Financing Capacity and Aid Effectiveness

The issue of climate change is gaining increasing attention worldwide, and leading to the establishment of a range of funds, including the Climate Change Investment Fund, the Adaptation Fund, the Forestry Carbon Partnership Fund, and the Green Climate Fund. According to UNFCCC, the Adaptation Fund will need $171 billion from now until 2030; of that $66 billion is for developing countries.

Overview of the workshop (Photographer: Mr. Hoang Thang)

On October 26 - 27 2011, SRD held a workshop on Aid Effectiveness for Climate Change Financing at V Resort in Hoa Binh province, in order to address existing problems in delivering aid programs, and develop the financing capacity for climate change and aid effectiveness. Attending the workshop was Maria Theresa-Lauron from Reality of Aid, representatives of government offices and local Civil Society Organizations (CSOs) of Vietnam.

At the beginning of the workshop Mrs. Vu Thi Bich Hop, Executive Director of SRD, stressed the urgency of improving the role and capacity of CSOs as we head towards the upcoming 4^th High Level Forum on Aid Effectiveness in Busan, Korea and the COP 17 in Durban, South Africa, both held in December this year. She also stated that while climate financing is a large-scale, worldwide concern, the issue of importance for CSOs was the effectiveness of development and increasing our capacity in approaching climate change funds.

At the beginning of the workshop, Mrs. Maria Theresa mentioned the current red-hot issues that CSOs need to pay attention to. She then presented a comprehensive research project on financing for climatic change and pointed out the five basic rules of climate change financing; (1) adequate compensation, (2) democratic administration, (3) human rights based, (4) nationally oriented and democratic ownership, and (5) climate action is an important part of common development. She also commented on the importance of establishing a "firewall" between Official Development Assistance (ODA) and climate change financing. The "firewall" will distinguish between ODA and climate change financing, and the difference in the purpose of the financing. ODA is used to promote sustainable development and eradicate poverty while climate change financing is used to pay for climate actions, including mitigation and adaptation. There may be a risk that the financing would be used for wrong purpose without the "firewall".

Representatives of governmental offices working the field of climate change also presented on climate change impacts in Vietnam, current international support for our climate change response, financing and current financial mechanisms for international support through the Support Program to Respond to Climate Change (SP-RCC). These issues were the key concerns for CSOs. The representative of the Program Coordination Board of the Ministry of Natural Resources and Environment (MONRE) stated that the difference between SP-RCC and other programs is that SP-RCC is a typical program where the fund is mixed with the national budget and managed under the current Vietnamese law whereas the financial mechanism is ratified by the Prime Minister. At the moment, MONRE is drafting the "Climate Change Response Strategy" and the "National Action Plan", which will be submitted to the Prime Minister. The Ministry of Planning and Investment (MPI) is also building a "Green Growth Strategy". These legal frameworks provide proper direction to stakeholders in developing their response to climate change.

At the workshop, financial issues and aid effectiveness were also discussed by CSOs and representatives from governmental offices, including MOF, MONRE and the Research Institute. Local CSOs from Phu Tho, Nam Dinh and Thanh Hoa provinces also had discussions to share their local experiences. A group discussion was also held to share the difficulties that local CSOs face, including lack of relevant information and CSOs being undervalued, and possible solutions were explored. After two-hardworking days, most of the unresolved issues had been shared and discussed in detail, and possible solutions explored, in order to move forward with further developing climate change financing capacity and aid effectiveness.

-SRD-