU)intheEconomicRelationsDepartmentof

theMinistryofFinance(MoF).LedbytheMoF,thegovernmentanditsdevelopment

partnershave

created

aplatform

for

dialogue

the

Local

Consultative

Group

and

the

high level Bangladesh Development Forum to review progress on the countrys

poverty reduction strategy and plan joint work. A working groupsubgroup on

climatechangeandtheenvironment ledbytheUNagencies isoneoftheworking

groups bodies responsible for review progress and planningjoint work on climate

change in relation to the poverty agenda. Until very recently, it was led by the

UnitedNationsDevelopmentProgrammeforthelastfouryears,andwillnowbeled

bytheUKDepartmentforInternationalDevelopment.

While the performance of ODA in relation to the aid effectiveness principles has

been mixed, it is somewhat early to assess the consideration of aid effectiveness

principles in relation to climate finance. Some early efforts to assess progress are

beingmadethroughthisstudyandasimilarassessmentthatisbeingundertakenby

theAEU.

3. OwnershipThe Government recognizes that the climate change is likely to exacerbate the

climatic risks that the country faces, thus threatening itsaspiration of becoming a

middle income country by 2020. Even through the government changes that the

countryhasbeenthrough inrecentyears,successivegovernmentshavecontinued

toshowaunifiedpoliticalcommitmenttoaddresstheclimatechangerisksthatthe

countryfaces.Whilethishasresulted inclimatechangebeingaddressed invarious

strategies and action plans, and supported bydomestic and international financial

resources, a coherent effort to coordinating strategies and resources is yet to

emerge.

3.1Evolvingstrategiesandactionplans

In2005,throughaconsultativeprocess,thegovernmentdevelopedanactionplan

foradaptation,theNationalAdaptationProgrammeofAction,toidentifytheurgent

and immediate needs of the country to address the present threats from climate

change. This was supported by the United Nations Development Programme.

Following the2007climate changeconference inBali, thegovernment launcheda

process of developing a comprehensive climate change strategy supervised by a


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Steering Committee chaired by the Special Assistant to the Chief Adviser of the

caretaker government. The outcome of this process was the Bangladesh ClimateChangeStrategyandActionPlan(BCCSAP),whichwasadoptedbythenewlyelectedgovernmentinJuly2009.

TheActionPlanhassixpillars:

Providing food security, social protection and health to the poorest and mostvulnerableeveninthefaceofclimatechangestresses;

Strengthening the countrys disaster management system to deal withincreasinglyfrequentandseverenaturalcalamitiesresultingfromclimatechange

Ensuringthatexisting infrastructure isabletowithstandthe impactsofclimatechange,andnewinfrastructureisbuilttodealwithit;

Buildthecountrysresearchcapacityto improve itsabilitytobetterpredictthescale

and

timing

of

climate

change

impacts

on

different

sectors

and

socio

economicgroups;

Developlowcarbondevelopmentoptionsandimplementthem;and Build the institutional capacityof governmentand nongovernmental actors to

addressclimatechange.

Besides the BCCSAP, the government also has its threeyear poverty reduction

strategy, the National Strategy for Accelerated Poverty Reduction (NSAPR) for FY

200911,whichdrawson theBCCSAP. Thestrategy isstructured around fivemain

themesandfivesupportingstrategies.Tacklingclimatechange,alongwithcaringfor

the environment, is one of the supporting strategies. Since 2006, the government

has been using a strategic budgeting process to align its expenditure with the

nationalpriorities identified in theNSAPR.Recently,new initiativestomainstream

climate change have been launched. These initiatives are supported by the UN

agenciesfortheplanningprocess,andbyADBforthelineministries.

3.2Emerginginstitutionsandfunds

TheinstitutionalarchitectureputinplacetoimplementtheBCCSAPincludes:(i)the

National Environment Committee/Council chaired by the chief adviser/prime

minister to provide strategic guidance and oversight; (ii) a National Steering

CommitteeonClimateChangeforoverallcoordinationandfacilitation,(iii)aClimate

Change Secretariat/Unit at the MoEF for coordination and management, and (iv)

climate change cells in all ministries to plan and implement activities in their

respective ministries. While the higher level committees are in place, the Climate

ChangeUnit

is

still

being

staffed,

while

the

cells

in

the

line

ministries

are

still

in

the

processofbeingestablished.

