Climate Change Financing in the Philippines

JEAN R. CENTENONational Economic and Development Authority

24-26 June 2012Bangkok, Thailand

I. Mainstreaming Climate Change (CC) in the 2011-2016 Philippine Development Plan and the 2011-2016 Public Investment Program

II. Reported Programs and Projects (PAPs) in the 2011 Official Development Assistance (ODA) Report

a. Percentage Share of CC PAPs in the 2011 ODAb. Percentage Distribution of CC PAPs per Sectorc. Sources of CC Financing / Existing Financing Window

III. Potential Sources of Climate Change FinanceIV. Opportunities and Challenges in programming and

mobilizing public investment for CC

Outline of Presentation

• Anchored on President Benigno S. Aquino III’s “Social Contract with the Filipino People”

• Overarching theme: inclusive growth and good governance

+NARD (16-POINT AGENDA)

ACHIEVE INCLUSIVE GROWTH, CREATE EMPLOYMENT OPPORTUNITIES

AND REDUCE POVERTY

6 out of 10 chapters of the PDP are CCA/DRR proofed .

Strategies espoused in the PDP are consistent with the actions required in the 2011-2028 National Climate Change Action Plan (NCCAP).

PDP is currently being revalidated to ensure that strategies remain relevant and achievable.

I. Mainstreaming Climate Change in the 2011-2016 Philippine Development Plan

• Strengthening institutional capacities of national and local governments for CCA and DRR

• Improving adaptive capacities of communities to the impact of climate change

• Building resilience of the natural ecosystems• Promotion of environment friendly technologies for

industry and transportation sectors• Promotion of clean and renewable energy

Major CC/DRR/M Strategies in the 2011-2016 PDP

Mainstreaming Climate Change Adaptation and Disaster Risk Reduction in the 2011-2016 Public Investment Program

Sector Cost (US$ billion)

# of Projects

%Share

Typology of activities

Agriculture & Agrarian Reform 0.06 25 <1

• formulation/enhancement of AFM plans• promotion of technologies for CC in

agriculture • capacity building including IEC on CC

ENR 1.32 21 17.75

• formulation/enhancement of ENR framework plan;

• integration of CC technologies in watershed management/forestry, biodiversity conservation, solid waste management, and sewerage system activities; and

• capacity building including IEC on CC

CCA and DRR/M (including flood control)

3.30 91 45

• formulation/enhancement of local land use plans;

• installation of early warning system, forecasting/modeling device, hydro-meteorological equipment; and

• capacity building including IEC• construction of dams

Energy and Power 2.74 32 37 • promotion of Renewable Energy

Total 7.42 169 100

II. ODA Programs and Projects (PAPs) with CC ComponentsPercentage Share of CC PAPs in the 2011 ODA

Percent distribution of 2011 CC PAPs per sector/category

Sources of 2011 CC PAPs Financing

1. Multi-lateral Sources ADB, FAO, GEF, IFAD, MDGF, UNDP, UNEP, UNIDO, and WB (e.g.,

through the climate change window on Special Climate Change Fund – SCCF)

2. Bilateral Sources AUSAID, Austria, China, Czech Republic, Germany (BMZ, GIZ, KfW or

through Initiative for Climate and the Environment - IKLU), Japan (JICA, KOICA, JIRCAS or through Cool Earth Partnership ) New Zealand, Norway, Spain, and USAid

56%

III. Potential Sources of CC Finance

Name of Facility Features/Terms and Conditions StatusPhilippine Survival Fund (PSF)- Republic Act 10174

• Domestic “rewards fund” aimed at addressing urgent adaptation needs

• Finance adaptation programs and projects that are directly supportive to the NCCAP

• Sources of the PSF managed by the Fund Board

PhP1 billion from the national budget

Augmented by donations, grants, endowments

Implementing Rules and Regulations for RA 10174

submitted to the President for his review and approval.

III. Potential Sources of CC Finance

Name of Facility Features/Terms and Conditions Status

Adaptation Fund (AF)-Established to finance concrete adaptation projects and programmes in developing country-Parties to the Kyoto Protocol and are particularly vulnerable to the adverse effects of climate change

-Financed from voluntary contribution of Annex1 country-Parties and (2%) share of proceeds of CDM project

About USD 109.3M funds available as of 2011 and expected to increase to about USD 204M by end 2012

It has three modalities, namely:a) National Implementing Entity (NIE)- Requires a Designated Authority to

endorse adaptation programs and projects for the country

- USD 10M cap per country

b) Multilateral Implementing Entity (MIE)

- Cap of 50% of the total adaptation fund

c) Regional Implementing Entity (RIE)

• Available but there is a need for the country to establish the NIE to directly access the AF.

Name of Facility Features/Terms and Conditions Status

Green Climate Fund (GCF)-Established as an operating entity of the financial mechanism of the Convention under Article 11.

-The GCF will support projects, programmes, policies & other activities in developing country Parties. The Fund will be governed by the GCF Board.

• A total of USD 100B annual funds from developed countries for climate change adaptation and mitigation activities.

• Mechanism to access funds and institutional arrangement are still being determined.

• Designation of the Philippines as member/alternate to the GFC Board.

III. Potential Sources of CC Finance

IV. Opportunities and Challenges in programming and mobilizing public investment for CC

A. Opportunities• CC strategies are already identified as priority in the

2011-2016 PDP as well as local and sectoral plans• Availability of success stories on pilot

projects/interventions on CC/DRRM which can be up-scaled

• CC projections and sectoral vulnerability assessment conducted as basis for CC interventions design

• Availability of funding window to support implementation of CC/DRR/M initiatives

IV. Opportunities and Challenges in programming and mobilizing public investment for CC

B. Challenges• Logical tagging/classification of CC and DRR/M-

related PAPs • Harmonization of PAPs identified in the 2011-2016

PIP with the interventions/PAPs geared toward achieving the immediate outcomes of the NCCAP

• Capacity building for implementing climate change actions

• Further involvement of sub-national actors at the planning stage

End of Presentation