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Global Forum Shares Lessons on Climate Finance Effectiveness

global-forum6 January 2014: The Global Forum on Using Country Systems to Manage Climate Change Finance gathered over 170 participants from ministries of finance, planning and environment to share climate finance effectiveness lessons.

Development partners, civil society organizations (CSOs), and representatives from the UNFCCC and the Green Climate Fund (GCF) were also in attendance. During the Forum, which took place in Incheon, Republic of Korea, on 2-3 December 2013, country systems were defined broadly to include national and local systems for planning, policy coordination and implementation, budgeting and financial management, procurement, and monitoring and evaluation. Climate finance was defined based on a country-led definition of climate expenditures from both domestic and international sources. Participants identified the following benefits of country systems for climate finance: greater ownership; reduced duplication; domestic transparency and accountability; and more opportunities for transformation and mainstreaming. They added that political, institutional and fiduciary issues pose challenges for using country systems.

The Forum reviewed country experiences in using such systems, including opportunities, innovations and challenges. Participants underscored the importance of, inter alia: tracking climate spending through the budget and other extra-budgetary systems; building capacity to support the new institutional frameworks; strengthening mechanisms for measuring climate policy impact and results; involving local government to channel climate finance; and strengthening transparency and accountability mechanisms.

Forum participants agreed that the GCF business model should: build upon existing country systems to manage finance; provide support for country readiness to absorb climate finance through country systems; promote a programmatic approach covering both adaptation and mitigation; ensure transparency and accountability of its operations; and create an enabling environment for the private sector. Addressing the Forum, GCF Executive Director Hela Cheikhrouhou encouraged countries to view the GCF as a fund that could drive transformational change through providing additional catalytic finance.

Forum participants reviewed a framework for learning lessons on the use of country systems to manage climate finance that will be useful to the UNFCCC and the Busan Partnership for Effective Development Cooperation. The suggestion was also made that the Forum consider developing a concrete work plan and an active strategy to engage all relevant stakeholders.

The Forum was co-organized by the UN Development Programme (UNDP), the Republic of Korea, the Organisation for Economic Co-operation and Development (OECD) and the Civil Society Partnership for Development Effectiveness, and co-financed by the Governments of the Republic of Korea, Sweden and Germany, and the EU's Global Climate Change Alliance. [Forum Website] [Climate Finance Options Press Release]