TheGovernmentestimates that the costof implementing theplanwouldbe$500

millioninthefirsttwoyears,andthetotalcostforthefirst5yearswas likelytobe

on the order of $5 billion (MoEF 2009). In 2008, the government established a

ClimateChangeTrustFund(CCTF)(formerlytheNationalClimateChangeFund)with

an initial capitalization of 3 billion takas ($45 million) from its budget to support

climate change programs to be managed by the MoEF. Earlier in 2010, the


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government ramped up its contribution to this fund up to 7 billion takas ($100

million).LateinSeptember2010,anewlawwaspassedbyParliamentgoverningthe

operationoftheCCTF.

In addition to the CCTF, the government also

concluded a Memorandum of Understanding

with four EU member countries and the

European Commission to set up the Bangladesh

Climate Change Resilience Fund (BCCRF) with at

least $110 million. While this fund will also be

managed by the government with both

governmentanddonoroversight,theWorldBank

willcontinuetoplayarole intheadministration

of

the

funds.

While

the

extent

of

the

World

Banksroleisstilltobeworkedout,itisintended

thatitsinvolvementisphasedoutovertime.

Othersourcesofinternationalclimatefundsavailableincludemultidonorresources

pooled into the Comprehensive Disaster Management Programme (CDMP),

channelled through the UNDP, the Climate Investment Funds Pilot Program on

Climate Resilience (PPCR) channelled through the World Bank, and GEF resources

channelledthrough its implementingagencies, includingtheWorldBankandsome

UNagencies.

3.3Challengestoenhancingownership

Coherence and implementation challenges are having an adverse impact on have

affected progress on enhancing the countrys ownership of its poverty reduction

agenda,andarealsoaffectingitseffortstotackleclimatechange.Forexample,the

NSAPRprioritiesarewerenotalwaysstronglyconnectedwithsectoralprioritiesand

can be improved if required improvements in the institutions and capacity to

coordinate external assistance is improved (OECD 2008). This continues to be a

challengeand isalso likelytoaffecttheBCCSAP,which isyettobefully integrated

into the NSAPR and sectoral strategies. Where efforts have been made to align

resources with poverty reduction priorities, implementation has suffered due to

external factorsandweak implementationcapacity. For example, in2007,only25

percentoftheAnnualDevelopmentPlan(ADP)hadbeencarriedoutduetonatural

disasters

and

revenue

projections

not

keeping

up

with

forecasts,

and

weak

financial

managementcapacities(OECD2008).

The challenge with coherence is also faced in the allocation of climate finance

resources. The CCTF, as currently designed, is decoupled from aligned with the

BCCSAP,andnotdirectlylinkedwiththepovertyreductionprioritiesidentifiedinthe

NSAPR and the ADP process. It is expected that through the participation of the

variousministries in theCCTFTrusteeBoard,coherencewillbeensured.However,

this may not necessarily occur effectively in practice due to the limited

understandingofclimatechangeissuesinthelineministries.

ClimateFundsforBangladesh:Sizeoffundsandscaleofprojects(inmillionUSdollars)Fund Size Scale

CCTF 100 ~3.5

BCCRF 110 ~10

CDMPII 50 ~0.01

PPCR NA NA

GEF5 1218 0.053

AF NA NA


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Intermsofprioritization,theCCTFsupportsprogrammesandactivitiesprioritisedin

the BCCSAP. However, the methodology for prioritisation is not outlined in the

BCCASP and the criteria for funding specific projects have not been made public

evenasnearly$60millionoftheroughly$66millionavailableforfundingprojects

from the CCTF has alreadybeen allocated to 38 projects.4 Officials have indicated

that these projects fall within the scope of the 44 programmes identified in the

BCCSAP.Theypointtothethreestagereviewprocessasindicativeofthedegreeof

scrutinythatprojectshavebeenputthroughbeforeselection.This includesreview

by working groups for each of the five thematic areas in the BCCSAP, review and

recommendationbyatechnicalcommitteelevelchairedbytheMoEFsecretary,and

selection the Trustee Board level also chaired by the MoEF secretary. CSOs are

representedatall levelsandtheMoEF intendstomakeallrelevant informationon

theproject

available

publicly

as

it

builds

capacity

in

the

CC

unit.

