National Climate Funds:
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Transcript of National Climate Funds:
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National Climate Funds: Learning from the long standing experience
of Asia-Pacific countries
Silvia IrawanPresented in Regional Clinic on the Design and Management of National Climate Funds
Bangkok, 6 September 2012
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Background
Asia-Pacific Community of Practice on Climate Finance (incl. e-discussion, case study and regional clinic)
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e-Discussion on National Climate Funds (NCFs)• Participants: 167 participants (32 countries) with 30 active
contributors
• Structure of discussion: Run for 10 weeks and guided by a set
of questions posted by a moderator
• Tools: email and UN Teamworks - a collaborative webspace
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Case study: 7 cases• Bhutan Trust Fund for Environmental Conservation (BTFEC)
• Cambodia Climate Change Alliance (CCCA) Trust Fund
• China Clean Development Mechanism Fund (CCDMF)
• Lao Environmental Protection Fund (EPF)
• Micronesia Conservation Trust (MCT)
• Thailand Energy Conservation (ENCON) Fund
• Tuvalu Trust Fund (TTF)
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Why are countries considering NCFs?• Overcoming the capacity problem & a stepping-stone
• Direct reporting and higher fiduciary standards
• Earmarking of government budget
• Reaching those who need the funds most
• Smart investment & leveraging private finance
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Why should countries be mindful about NCFs?
Undermining the soundness of:• fiscal policy• fiscal discipline• transparency
Extra-budgetary funds do not achieve their intended policy goals
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Stages: establishment and management of NCFs
Decision making process
Designing Management
Time
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Feasibility Criteria
Capacity
Purpose:
Strategic Role
Time and cost effectiveness
Political feasibility
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Type of Funds
Name of fund Type of Fund
Bhutan Trust Fund for Environmental Conservation Endowment fund
Lao PDR: Environmental Protection Fund) Endowment & sinking funds
China Clean Development Mechanism Fund Revolving fund
Thailand: Energy Conservation Promotion Fund Revolving fund
Cambodia Climate Alliance Fund Sinking fund
Micronesia Conservation Trust Endowment & sinking fund
Tuvalu Trust Fund Endowment & revolving funds
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The Design• Capital
• Legal arrangement
• Governing body
• Beneficiaries
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Management features:• Innovative programs
• Project cycle: transparency and efficiency
• Working with beneficiaries
• Performance based monitoring
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The establishment of NCFs can be considered when:• Earmark government budget and reach those who otherwise
are likely to be excluded when money is channeled through a
formal government system
• Smart investment of finances and leverage resources from
private sector
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The establishment of NCFs should be avoided when:• A duplication of a government function
• Only to pool resources from external and domestic sources to
finance climate actions
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Required Time and Resources
Multi-Donor Trust Fund
Endowment FundNationalized sinking
fund
Revolving fund
Less More