Improving our game on climate finance

Author: Kashmala Kakakhel

Islamabad has been scorching the past few days, and I am not even talking about the political temperature. Highs of 36 Celsius in mid-April are rare, but Islamabad isn’t the only place where the sun seems to be shining brighter than ever. Globally, each of the last 11 months has set a record for the hottest monthly temperatures ever recorded. This is an unprecedented streak, dating back to 1880 when temperature measurements and recording began. Perhaps it is opportune then that it was last week (April 22) that Pakistan, along with 175 other countries formally signed the Paris Climate Change Agreement, which was agreed to last December with great fanfare.

The agreement aspires to commit the world to the aim of capping global temperature rise from climate change to a maximum of two Celsius (and aspirationally to under 1.5 Celsius). If we fail to cap it at this point, the impact of climate change will significantly transform the world as we know it today. To make this real, consider the latest research that says that glacial melt at the north and south pole may drastically be under-predicted, and could actually be happening fast enough to cause an average sea level rise of 10 feet in as little as 50 years. 10 feet! Imagine what would happen to a number of coastal cities and low-lying areas globally. New York, Miami, much of Holland, much of Bangladesh. The Maldives may not exist. Imagine what it might do to Karachi, and then remember that Karachi is home to one in ten Pakistanis. That is, at least 20 million today, and somewhere between 35 to 50 million by 2050.

Unless almost all of science is wrong, climate change is real, and one of the issues of the 21st century, and implementing the Paris Agreement in letter and spirit is critical if a global solution has to be found. For Pakistan specifically, there are two sets of implications. First, there is a responsibility, as there is for any other country, to design and implement a plan to reduce its carbon emissions, which basically result in increasing global temperatures. This implies a set of decisions such as changing our energy mix over time, for example by using lesser oil and coal, and investing more in the development of cleaner energy sources such as solar, wind or hydro-power. However, given that as an underdeveloped economy, Pakistan is not as yet a large emitter of carbon emissions, there is room to stagger the transition. Second, there is also an opportunity. As one of the 10 most susceptible countries globally to climate change, Pakistan needs all the assistance it can get, and in this the Paris Agreement is positioned to assist.

Part of the agreement is to use the global Green Climate Fund (GCF). This fund by 2020 aims to disburse $100 billion a year to help developing countries combat and prepare for some of the irreversible effects of climate change. In our case, there is glacial melt, resulting in increased flooding in the short term and significant water stress in the longer term. The way we manage our water resources may be an existential question for Pakistan. The GCF can be a valuable source of funding for some of the mitigation and adaptation measures that need to be put in place. The question is, does Pakistan realise this, and how well prepared is it to access this funding?

Surprisingly, there is some good news. The focus that the creation of the ministry of climate change has led to is resulting in some action. The ministry has set up a GCF board at the national level including all relevant line ministries and provincial representatives, with the aim of driving and coordinating national activities to access the global GCF fund. Earlier this month, on April 17, this board held its second meeting. Pakistan’s current status against the criteria of accessing the GCF support was discussed. During the same meeting, a number of projects were also presented by the provinces, international agencies and local NGOs to consider internally before putting forward to the fund. This is progress for Pakistan. However, there are at least four areas where Pakistan can and should significantly up its game.

First, funds from the GCF can only be accessed by specific organisations that are accredited to the fund as ‘entities’ after fulfiling specific criteria. Entities can be multilateral (UNDP, World Bank) or national organisations. There is no limit on the number of entities that can be accredited for any country. The accreditation process, however, is long and resource-intensive, which national organisations find hard to commit to. Of the total 33 entities accredited to date, only none are country-specific, none from Pakistan for now. This needs to change fast. Countries such as Ethiopia, India, Peru and Rwanda have all moved ahead on this front. In Pakistan, a number of private sector entities are applying for accreditation, but government should also think of the federal and provincial entities that ought to be accredited. To take a cue from some of the other countries, Ethiopia’s ministry of finance is accredited, as is Kenya’s National Environment Management Authority, and India’s National Bank for Agriculture and Rural Development.

Second, what we get out of the fund will largely depend on our capacity to design projects with strong impact. In a cash-constrained environment, our decision makers need to be creative about how to make this happen. In particular, post-devolution the role of the provinces is critical in identifying and detailing the projects that will qualify for GCF funding. Today, the provinces are where the capacity and understanding of what it will take to do this successfully is the weakest. Project pipelines presented by them to the board have not been properly conceived, and there is very little understanding of how the approval process actually works. There is serious need to address these gaps if Pakistan wants to put together a strong project pipeline to access the GCF. To address this, the ministry of climate change can play a critical role by bringing in technical expertise that is currently globally available, particularly for the purpose of improving project designs.

Similarly, could the ministry of finance or the economic affairs division not assist the ministry of climate change in accessing some world class resources to help shape Pakistan’s thinking on how to combat climate change? This year alone, the GCF aims to approve projects worth 2.5 billion dollars, and Pakistan risks being able to access almost none of it directly.

Third, if this is to change, government departments in particular will have to get out of the mindset of thinking in silos. There are a number of entities that have a critical role in this, not just the ministry of climate change. To name a few, the ministry of finance, the economic affairs division, the ministry of foreign affairs, the Planning Commission, the National Disaster Management Authority, and each of the provinces. Either each of these entities should see their tackling this issue as a zero-sum game, and jostle for a greater role, or they can help assist each other in the success. Easier said than done, but I’m not sure there is an alternative.

Finally, very few may be aware that Pakistan is actually privileged to be one of the 24 board members of the GCF, along with countries such as China, US, UK, Japan, Australia, Saudi Arabia, India, South Africa, and Egypt. As a board member, Pakistan has the opportunity to leave its legacy on how the fund evolves. What does Pakistan stand for on climate change? What does it want its contribution to be? Does it want to be a champion or a leader of third world positions on the topic? Again, this is possible, but not if a sole representative of the government is tasked with this. The key to greater visibility and contributing globally to such an evolving issue requires more in-depth preparation. My advice: benefit from the wisdom available in country. There is enough expertise in Pakistan to help shape the government’s position on this important global fund. If government seeks help from the private and development sector, they will contribute significantly, with both the country and the government benefiting
as a result.

The writer is an independent expert who follows global developments of climate finance, particularly the Green Climate Fund. She can be reached on Twitter at @Kashmala_14

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