Development Gateway: An IREX Venture’s (DG’s) “At a Glance” series explores the highlights in DG’s white papers and other publications. In this installment of the series, we explore the white paper titled “Tracking Climate Finance in Africa: Political and Technical Insights on Building Sustainable Digital Public Goods,” which was written by Dr. Catherine Weaver from the University of Texas at Austin and Tom Orrell, previously of DataReady and now a Deputy Director of Programs at DG. Weaver and Orrell explore the importance of climate finance tracking (CFT), common barriers to establishing climate finance tracking systems, and five insights on developing climate finance tracking systems.
What is Climate Finance and a Climate Finance Tracking system?
In order to combat the effects of climate change, financing is needed to fund effective climate fighting strategies, including funding to develop tools, programming, etc. that aim to equip governments and communities to predict, prevent, and address the needs provoked by climate change. Overall, climate finance is funding aimed at not only bringing the world closer to compliance with such climate policy as the 2015 Paris Agreement but is also aimed at protecting individuals and communities who are particularly vulnerable to the impacts of climate change. A climate finance tracking system is the planned process(es) and infrastructure supporting the tracking and monitoring of climate financing so that its impact can be tracked, analyzed, and (when appropriate) advanced or duplicated.
The first barrier to climate finance and creating a climate finance tracking system is that the definition of climate finance is often subject to debate because of politically motivated contestation and ambiguity over what activities are directly or indirectly motivated by climate change concerns. Therefore, the first step in establishing a climate finance tracking system is arriving at a consensus amongst stakeholders (including countries, international organizations, the private sector, and civil society) on what counts as climate change activity.
Once a common definition of climate change activity—and therefore, what constitutes climate finance—is established, a climate finance tracking system is needed in order to ensure climate finance is appropriately utilized and to track impact. While the specifics of what a climate finance tracking system looks like depends on the context in which it’s established, such a system can include tools like DG’s Aid Management Platform, an open-source tool that facilitates the monitoring of development activities in order to enhance aid effectiveness by allowing stakeholders to track activities from planning to implementation, and GIZ’s TruBudget, a collaborative and secured platform to track and coordinate the implementation of donor-funded investment projects. (Learn more about these tools and climate finance here.)
However, in order for any tools in a climate finance tracking system to be effective, the context in which the system is being established will ideally have many components, including digital infrastructure, human and computational capacity, data and accounting literacy, and complementary institutions and policies to ensure climate data is usable and useful for decision-making. Therefore, significant resources are needed in order for a climate finance tracking system to be effectively implemented. Here is an overview of five insights DG has identified on how best to create a climate finance tracking system.
Five Insights in Developing a Climate Finance Tracking System
- Creating a climate finance tracking system is not only a technical endeavor but also a political one. Any type of data, including climate finance data, is inherently political. Therefore, in order to build a viable and sustainable climate finance tracking system, stakeholders must first and foremost approach this as a political task.
- Building a climate finance tracking system will involve reaching consensus on how to standardize definitions, measurements, methods of reporting, and other data requirements. In the instance of climate finance tracking, the list of stakeholders to be included in this endeavor is long, as public, private and civil society stakeholders may express different needs and preferences when it comes to tracking and reporting data.
- Building a climate finance tracking system at the national level requires (a) a concerted investment of time and resources to create accessible and usable technical systems that capture critical information as well as (b) the human capacity and (c) political willingness to sustain it.
- Ensure different budgetary tools are interoperable (i.e., data can be shared seamlessly between systems) in order to avoid data silos and to facilitate the exchange of information between aid, procurement, budget, and other data systems in the climate finance tracking system.
- Creating climate finance tracking systems requires planning from the subnational to the transnational levels. Subnational political will and capacity will have to be carefully cultivated as this is where most money is spent. At the national level, efforts to build robust climate finance tracking systems will also need to coordinate with efforts at transnational levels, especially to empower the tracking of regional resources and spillover effects of national programs.
Dive deeper into these insights and learn more about climate finance tracking and climate finance tracking systems in the white paper.
