PERSPECTIVES FOR IMPROVING THE OECD DAC CLIMATE-

AND BIODIVERSITY-RELATED DEVELOPMENT FINANCE STATISTICS

Prof A.Damodaran Indian Institute of Management Bangalore

Views expressed here are made strictly in personal capacity

STATUS OF USE OF DAC AND RIO MARKERS 1. Developing Countries look forward to precise stats on

projects/programs where ODA (non grant flows – or grant equivalent ) are combined with MDB and other non MDB flows (like EXIM Bank loans) towards projects and programs

2. There is need for Information tools that hybridize ODA loans. MDB loans, TA Investments with private sector counterpart guarantees including risk guarantees

3. India has a quazi Rio Marker system employed for Biodiversity that has features of Rio Markers 1,2 and 3 ( core, non core and peripheral ). But these relate to domestic budgets

4. The larger task is to have a similar system for external resource flows which can be done through the modernized DAC system

5. It will be important to work on co-efficients for Rio Marker 3 so that the degree of mainstreaming will be evident in development assistance

WAY FORWARD 1. ‘Harmonization of Methodology’ workshops particularly on Rio

Markers with BD budgeting systems 2. Awareness building at the Federal and State Levels 3. Results of Pilot exercises to be disseminated

KEY QUESTIONS What definitions are being used in-country to track climate change mitigation, adaptation and biodiversity activities?

How are climate- and/or biodiversity-related activities identified in national, sub-national and sectoral budgets? What methodologies and approaches are used?

What are the challenges experienced in tracking climate- and biodiversity-related finance?

UNDERLYING PRINCIPLES OF RESOURCE REQUIREMENT ASSESSMENT IN ENVIRONMENT SECTOR : INDIA

History of ‘aggregation based need assessment based on sectoral approaches Line Departments at the village and block/range /divisional levels prepare need assessments, which are aggregated at the Provincial levels and projected to Planning Authorities at the National level

National level allocations tailor allocation of resources to availability of resources and possibility of achieving success in execution – ie capabilities as evident by physical progress achieved in the previous plan (the latter can be enhanced by GEF and other externally aided projects)

In the case of development programs, there is evidence of local self government based plans which is aggregated upwards

Either way there is an effort to co-relate needs as defined in physical terms with needs as defined in financial terms and also develop benchmarks of financial requirements per unit of ecosystem conserved (say ideal costs/ha for land treatment under Integrated watershed management Projects or on afforestation in per hectare terms)

ASSESSMENT METHODOLOGY:BIODIVERSITY

Is a constrained assessment model depending on availability of financial resources

We look at likely availability of resources and work on fulfillment of needs within these resource constraints

We took core funding and non core funding We assume that non core funding require structural adjustments to tune it to Aichi targets which we related to global environmental benefits.

This we assume to be the role of GEF and externally aided funds (TA, capacity building and technology leveraging)

We divided Aichi targets into enabling ones, policy reform requiring and programmatic ones and postulated a flat 20% of total budget for the first type

HOW ARE CLIMATE- AND/OR BIODIVERSITY-RELATED ACTIVITIES IDENTIFIED IN NATIONAL, SUB-NATIONAL AND SECTORAL BUDGETS?

Not Specifically identified or marked in National, Sub-National Budgets /Sectoral Budgets

However marked in terms of Core, non core and net peripheral items in the context of the National Biodiversity Strategy and Action Plan

METHODOLOGY Core : Aggregation of Direct Conservation based budgets of Ministry of Environment , Forests and Climate Change and Department of Forests, Ecology ,Forests and Wildlife of Government of States (Track 1 Rio Marker)

Non Core : Budgets that are devoted to non conservation based Environmental Protection Activities like pollution abatement and hazardous substances management that incidentally aid biodiversity conservation ( modified version of Track 2 Rio Marker)

Peripheral: Development Projects that have environmental protection aims as well ( as in Track 3 of Rio Marker)

