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ASSESSING INVESTMENT & FINANCIAL FLOWS
FOR CLIMATE CHANGE: INTRODUCTION
Bay Gardens Hotel, 22 May 2009, Castries, St Lucia
PROJECT CONTEXTHernan Carlino, Argentina
Why consider climate change in development planning
Climate change impacts different sectors, cross-cutting
If not addressed in long-term action, climate change costs will be high
Countries may want to position themselves To ensure that the negotiation outcomes are
coherent with national interests & priorities To be able to participate in the mechanisms
that will be created
Why consider climate change in planning
Importance of planning tools To identify national priorities To facilitate cooperation among different
ministries To build strategies to deal with climate
change To create a coherent base of information
of climate change impacts on and opportunities in key sectors
These points are addressed in the project
Project context
Why an I&FF assessment
Objective of this session Introduction to the project and its 3 stages Introducing the concept of I&FF assessments How to proceed: Workplan preparation
PROJECT STAGES & SUPPORTBhujang Dharmaji, UNDP
Sequencing of national activities
Pre-workshop preparation (2 months)
National workshop
on Bali Action Plan,
national issues
Assessment of I&F flows to address CC mitigation/adaptation options for up to 3 key economic sectors (6-8 months)
National workshop to present
results, policy
options• Key line
ministries engaged
• Key sectors identified
• National issues papers prepared
National workshop on:
• Bali Action Plan
• Adaptation, mitigation, technology transfer,
financing + LULUCF
• Key sectors
UNDP methodology on assessing I&F flows
Backstopping from regional centres of excellence
• Update on Bali Action Plan negotiations
• I&F flows assessments presented
• Post-2012 preparation
Preparation stage Implementation stage Reporting stage
Define & agree National objectives/goals Key sectors/scope I&FF team Capacities/needs: methods, information… Institutional arrangements On workplan/budget Available scenarios
Preparation stage (1- 2 months)
Conduct I&FF assessment in key sectors selected by the country using the UNDP I&FF methodology and the sector specific guidance & reporting guidelines
Guidance & procedures for Documentation & archiving Spreadsheet management Quality control & quality assurance
procedures
Implementation stage (5 – 6 months)
Ongoing activity, not starting at the end of the assessment
Define outcome (decision making tool, policy tool), target group (internal/external) to draft report
Ensure good drafter for preparation of report(s)
Purpose: documentation of steps and processes for interpretation of outcomes & for later follow-up work
Reporting stage
Support to the 3 stages of the project Work plan guidance Methodological guidance Reporting guidance
Regional Centres of Excellence Training on assessment of I&FF 20 days of technical backstopping incl.
Review of workplan, draft and final assessments
Guidance on scenarios, data, approach
Guidance available + support provided
Guidance available + support provided
Knowledge platformPublic space Provides database of documents on climate
change Provides information on the project Dynamic: Users can upload resources;
results and updates “pushed” to site visitors
Member space Faciliate sharing of experiences in groups
(country groups, thematic groups) Private access for national project activities
THE I&FF ASSESSMENTAngel Menendez, ITDT
Investment Flow An investment flow (IF) is the capital cost
of a new physical asset with a life of more than 1 year
Limited to new physical assets, because of climate change implications for the duration of the operating lives of the facilities & equipment purchased
Definition I&FF and O&M
Financial Flow A financial flow (FF) is an ongoing
expenditure on programmatic measures; financial flows encompass expenditures other than those for expansion or installation o few physical assets.
Primarily ‘operation & maintenance’ (O&M) costs: salaries, raw materials, equipment maintenance, depreciation, utilities, rent, insurance, taxes etc.
Definition I&FF and O&M
Operation & Maintenance (O&M) costs of new physical assets
The physical assets purchased with investment flows will have operation & maintenance (O&M) costs associated with them
Can vary considerably among investment flow types & have a significant effect on the total cost of an investment
Definition I&FF and O&M
Goals Development of national policy options to
address climate change in key sectors Increased capacity to co-ordinate negotiating
positions at national level & participate in the UNFCCC process
Outcomes National awareness raised Investment & financial flows assessed for key
sectors Web-based knowledge platform populated
http://www.undpcc.org/
Project goals & outcomes
What questions does the I&FF assessment help answer?
What are the adaptation/mitigation options in certain sectors in the next 25 years?
Who is investing in the sector/major players & sources?
What shifts/increase in I&FF will be needed in the sector?
What will be the overall needs for additional I&FF?
Why an I&FF assessment?
IMPORTANT ISSUES FOR WORKPLAN DEVELOPMENTAngel Menendez, ITDT
How to scope a sector Determine specific subsectors that will be
included e.g. within agriculture: crop cultivation,
livestock, fishing … Determine which processes, activities,
entities and geographic regions are included in the sector
Define scope of the sector
Water
Health
TourismForestry
Energy
Agriculture
GLOFs
Electricity
Oil/gas
REDD
Livestock
Coastal zones
Water-borne diseases
MangrovesBioenergy
Energy plantations
BiofuelTransportFood security
Hydropower
Potential sectoral overlaps
Define scope of the sector
Any of these analytical approaches can be used to develop scenarios, & associated streams of annual I&FF and O&M costs A suitable sectoral model A sectoral plan A projection of sectoral trends The current situation in the sector A combination of those approaches
Select analytical approach
Sources of information
Sources of information include National Communications (1st, 2nd) National strategies & plans System of National Accounts (SNA) Systems of integrated environmental and
economic accounts (SEEA) etc.
What is a scenario? An internally consistent & plausible
characterization of future conditions over a specified time period
A baseline scenario reflects business-as-usual conditions, describes what can occur without new policies to address climate change
A mitigation scenario incorporates measures to mitigate GHG emissions
A adaptation scenario incorporates new measures to respond to the potential impacts of climate change
Scenarios
Team composition
Reporting
Sectoral results are compiled so that mitigation/ adaptation investments for each source & investment entity, & for each year, can be compared across sectors & across mitigation/adaptation
“Reporting Guidelines for the Assessment of Investment & Financial Flows to Address Climate Change” contains spreadsheets for this
Define purpose & target group to prepare report accordingly
NEXT STEPSBhujang Dharmaji, UNDP
Workplan development
Workplan Outlines clearly how the I&FF assessment
will be done during the following 6-8 months
Defines clearly The scope of the sector Data needs, availability and gaps
Proposes the organisational framework how the assessment will be done
I&FF training
The I&FF training Is a technical training for the country
teams of each selected key sector Will be conducted by the Regional Centre
(PASS, ITDT, TERI, Oxford Consultant) Will provide hands-on training how to
conduct the I&FF training in the selected national key sectors through the sector teams
Steps in the Sectoral Assessments of I&FF to Address Climate Change
Q&A CLARIFICATIONS
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