Some stakeholders have also highlighted capacity constraints in relation to the

MoEFs role in convening and coordinating the various line ministries, and in

supporting them to take the necessary steps to mainstream climate change into

theirplansandprogrammes.Abalancewillneedtobestruckbetweentheneedfor

acentralcoordinationrole intheMoEFandtheneedforownershiptobenurtured

in other ministries that are central to any effort to address climate change at the

sectorlevel.

4. AlignmentDonors inBangaldesharedoingwelltoaligntheirODAsupportwithstrategiesand

priorities laidoutby the government.However, theydoperceivesomechallenges

with the governments financial management and procurement systems, and are

seeking to strengthen the governments capacity in these areas. These challenges

apply also to the programming of resources for climate change, as has been

witnessedinthecaseoftheBangladeshClimateChangeResilienceFund(BCCRF).

4.1ProgresswithaligningODAandclimatefinance

Inrecentyears,donorshave increased theireffortstoaligntheirsupportwith the

governmentsplansandstrategies.Inone indicatorofalignment,theproportionof

theaiddisbursedin2007thatwasaccuratelyestimatedinthegovernmentsbudget

hadincreasedfrom88percentin2005to92percentin2007(OECD2008).Fourof

the donors thatperformed particularly well against this indicator, the ADB, Japan,

the

United

Kingdom,

and

the

World

Bank,

also

had

ajoint

strategy

to

align

their

assistancewiththegovernmentspovertyreductionstrategy.

AnewBangladeshJointCooperationStrategyfortheperiod20102015wasfinalized

inJune2010andnowincludes18donorsthathavesignedontothestrategy(MoF

2010). While the existence of ajoint strategy, by itself, does not ensure better

4 The Fund Board has decided to retain 34 per cent of the funds in a fixed deposit. See

http://www.thedailystar.net/newDesign/newsdetails.php?nid=153153


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alignment,thewillingnessofseveralotherdonorstocommittoajointstrategyfor

thesecondperiodisindicativeofcombineddonorandgovernmentcommitmentto

makeprogressinthisarea.

Progress in using the countrys public financial management and procurement

systems, however, continues to show mixed results. In 2007, the use of public

financial management systems increased from 53 to 77 per cent and for

procurementsystems from48 to66percent (OECD2008).However, thegainson

PFMwere ledbythreedonors,whichmasksdeclines intheuseofPFMsystemsby

morethanhalfthedonors.Thegainsonprocurementwerelargelyinthehealthand

education sectors driven by legislative progress made in passing the Public

ProcurementAct in2006,thenotificationofthePublicProcurementRules in2008,

andtheimplementationofanewprocurementtrackingandmonitoringsystem.

Evaluating the experience of aligning international climate finance with national

prioritiesissomewhatpremature.Themajorsourcesofclimateinvestmentsthatare

in the works through the BCCRF and the PPCR is yet to start flowing. It is also

expectedthattheClimateChangeUnitintheMoEFwillalsoserveasasecretariatfor

theBCCRF.Perhaps,theonlyfundwithatrackrecordistheComprehensiveDisaster

ManagementProgramme,apooled fundtoreducedisasterrisks, includingclimate

change risks, at the local level.The programme is implementedby theMinistry of

FoodandDisasterManagementand issupportedwithresources froma fundwith

multiple donors pooling in their resources, and is managed by the United Nations

Development Programme. It is closely aligned with government institutions and

strategies,UNDPsrole inmanagingthe fundspoints todonorconcernsaboutthe

financial

management

capacity

of

the

government.

4.2Challengeswithalignment

Althoughprogressisbeingmadeinthisarea,donorscontinuetobeconcernedwith

fiduciary risks, and face a challenge in balancing fiduciary risk controls with more

flexiblemeasurestoprogrammeresources.Further,whilethesystemsandlawsare

inplace, implementationcontinuestoremainweakandtrackinginformationatthe

sectoralandsubnationallevelscontinuetoremainamajorchallenge.

ThechallengesthatafflictthealignmentofODAhavealsohadanadversebearingon

the willingness of contributing countries to align with country systems for

channelling

climate

finance.

