Bangladesh Climate Public Expenditure and Institutional Review

Abstract

Bangladesh has a long history of, and substantial expertise in, managing response to Climate Variability and Natural Disasters pre-dating the emergence of Climate Change as a policy arena. Climate Change response in Bangladesh is a complex, multi-sector, multi-stakeholder undertaking that budgets and spends around US$1 billion per year through Government and Donor funding. In 2012 the General Economics Division (GED) of the Planning Commission, sponsored by the UNDP and UNEP, commissioned and undertook a Climate Public Expenditure and Institutional Review (CPEIR) with the objective of analysing this spend, its policy and strategic drivers, the institutions delivering it and sought ways how this could be managed more effectively. The study revealed the key conclusions based on the review and identified that the government is the main funder of the Public Sector response to Climate Change and climate sensitive activity with around 75 % of funding coming from domestic sources on an annual basis. The government response is firmly embedded in existing institutions and policy frameworks and there are a number of new mechanisms being established by both Donors and Government which have yet to deliver substantial numbers and values of expenditure. There is evidence of that Climate Change Strategy has not fully penetrated the sector policy drivers of budget execution resulting in a need for improved co-­ordination and profile mechanisms at Central Ministry level. There is an extraordinarily diverse range of administrative agencies involved in budget execution of climate sensitive expenditure. There is evidence that duplication and omission of activity are significant risks to the optimisation of climate response due to the diversity of institutions involved. A “gearing effect” may be evident within funding climate change actions in Bangladesh. It was noted that an increase of 11 % in donor commitments and an 18 % increase in Government commitments occurred simultaneously. It may be that there is causation between the two. The CPEIR study recommended that the way forward in Bangladesh is to introduce greater rationality in establishing the economic position and impacts of government expenditure through a macro-economic study with a view to identifying private sector partnerships in climate response, establish medium and long term costed response plans for incorporation into budgets, clarify intuitional mandates with a view to developing appropriate specialisation in climate response, and strengthen existing (and beleaguered) government co-ordination, resource allocation, monitoring and classification arrangements in Planning and Finance.

Bangladesh has a long history of, and substantial expertise in, managing response to Climate Variability and Natural Disasters pre-dating the emergence of Climate Change as a policy arena. Climate Change response in Bangladesh is a complex, multi-sector, multi-stakeholder undertaking that budgets and spends around US$1 billion per year through Government and Donor funding. In 2012 the General Economics Division (GED) of the Planning Commission, sponsored by the UNDP and UNEP, commissioned and undertook a Climate Public Expenditure and Institutional Review (CPEIR) with the objective of analysing this spend, its policy and strategic drivers, the institutions delivering it and sought ways how this could be managed more effectively. The study revealed the key conclusions based on the review and identified that the government is the main funder of the Public Sector response to Climate Change and climate sensitive activity with around 75 % of funding coming from domestic sources on an annual basis. The government response is firmly embedded in existing institutions and policy frameworks and there are a number of new mechanisms being established by both Donors and Government which have yet to deliver substantial numbers and values of expenditure. There is evidence of that Climate Change Strategy has not fully penetrated the sector policy drivers of budget execution resulting in a need for improved co-­ordination and profile mechanisms at Central Ministry level. There is an extraordinarily diverse range of administrative agencies involved in budget execution of climate sensitive expenditure. There is evidence that duplication and omission of activity are significant risks to the optimisation of climate response due to the diversity of institutions involved. A “gearing effect” may be evident within funding climate change actions in Bangladesh. It was noted that an increase of 11 % in donor commitments and an 18 % increase in Government commitments occurred simultaneously. It may be that there is causation between the two. The CPEIR study recommended that the way forward in Bangladesh is to introduce greater rationality in establishing the economic position and impacts of government expenditure through a macro-economic study with a view to identifying private sector partnerships in climate response, establish medium and long term costed response plans for incorporation into budgets, clarify intuitional mandates with a view to developing appropriate specialisation in climate response, and strengthen existing (and beleaguered) government co-ordination, resource allocation, monitoring and classification arrangements in Planning and Finance.