The need for MRV and transparency framework in Pakistan’s climate finance

‘You can’t manage what you don’t measure’ famous quote of Peter Drucker explains perfectly the current situation of climate finance of the globe. Climate finance is the financing mechanism by the national, regional and international bodies to combat climate change impacts in terms of mitigation and adaptation activities. Pakistan, being one of the most affected countries from climate change, requires maximum financial resources to combat its impacts. The commitments made by Pakistan in order to address climate change include Nationally Determined Contribution (NDC) report under the Paris Agreement (PA), Pakistan Vision 2025-Pakistan’s development blueprint, National Climate Change Policy 2012 and Climate Change Bill 2017. Pakistan has been doing well at the planning front, but now they need to focus towards implementation of these plans. This can be done through arranging domestic resources as well as accessing international sources. In addition to planning and obtaining finances, Measurement, Reporting and Verifications (MRV) and transparency mechanisms are equally important for the efficient and effective utilisation and results. It allows institutions to have authentic statistical data which helps in building a legitimate case to obtain climate finance.

MRV and transparency in Pakistan’s climate finance are vital in building trust among parties; to show progress in achieving their commitments and to have an unbiased assessment of the project for further funding opportunities.

‘Having an open and transparent system that caters to finances related not only to greenhouse gas emission mitigation but also adaptation practices will build trust amongst developing and developed countries, something that is lacking at the moment’ said Dr Imran Saqib Khalid, Research Fellow at the Sustainable Development Policy Institute (SDPI). He said in this context, Pakistan will do well to ensure that all development projects in the country cater to a changing global climate as well as incorporate MRV mechanisms for greater transparency and accountability.

Ministry of climate change (MoCC) work towards transparency and accountability

MoCC has been working towards developing standards to make the climate change process efficient and effective. Recently MoCC has committed in Open Government Partnership (OGP) to develop:

  1. Open data on National Climate Change Policy and its implementation as well as the Ministry’s efforts in the field of climate finance; these will be placed in the MoCC website.
  2. Institutionalise the role of Civil Society (CS) in climate related decision making.

These commitments will enhance the transparency aspects of MoCC activities and make data readily available to the general public. Also, institutionalising the role of CS will make verification aspect more efficient.

Dr Seeme Mallick, climate finance expert, stated “Involvement of Civil Society in verification of the project and finance is an excellent tool to develop a framework of MRV and Transparency”.

MoCC staff from climate finance unit mentioned Capacity-building Initiative for Transparency (CBIT) to be established in the near future under the GEF funding. The purpose of the framework for transparency of support is to give a clear idea of support received and provided by the parties and to provide a complete overview of the financial report.

Syed Abu Ahmad Akif ,Secretary to the Government of Pakistan MoCC, mentioned during the Pre-COP23 Consultative Dialogue that ‘MoCC in collaboration with UNDP developed the Climate Public Expenditure Institutional Review (CPEIR) for Federal Government, Khyber Pakhtunkhwa, Azad Jammu Kashmir, FATA and Gilgit Baltistan. It accounts for all the financial spending on the climate change, and we are planning to code this in the budget.’

Climate Finance Opportunities

As Pakistan has ratified to the Paris Agreement on climate change, developed countries agree to make ‘finance flows consistent with a pathway towards low greenhouse gas (GHG) emissions and climate-resilient development’. It was decided that developing countries will receive financial resources to combat climate change impacts through mitigation and adaptation whereas developed countries should mobilise the finances to reach the previously agreed climate finance US$100 billion annual targets by 2020.

Pakistan can opt for a lot of climate finance opportunities; major ones include Green Environment Fund (GEF) and Green Climate Fund (GCF). The main goal of GCF after Paris Agreement is to support the aim of keeping climate change below 2 degrees Celsius. The GLOF project (supported by the Adaptation Fund and GCF) has received a lot of appreciation, and there are still many questions regarding the verification aspect of this project. Rina Saeed Khan, an environmentalist journalist who has visited the project’s two sites on the ground in Gilgit and Chitral, stated that she had heard from a lot of people living in the area who were not happy with the project’s design and some aspects of its implementation. So to have a national comprehensive standard set of MRV and transparency framework will make things more clear and efficient in the future.

Nationally Determined Contribution (NDC)

Pakistan has submitted its Nationally Determined Contribution (NDC) to the UNFCCC in which Pakistan elaborated its actions being undertaken both on mitigation and adaptation measures as well as expressed its commitments in reducing emissions. In the report it states that nearly 300 percent projects indicated an increase in emissions (from 405 MtCo2e to 1603 MtCo2e) during the period 2015 to 2030 and position Pakistan as one of the potentially high emission growth countries in the coming years. Pakistan plans to reduce the emission by 20%, only if they are provided with $40billion to mitigation and approximately up to $14 billion for adaptation.

During the interview with Author of NDC, BilalAnwar, General Manager at The Commonwealth Climate Finance Access Hub, he stated that ‘perhaps an independent entity is requiredwhich will assist the government and ensure transparency and consistency of climate change projects in Pakistan. It will also help in obtaining finances from around the globe. This entity can enhance the credibility’.

Way forward

Talking about the future of Pakistan’s climate finance, Kashmala Kakakhel, climate finance expert, stated that ‘by 2018, a Transparency Framework will be set up for the implementation of the Paris Agreement, and Pakistan should not shy away from being part of its development process. Sooner or later, if we want to access international climate finance, we will have to abide by stringent transparency systems. Therefore it is best to start being part of the process early on and aligning domestic systems accordingly.’

While we are aiming for climate finance inflows in Pakistan, there is a need to realise the importance of MRV and transparency sensitive details in it. Pakistan government, with MoCC being the focal agency, should bring structural change, and involve other institutions to achieve the target. Making the process more transparent and introducing MRV mechanism into climate finance is also in-line with international commitments like Paris Agreement and Open Government Partnership (OGP) commitment of National Action Plan (NAP) on openness, transparency and citizens’ involvement in government decision-making. As the commitments are volunteering, however, to have better chances of getting climate finance, Pakistan’s government needs to develop a significant mechanism to deal with the issue at the national level to make international finance institutions take Pakistan seriously and build trust to qualify for finance opportunities.

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