Source: http://indiabudget.nic.in

Ministry of Environment & Forests:

Rs. 2635.52 Crores (09.52 %)

Ministries Relevant to Biodiversity:

Rs. 25037.43 Crores (90.48 %)

Leverageable Proportion

Share of Core and Peripheral Annual Funding on Biodiversity Conservation (2010-11) Source : MoEF and CC

(2014)

Ministry of Environment & Forests(Core)

Schemes of other Ministriesrelevant to BiodiversityConservation : Non- Leverageable

Schemes of other Ministriesrelevant to BiodiversityConservation : Leverageable

Source: http://indiabudget.nic.in

0.65

99.35

Share of Outlay on Biodiversity Relevant Schemes in the Aggregate Budget of Government of India during the year 2010-11 ; Source : MoEF and CC

2014

MoEF &MinistriesRelevant toBiodiversity(Rs.26312.95Crores)

Source: Annual Report of Ministries Concerned for 2010-11

13.59

2.57 0.31

9.49

4.12 56.32

0.72

Percentage of Total Budget Spent by Various Ministries of Government of India (other than MoEF) on Biodiversity

Relevant Schemes during the year 2010-11: Source: MoEF and CC 2014 Ministry of Rural Development

Ministry of Urban Development

Ministry of Earth Sciences

Department of Agriculture

Department of Animal Husbandry

Indian Council of Agricultural Research(ICAR)

Department of Ayurveda Yoga,naturopathy, Unani, Siddha andHomeopathy (AYUSH)

38.75

61.25

Relative Shares of Central and State Governments in Core Annual Funding on Biodiversity

Conservation during the year 2010-11 (in %) (Source:MoEF and CC 2014)

Government of India (Rs. 2429 Crores) Average Spending by States (Rs. 3840 Crores)

Source: Annual Report of Ministry of Environment and Forests

INDIA: RELATIVE ALLOCATION PROFILE (SOURCE: MINISTRY OF ENVIRONMENT, FORESTS AND CLIMATE CHANGE,2014:INDIA'S FIFTH NATIONAL REPORT TO THE CBD)

Core funding by States in 2013-14 INR 5025 crores 12th Finance Commission (2005-2009) INR 1000 crores 13th Finance Commission(2010-2014) INR 5000 crores

India: Biodiversity Conservation Funding by States (Source: Ministry of Environment, Forests and Climate Change,2014:India's Fifth National Report

to the CBD)

CHALLENGES : MULTIPLIERS USED TO ESTABLISH CONTRIBUTION

OF PERIPHERAL FUNDING

India: Multipliers Used (Source: Ministry of Environment, Forests and Climate

Change,2014:India's Fifth National Report to the CBD)

OTHER CHALLENGES Demand Side Resource Assessment Secondary Demand for Services Unit cost assessment Variations Local Level Resource Assessment Decomposing Co Benefits

CLIMATE CHANGE: CURRENT APPROACH

Global Assessment – National Assessment –National Implementation National Assessment is Impact Assessment not resource flow assessment

National Implementation –Project Finance for Mitigation/Adaptation: Policy Instruments – Emission Trading Standards – Insurance

EMPHASIS GHG Assessment Vulnerability Assessment and Adaptation Mitigation including Carbon Sequestration potential Integrated Assessment

POSSIBLE APPROACHES TO CLIMATE CHANGE RESOURCE ASSESSMENT Move to Program Based Approaches from Project Based Approaches Sectoral Aggregation after decomposing co-benefits Multiplier/Co-efficient to tap secondary impacts of Adaptation and Mitigation

SECTORS: CLIMATE CHANGE Environment and Forests

Wasteland Development Board

National Afforestation and Eco development Board

Agriculture

Energy

Livestock

Industry

Water Resources

Urban Development

Rural Development

Health

New and Renewable Sources of Energy

Transport

THE END