This

concern

was

witnessed

in

the

debate

between

the

government and the donors that support the BCCRF regarding who manages the

funds.Currentlythe institutionalarrangementsgivetheBangladeshigovernmenta

leadroleintheprogrammingfunds,whilsttheWorldBankcontinuestoplayarolein

maintaining the fiduciary standards that satisfy the donors. The precise roles and

responsibilities of the government agencies and the World Bank are still being

workedoutinanevolvingoperationsmanual.

Notwithstanding the challenges faced regarding the management of the funds,

countriescontributingclimatefinancetoBangladesharekeentoaligntheirsupport


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withtheBCCSAP.Somedonorsremainconcernedaboutthe lackofprioritization in

existing strategies, and at least one donor referred to it as a reason for their

reluctancetoprovideclimatefinancesupportatthisstage.Attheotherend,some

governmentofficials remainconcerned thatthedonorsactionsaredrivenby their

owngovernmentsstrategiesanddirectivescontrolledbyofficialsinthecapitals.

5. HarmonisationWhile donors have been far better at aligning their resources with government

priorities,progressonharmonizingproceduresandusingcommonarrangementsfor

ODAremainsweak.Thestorywithclimatefinance isyettoplayoutalthoughearly

indicationsrevealincipienteffortsintherightdirection.

Themain

vehicle

for

donor

harmonization

is

the

Local

Consultative

Group

(LCG)

and

highlevelBangladeshDevelopmentForum,whiletheemergingpreferredinstrument

fordoingsoappearstobetheJointCooperationStrategy(JCS)providestheoverall

framework.Donorsandthegovernmenthavebeenmakingeffortstopoolaccounts

particularly in the education and health sectors. They have also made progress in

implementing common procurement procedures, performancebased financing,

common audit and reporting requirements, and conducting joint missions and

analytical work. Despite progress, only 50 per cent of aid was disbursed using

programmebasedapproaches,only24percentofthemissionsconductedjointly,

andonly42percentofanalyticalworkundertakenjointly(OECD2008).Withmany

moredonorsparticipatingintheJCSfor20102015,togetherwiththegovernments

efforttoreformitspublicfinancialmanagementsystems,itishopedthattheuseof

commonarrangementsandsystemswillimprove.

The main institutional mechanism for coordinating strategies and joint work on

climate change is the Working Group LCG subgroup on Climate Change and

Environment in the LCG. This group made important development partner

contributions to national climate change policies and strategies. No other

mechanism exists for the coordination of climate finance per se. Currently, noclimate funds appear to be using budgetary support or other programmebased

approaches either. Some donors have undertakenjoint missions and analysis in

establishingtheBCCRFandalsopooledtheirfundsthroughtheadaptationpillarof

the CDMP and the BCCRF. Recently,joint missions were also undertaken for the

PPCR, while fund from the GEF and Adaptation Fund have their own institutional

arrangements and channelling mechanisms nationally. The responsibility for the

coordinationof

these

funds

rests

with

the

MoEF,

where

the

capacity

to

perform

the

responsibilitiesstillneedstobedeveloped.

6. ManagingforresultsBangladesh has made some progress in developing a resultsbased monitoring

framework for development outcomes, but it continues to be affected by weak

capacities. This is likely to pose a challenge in monitoring climate outcomes, for

whicharesultsbasedframeworkisyettobedeveloped.


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ThecountrymovedfromaratingofDin2006toCin2008onascaleofAtoEwhere

A is indicative of a well developed resultsbased monitoring framework and E the

leastdeveloped(OECD2008).Theresponsibilityformonitoringresultslieswiththe

line ministries although the Implementation, Monitoring and Evaluation Division

(IMED) of the Ministry of Planning, with its mandate to monitor publicly funded

projects,providesthemwithsupportbystructuringthecollection,compilationand

analysisofproject information.Thecoordinationofcollectingdataandthe lackof

technical capacity both at IMED and the line ministries continue to remain

challenges.

The Climate Change Action Plan for 20092018 in the BCCSAP outlines as its

overarching goal: to build the capacity and resilience of the country to meet the

challenge

of

climate

change.

