How do nationally and locally managed climate funds compare in creating impact on the ground? Guest blogger John Nyangena weighs up the pros and cons of each approach.
Mechanisms such as the Green Climate Fund (GCF) were set up to enable climate vulnerable countries access to finance for low carbon climate resilient development. But the criteria for accessing these funds are highly stringent and to stand any chance of success, projects must demonstrate clear potential for creating real impact on the ground.
This raises the question: what are the most effective ways to channel climate funds to the local level?
This is particularly relevant for Kenya where four county governments are developing County Climate Change Fund (CCCF) legislation to coordinate and mobilise climate finance. The CCCF approach enables local communities to directly access climate finance from international and domestic sources.
Financing for community development initiatives falls under two main approaches - locally managed and nationally managed funds.
Recent research commissioned by IIED compared how funds under these two approaches are disbursed; it used the Isiolo County Climate Change Fund (ICCCF) and the Community Development Trust Fund (CDTF) as case studies.
The ICCCF is being piloted by the Adaptation Consortium under the National Drought Management Authority and with finance from UKaid. It supports 'public good type' investments promoting climate resilience and good governance of natural resources.
The fund management is devolved to community level through publicly-appointed Ward Adaptation Planning Committees (WAPCs), with the government-run County Adaptation Planning Committee (CAPC) providing technical support and oversight.
The CAPC allocates each ward a budget and communities prioritise projects with the help of WAPCs, and then submit to the CAPC for review. WAPCs identify a service provider that receives funds from the funding agent to execute the project. IIED acts as a funding agent under a temporary arrangement awaiting the enactment of ICCCF, currently sitting with the county assembly.
The Community Development Trust Fund (CDTF) started as a joint social development programme between the Government of Kenya and the European Union to support sustainable community-based development projects, focusing particularly on vulnerable groups.
CDTF is managed nationally by a board of trustees appointed by government with a project management unit (PMU) responsible for the fund's day-to-day running. Only community based organisations with three years' experience of implementing similar projects are eligible to submit proposals. A project implementation committee (PIC) executes the projects, with funds transferred directly from CDTF.
CDTFs and ICCCF supported projects in the same wards; this provides an excellent opportunity for comparison.
Research findings: highlights
Responsive to community needs
To affect real change at the local level and effectively safeguard ecosystems, it is crucial that community investments are carefully targeted. With ICCCF, the WAPC-proposed projects are based on resilience assessments that identify the community's greatest needs. This ensures the local context is captured when planning and designing the projects.
With the CDTF, proposals come via a call from the fund, while the board of trustees and county government technical officers ensure proposals are relevant. Having only national coverage makes targeting community needs at local level a challenge under CDTF.
Speed of disbursement
In both cases, communicating with project stakeholders outside the county slowed the approval process. However, ICCCF proposals secured funding twice as quickly (an average of five months) than CDTF.
There are many more stages in the CDTF approval process and communication between project proponents and the CDTF headquarters takes time. CDTF's PMU also requires background information from the field visit to be verified, making the approval process longer still.
Challenges linked to organisational setup
PICs are not legally recognised within the government system. Therefore, in the case of CDTF, the government doesn't track disbursed funds, meaning efforts could be duplicated. WAPCs and the CAPC are interim structures expected to be formalised within the county system by the enactment of ICCCF.
ICCCF ecosystem-based proposals are decided by a traditional elders system (Dedha) responsible for planning regional livestock grazing patterns, but this has been gradually undermined over time by central government administrative structures. Having traditional systems such as Dedha in place strengthens community institutions; failing to legally recognise them can create conflict.
The two funds are monitored differently. Under ICCCF, WAPCs and the CAPC supervise the service provider and, since these institutions are closer to the project site, monitoring is generally effective.
CDTF monitoring relies on PIC monthly reports and irregular site visits by the PMU. Because the PMU is required to cover the entire country, and given the size of the project sites, regular monitoring is more difficult.
Putting funding into action
The level of investment in CDTF was up to 10 times higher than ICCCF, meaning nationally managed funds have greater capacity to muscle resource, bringing greater benefits. These funds can also access a wider pool of technical capacity at the national level to develop and execute projects.
Climate change is of course a global challenge with localised impacts. The research showed how both these approaches, in different ways, can synergistically deliver funds to strengthen the adaptive capacity at local level in line with Kenya's devolved governance system.
John Nyangena (email@example.com) is a policy analyst at the Kenya Institute for Public Policy Research and Analysis