Climate Policy Initiative: This paper examines the M&E systems applied by a selection of eight multilateral and bilateral intermediaries, as well as the United Nations Framework Convention on Climate Change reporting framework. It was originally developed as a background paper for ‘Improving the Effectiveness of Climate Finance: Key Lessons’, a joint study by a consortium of researchers from Environmental Defense Fund, Climate Policy Initiative, Brookings Institution, and Overseas Development Institute on the topic of the effectiveness of climate finance published in November 2011.
Title: Public Climate Finance: A Survey of Systems to Monitor and Evaluate Climate Finance Effectiveness
Multilateral and bilateral intermediaries, such as national development banks and agencies, and multi-donor financial institutions, are a crucial part of the financing landscape. Starting with the Gleneagles Summit in 2005 and spurred on by ambitious international financing goals, intermediaries are collaborating closely on climate finance activities (e.g. AfDB et al., 2010; UNEP, 2010).
This is good news, and improves prospects of achieving the massive scale up required to transition the world’s economy to a low-carbon, climate-resilient future. Among them, intermediaries distribute more than one third of the currently available international climate finance – an amount of about USD 39 billion a year (Buchner et al., 2011a), but most likely even more.
However, fiscal austerity across developed economies is straining public budgets, creating growing pressure to demonstrate that every public dollar invested is extracting value for money. There is growing awareness about, and demand for, transparent and coherent approaches to measure, monitor and evaluate results from international climate spend; including under the new Green Climate Fund (GCF). Understanding what is working, what is not working, and why, is necessary not only to justify ongoing public expenditures, but to ensure that effective interventions can be replicated. To this end, identifying lessons from ongoing efforts to monitor and evaluate (M&E) effectiveness are essential.
This paper examines the M&E systems applied by a selection of eight intermediaries – five multilateral and three bilateral financial institutions and dedicated climate funds – to monitor and evaluate climate finance spending and measure the effectiveness of interventions. Our hope is that intermediaries, government institutions and other organizations developing systems to M&E the effectiveness of climate financing, can benefit from the experience of the institutions included in this report.
In general, intermediaries are working hard to develop or improve tools, frameworks, and methods to assess the effectiveness of climate finance. The paper also briefly considers the UNFCCC reporting framework, and finds that if developed to its full potential, this could provide an excellent platform to assess the effectiveness of climate finance.
Nevertheless, intermediaries can do much more to develop rigorous and consistent methods to evaluate transformative impacts (AfDB et al., 2010). Other important findings are:
Results-based M&E systems that embed a core group of qualitative and quantitative climate related indicators into projects themselves, and guidelines on how to use them, would streamline evaluations and promote consistency and comparability.
Real time impacts evaluations may provide valuable early insights on progress and facilitate corrections during the project implementation phase, and more accurate assessments of the effectiveness of interventions over time.
Internal and external information sharing promotes faster learning and better accountability.
Building on project evaluation models, portfolio- based approaches may highlight particularly innovative or transformative investment options, and possibly allow more strategic interventions with lower transaction costs.
The reform and review underway suggest that lessons are being applied to existing and new tools, methods or strategies to monitor and evaluate finance more effectively. For example the Climate Investment Funds’ use of investment criteria, results frameworks and work to narrow indicators to a core group has potential to streamline monitoring and evaluation while retaining robust benchmarks. Alternatively, Norway’s introduction of real time evaluations and qualitative indicators to evaluate impacts on international negotiations and progress toward country-specific policy frameworks, recognises that many interventions themselves are often means to an even greater end – a coordinated international response. Both examples – more rigorous assessment of objectives and detailed measurement of impacts, as well as better real time understanding about what is working and what is not – will be essential ingredients to enable true comparisons of, or understanding about relative effectiveness.
The final ingredient for a successful M&E system is simplicity. It is important to balance the need for rigor and comprehensiveness with the recipient country’s capabilities and related transaction and administrative costs, and to focus on information that is genuinely required to understand how well money is being spent and the impact it is having on tackling the global challenge of climate change.
Started in year 2010, ‘Climate Himalaya’ initiative has been working on the mountain and climate related issues in the Himalayan region of South Asia. In the last two years this knowledge sharing portal has become one of the important references for the governments, research institutions, civil society groups and international agencies, those have work and interest in Himalayas. The Climate Himalaya team innovates on knowledge sharing, capacity building and climatic adaptation aspects in its focus countries like Bhutan, India, Nepal and Pakistan. Climate Himalaya’s thematic areas of work are mountain ecosystem, water, forest and livelihood. Read>>