Under

the

six

pillars

identified

in

the

strategy,

the

ActionPlanidentifies28outcomesthatitwouldliketoseeachievedform20092013

(MoEF 2009). While the articulation of these outcomes could serve as a starting

point for developing a resultsbasedmonitoring framework, itneeds to be further

developed to include measurable performance indicators to track progress over

time.Abiggerchallengewouldbetoimplementsucharesultsframework.AsIMED

andthe lineministriesarealreadycapacityconstrained, itwillbedifficultforthem

to meet the added requirement of monitoring climate outcomes unless their

capacitytodoso isalsorampedup.Moreover,theministriesareyettofullymake

thetransitiontomonitoringdevelopmentresultsmoreeffectively.

7. MutualAccountabilityTheBangladeshDevelopmentForum(BDF)providesaspaceforvariousstakeholders

to engage on climate change issues. However, no mechanism for formal mutual

assessment involvingallstakeholdersexists(OECD2008).Civilsocietyorganisations

(CSOs)engageinplanningandresourceallocationdecisionmakingprocesses,andin

implementing projects depending on their varying capacities to do so. The

ParliamenthasbeeninvolvedinconsideringabillontheClimateChangeTrustFund

but information on its role in overseeing Overseas Development Assistance (ODA)

andclimatefinanceissueswasnotavailable.

The BDF provides the platform for various stakeholders to engage with the

government and donors on the development agenda. It includes a Working

Groupsubgroup for environment and climate change issues. However, uneven

capacities

make

it

difficult

for

organisations

with

weaker

capacities

to

participate

effectively,ifatall.SomeofthestrongerCSOsareinvolvedinplanningandresource

allocation decisionmaking processes, in including in the formulation of the

BangladeshClimateChangeStrategyandActionPlan,andtheallocationofresources

from the CCTF. However, some other CSOs feel that they have not been able to

engagemoredeeplyintheseprocesses.

CSO capacities in implementing projects are believed to be somewhat stronger at

thelocallevel.Thisisbecausemanylocalorganizationshavebeendirectlyinvolved


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in implementing development projects for several years. In some cases, the

implementationcapacitiesof localnongovernmentalorganizationsarebelievedto

bestrongerthanthegovernmentcapacityandthetwoneedstobecombinedmore

effectivelytodeliverresults.Withthisstrongdevelopmentcapacityatthelocallevel,

building climate change to existing interventions is unlikely to pose a significant

hurdle.This isbeingborneoutbythedevelopmentofdevelopmentofdisasterrisk

reduction plans taking into account likely climate impacts at the local level in the

ComprehensiveDisasterManagementProgramme.

CSOshaveexpressedadesiretoseemoretransparency indecisionmakingrelated

totheCCTF.Forexample,beyondthenamesoftheprojectsandthetotalamounts

allocatedtothe38projectsapprovedforfundingbytheCCTF,furtherdetailsarenot

availableandthecriteriaforselectingprojectsarealsonotpubliclyavailable.

MuchinformationontheparliamentsroleinoverseeingODAorclimatefinancewas

not available. However, there exists an AllParty Parliamentary Group on Climate

ChangeandtheEnvironmentthathasengagedwithpolicymakersinEurope,theUK

andtheUSonclimatechangeissuesperiodicallyandalsomeetsasawholeattheir

annualgeneralmeetings.

8. ConclusionsandrecommendationsBangladeshs progress towards improving governance of its climate and

development agenda is mixed. Stronger government leadership and greater

development partner coordination is needed. More focus on improving technical

and governance capacities across government agencies, as well within country

systemswillberequired.

Sinceclimateisacrosscuttingissue,multipleagencieshavearoletoplay.However,

forthegovernmenttorespondtothischallengeeffectively, itwillneedastructure

wherethere isstrong leadershipandownershipacrossthegovernment. Giventhe

scale of the needs for coordination there is still considerable debate over how to

best strengthen institutional capacities in this regard. Several ideas are still being

discussed.SomestakeholdershighlightedcapacitygapsinrelationtotheMinistryof

EnvironmentandForests(MoEF)roleinconveningandcoordinatingthevariousline

ministriesandtosupportthemintakingthenecessarystepstomainstreamclimate

change intotheirplansandprogrammes.Moreover,there isbalancethatwillneed

tobestruckbetweentheneedforacentralcoordinationrole intheMoEFandthe

needfor

ownership

to

be

nurtured

in

other

ministries

that

are

central

to

any

effort

toaddressclimatechangeatthesectorlevel.

