Is Climate Finance Supporting Frontline Communities? Most Governments Don’t Know
Climate impacts are here, now, and they are felt most acutely by local communities already disproportionately vulnerable to economic, health and other stressors. Yet the world lacks information on how much climate adaptation finance is actually reaching and supporting these at-risk communities.
While the world spends roughly $30 billion on climate adaptation every year—a far cry from the needed $140–$300 billion by 2030—we don’t know how much of this limited funding reaches adaptation projects led by local communities. National governments and international funders do not systematically track or report finance for locally led adaptation, and there are limited guidance or metrics for doing so. This is a major barrier to ensuring communities can access the resources needed to build resilience to droughts, floods, erosion and other climate impacts.
Why Is Locally Led Adaptation Important?
Locally led approaches to adaptation give local people and communities decision-making power in adapting to the effects of climate change, as well as the resources, agency and support they need to make sound investments in climate adaptation measures. Still, most adaptation remains top-down, led by entities like donors, large intermediaries and central governments. A recent WRI analysis of community-centered interventions found that only about 6% of the 374 projects and programs reviewed featured locally led elements, such as local decision-making power.
Without tracking and reporting, it’s hard to know if money is reaching local actors, or if it supports local agency in decision-making. Tracking and reporting also provides information governments can use to support other objectives, such as reporting progress on development targets and mobilizing additional resources. More importantly, such transparency enables others — communities, civil society, community organizations and the media — to hold key decisionmakers accountable.
Why Isn’t Anyone Tracking Adaptation Finance at the Local Level?
Tracking financial flows for locally led adaptation can be complicated and is not yet standard practice. Barriers like complexity of disbursement mechanisms; unclear planning, consultation and decision-making; lack of consistent and accessible budgetary and overseas development assistance data; and limited resources are reasons why most governments do not assess whether domestic or international finance supports locally led adaptation.
How to Track Adaptation Finance at the Local Level
Tracking finance for locally led adaptation is possible despite these challenges. WRI’s new research paper offers approaches governments can take.
First, governments need to know what information to track. To understand whether finance supports the “local” in locally led adaptation, we can use metrics to track quantity: how much or what proportion of money is allocated to (and managed by) the subnational level. These measures can then be further divided by sector or jurisdiction.
Understanding whether finance supports the “led” in locally led adaptation is not quite as straightforward. Quality metrics help governments assess whether finance that reaches the local level is enabling local agency over adaptation decisions. These metrics measure four characteristics, based on the Principles for Locally Led Adaptation:
- Devolution of decision-making so that funding for adaptation happens at the lowest level appropriate, such as local governments and civil society organizations.
- Flexibility for funding to fit local needs, priorities and evolving contexts.
- Patience to accommodate longer timeframes for achieving outcomes.
- Predictability for local actors to count on continued or future funding.
Next, governments can start tracking and reporting against these metrics. WRI’s research identified several options available to governments to assess how finance supports locally led adaptation:
1. Tag budgets to support locally led adaptation.
Climate budget tagging is a tool for identifying investments that are relevant to climate issues. Governments can update existing approaches to budget tagging to also track finance for locally led adaptation using various codes or weights to capture the quantity and quality metrics described above.
Examples of relevant budget tagging can be found in Jamaica, which assigns a single code of 005 for disaster management funding, and Kenya, which uses a set of four digits to describe how prominently activities aim to support climate change adaptation and/or mitigation. In Nepal, the government uses designated codes to track finance that aligns with pro-poor and gender-sensitive characteristics. A similar budget tagging approach can track characteristics of finance that supports locally led adaptation.
2. Review previous investments and programs.
While budget tagging systematically tags investments and spending, expenditure reviews look back at past spending. Many governments are already using different types of public expenditure reviews to inform their efforts to integrate climate finance into their programs and budgets. Countries can similarly review expenditures to identify and track finance for locally led adaptation. Conducting these types of backward-looking reviews may be more feasible for countries that do not already have budget tagging systems in place.
Bangladesh, for example, has assigned weights to illustrate the proportion of different ministries’ budgets aligned with climate, gender and poverty objectives. The process of assigning weights presents opportunities to integrate quality metrics and track how finance has supported locally led adaptation.
3. Leverage existing policy and planning processes, such as regular surveys and assessments.
Countries may already be engaging in activities that report adaptation finance at the country level, presenting opportunities to include tracking and reporting finance for locally led adaptation. These include surveys of subnational climate and development activities, the National Adaptation Planning process, and the UNFCCC Biennial Assessment and Overview of Climate Finance Flows process.
In Ghana, the government collects data on climate funding that flows to civil society organizations and private sector actors manually through a biannual survey. A survey like this could help establish a baseline that can support local action: For example, governments could also include metrics on local actors’ level of meaningful involvement in decision-making.
Putting Adaptation in the Hands of Communities
Locally led adaptation ensures local people and organizations have agency over investments in their own communities. It is a systemic shift away from business-as-usual finance and decision-making practices. Tracking and reporting finance is just one step in the process: it must also be accompanied by measures to support local leadership and public participation, rebalance power in decision-making, redress social inequities, and increase quality, quantity, and access to adaptation finance.