The capacity challenges for managing the climate change agenda and resources

effectively are concerns that were consistently highlighted by a range of

stakeholders.Thislackofcapacitymanifestsitselfinmanydifferentways:

weak financial management systems pose a particular challenge for improvingalignmentwithcountrysystems,

Comment [CP1]: This is indicative of somelegislative engagement on the issue, howevercontroversial. So, would it be worth qualifying its

role and performance rather than not

acknowledging it at all?


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weak

implementation

and

enforcement

capacity

of

existing

laws

and

regulations

has an impact on both aligning resources and enhancing the use of country

systems,

weak technical capacity to account for and measure progress against climateindicatorsovertimehasimplicationsforprogressonmanagingforresults,and

weak capacity of CSOs to contribute substantively to planning and otherdecisionmakingprocesses.

Asystemicchallengethatspeakstoboththecoordinationandcapacitychallengesis

the risk that climate finance institutions and mechanisms, as is being currently

designed, risks being decoupled from the core poverty reduction and national

development planning and programming. This is also evident in the disconnect

between the Climate Change Trust Fund (CCTF) and the Annual Development

Planning(ADP)

process,

which

make

the

challenge

of

mainstreaming

climate

change

intothedevelopmentagendamorepronouncedinthefuture.

Recommendations:

A.Improvingcoordinationandcoherence The MoEF, in its overall coordination role, can seek to empower the line

ministries by encouraging them to take the lead on coordinating efforts to

mainstreamandaddressclimatechangeinthesectorstheycover.

The line ministries need to ensure that the climate change plans andprogrammesarealignedwithandintegratedintowiththesectoralstrategiesand

programmes.

Thelineministriesalsoneedtofocusondevelopingenduringinstitutionswithinthe

ministries

to

take

the

lead

for

their

respective

sectors

and

ensure

continuity

inaddressingclimatechangeissuesinthesector.Onewayofdoingsoistovest

theresponsibilityforclimatechangemainstreamingnotinanyoneindividualat

theministrybutinacommitteeledbyseniorofficialwithintheministry.

The MoEF and the Ministry of Planning jointly need to ensure that climatechange is effectively mainstreamed into the poverty reduction and national

developmentvisioningandplanningprocesses.

Finally, the MoEF, the Ministry of Planning and the Ministry of Finance (MoF)need to work together to ensure that the resources allocated by the various

climate change funds, including the CCTF, is integrated into mediumterm

budgetaryframeworkandtheAnnualDevelopmentPlanningprocesses.

The UN agenciesUK Department for International Development (DFID), as thenewchair forclimatechangeandenvironment intheLocalConsultativeGroup

(LCG) process, can work with lead climate finance contributors, the MoEF andthe MoF, toensure thatclimatechange isaddressedmore comprehensively in

theLCGprocessandintegratedintodiscussionsacrosssectors.

In its lead LCG role, the UN agencies DFID will also need to work with leadclimate finance contributors to ensure that climate funds are more closely

aligned with poverty reduction plans and the mediumterm and annual

budgetary planning processes, in addition to the Bangladesh Climate Change

StrategyandActionPlan.


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B. Improvingfiduciaryandtechnicalcapacities Both the government and donor agencies need to focus on strengthening

institutions for financial accountability such as the comptroller, the auditor

general and the AntiCorruption Commission to better implement and enforce

rules. While this may be motivated in part by the need to improve the

effectiveness of climate finance, itwillhavespinoffbenefits for improving aid

effectivenessmoregenerally.

The MoEF, with its technical capacity to define climate outcomes and identifymeasurement techniques and issues, needs to work with the Implementation

MonitoringandEvaluationDivisionoftheMoPandthrough itwiththerelevant

monitoringandevaluationstaff inthe lineministries,tobuildthegovernments

capacitytomeasure,reportandverify(MRV)climateoutcomes.

Donors including the United Nations Development Programme and the AsianDevelopment

Bank

could

build

MRV

capacity

building

component

into

their

respectivetechnicalassistanceprogrammestomainstreamclimatechangeinthe

planning and line ministries respectively, and draw on the expertise of the

reporting, data and analysis programme of United Nations Framework

Convention on Climate Change, the Global Environment Facility Evaluation

Office,aswellasrelevantacademicandcivilsocietyorganisations.


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References

MoEF 2009. BangladeshClimateChangeStrategyandActionPlan2009. Ministry

of Environment and Forests (MoEF), Government of the People's Republic of

Bangladesh. Dhaka, Bangladesh.

MoF 2010. BangladeshJointCooperationStrategy2010-2015. Aid Effectiveness

Unit, Economic Relations Department, Ministry of Finance (MoF), Government of

the Peoples Republic of Bangladesh. June. Dhaka, Bangladesh.

OECD 2008. SurveyonMonitoringtheParisDeclaration:MakingAidMore

Effectiveby2010. Organisation for Economic Cooperation and Development

(OECD). Paris.

OECD 2005/2008. TheParis

Declaration

on

Aid

Effectiveness

and

the

Accra

AgendaforAction. Organisation for Economic Cooperation and Development

(OECD). Paris.

UN 1992. UnitedNationsFrameworkConventiononClimateChange. United

Nations (UN). New York.

UNDP 2009. HumanDevelopmentReport2009. United Nations Development

Programme (UNDP). New York.

Formatted: Font: Italic


20/25

Annex1:Matrixofquestions

Policy

Capacity

Incentives

Ownership

Whatisthepoliticalcommitmenttohavinga

climatechangepolicy?

Doesthegovernmenthaveanoverallpolicy

frameworksettingoutitspolicyobjectives

respondingtoclimatechange?

Isclimatechangeintegratedintonational

developmentplans?

Dolineministrieshaveclimatechangepolicies

andplans?

Areclimatechangeactionsidentifiedinnational

andsectoral

budgets?

Whatisthelinkbetweenplanningandfinancing

forclimatechangeatlocal,sectoralandnational

level?

Whodevelopedthestrategies(e.g.sector

ministries,provincialauthorities,legislature,

privatesector,civilsociety,mediaetc)?

Whatistherelationshipbetweeninternational

policyprioritiesandinstitutionalrequirements

andthepoliciesandstructuresinBangladesh

(UNFCCC,NAPA,CDMfocalpointsetc)?

Whoisresponsibleforformally

coordinatingpolicyandplanningwithinthe

governmentforclimatechangeactivities?

Whoisresponsibleforcoordinatingclimate

changefinancing?

Whatistherole,inoperation,oftheNCCC,

MoE,lineministries,MoF,donorco

ordinationagenciesothers?

DotheCCcoordinatingbodieshavethe

appropriateauthoritytoleadand

coordinate

cross

government

policy?

Dotheyhavesufficientcapacitytoidentify

needs,prioritizeplansandallocate

financing?

Whoisresponsibleforreportingand

overseeingtheflowoffunds? Isthere

sufficientcapacity?

Towhatextentwilldifferentstakeholders

beinvolvedinimplementingand

monitoringclimatechangeactions(inside

andoutsidegovernment)?

Whatlevelofawarenessof

climatechangeisthere

amongstthegeneral

citizenry?

Isthereapolitical

commitment?

Whataretheincentivesfor

governmenttoleadthe

agenda?

Dodifferentpartsof

government

(for

instance

MoE,NCCCandline

ministries)havedifferent

incentivesrelatingto

climatechangeandits

financing?

Wha

cha

coo

gov

Are

inte

fund

own


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21Sep11Oct2010 REVIEW DRAFT FOR LIMITED CIRCULATION ONLY

Policy Capacity Incentives

Harmonization

Isthere,

either

formally

or

operationally,

a

specificcommitmentfromexternalpartnersto

coordinatefundingforCC?

Isthissetoutin(forinstance)aHeadofMissions

statement/MoU?

Isasinglecomprehensiveprogrammeand

budgetframeworkusedforallsourcesoffinance

forclimatechange?

Dodonors

meet

together

regularly

to

co

co

ordinatetheiractivities?

Isthereanupdatedregisteroffundedand

plannedactivities?

Isthereaformalprocessfordonorco

ordinationandharmonisationofdonor

proceduresforanyofthefollowingsystems

aspartofthegovernancearrangements:(i)

reporting,(ii)budgeting,(iii)financial

managementand(iv)procurement?

DodonorshavetechnicalcapacityonCCin

country,ordotheymanagetheirCC

financingfrom

regional

or

international

HQs?

Howdodonorscaptureadditionality?

Whatare

the

incentives

fromdonorsforandagainst

harmonization?

Aretheincentivesdifferent

atlocaland

regional/internationallevel?

Whatarethegovernment

incentivesfor/against

harmonizationofdonors?

Aretheseincentivesthe

sameforall

government/donor

stakeholders?

Whaharo

fina

Doi

offi

harm

Results

Whatresultsframeworkhasbeendevelopedfor

measuringtheimpactofexternallyprovided

climatechangefinance?

Whatistherelationshiptootherresults

frameworksfornationalclimatechange

programmingandoveralldevelopmentpolicy?

Isthereasingleresponsibleagencyora

networksofagenciescapableofmonitoring

resultsofCCactivitiesfundedbyexternal

donors?

Howwillreportingofresultstakeplace?

Whataretheimplications

fornationalresults

frameworksresultingfrom

internationalstandardsfor

measureable,reportable

andverifiableactions(MRV)

onclimatechange?

Wha

capt

resu


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21Sep11Oct2010 REVIEW DRAFT FOR LIMITED CIRCULATION ONLY

Mutual

Accountability

Whatlevelofpredictabilityistheretothepublic

sourcesofclimatechangefinance?

Are there annual or longer 35 year

commitments?

What are the donor commitments to

predictabilityoffinancing?

Towhatextentareprovidersofclimate

changefinanceaccountabletocitizensin

recipientcountries?

Arecivilsociety,themediaandotherother

bodiesoutsidegovernmentcapableof

monitoringccfunding?

Towhatextentdo

governancearrangements

allowfor

reporting

to

parliamentandallowaccess

toinformationforcitizens

withaninterestin

monitoringprogresson

climatechange?

Wh

dev

accofina


24/25

Annex2:

List

of

stakeholders

interviewed

A. Governmentagencies1.MihirKantiMajumder,Secretary,MinistryofEnvironmentandForests1.2. AbuM.KamalUddin,ClimateChangeAdaptationSpecialist,Ministry

ofFoodandDisasterManagement2.3. FakrulAshsan,Chief,GeneralEconomicsDivision,MinistryofPlanning

B. Civilsocietyorganizations3.4. Prof.ZahurulKarim,Chairman,CentreforAgriresearchand

SustainableEnvironment&EntrepreneurshipDevelopment5.Md.KhalidHossain,CampaignCoordinator,Oxfam4.6. QuamrulIslamChowdhury

C. Donor/Internationalagencies5.7. AsianDevelopmentBank

a)ArifMohammedFaisal,ProjectImplementationOfficer(Environment)b)JiangfengZhang,SeniorCountryEconomistc)MeriatySubroto,SeniorCountrySpecialist

6.8. DepartmentforInternationalDevelopmenta) JimMcAlpine,SeniorProgrammeManagerb)JoanneManda,ClimateChangeandEnvironmentAdviser

7.9. JohanWllert,FirstSecretary,UrbanEnvironment/ClimateChange,EmbassyofSweden

8.10. JapanInternationalCooperationAgencya)TatsuhikoSunouchi,Representativeb)ZafarIqbal,SeniorProgramManager

9.11. KhawajaM.Minnatullah,SeniorSpecialist,Environment&Water,TheWorldBank

10.12. UnitedNationsDevelopmentProgrammea)M.AminulIslam,AssistantCountryDirector,ClimateChange,

Environment&

Disaster

Management

b)MohammedSifayetUllah,ProgrammeAnalyst,DisasterManagementc)K.Morshed,AssistantCountryDirector,PolicySupportand

Communications

D. WorkingGrouponAidEffectiveness11.13. Representative,EmbassyofDenmark12.14. Representative,JapanInternationalCooperationAgency

Formatted: Space After: 6 pt

Formatted: Font: Not Italic


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13.15. DileepKumarDas,JointSecretary,EconomicRelationsDivision,MinistryofFinance

14.16. MonowarAhmed,AidEffectivenessUnit,EconomicRelationsDivision,MinistryofFinance

15.17. SiddiqurRahmanChoudhury,TeamLeader,EvaluationoftheParisDeclarationPhaseII,AidEffectivenessUnit,MinistryofFinance

16.18. DoraNsuwaCudjoe,EnvironmentalSpecialist,SouthAsiaRegion,TheWorldBank

bangladesh governing cc finance in bangladesh final draft (1)

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