CLIMATE FINANCE OVERVIEW
The World Bank defines climate finance as: “the resources to catalyse the climate-smart transformation of development trajectories by covering the additional cost and risks of climate action, creating an enabling environment and building capacity in support of adaptation and mitigation as well as encouraging research, development, and deployment of new technologies.”11
However, within definitions like these there remains room for multiple interpretations of what differentiates climate finance from more traditional lines of spending, such as spending on environment, water, health and development. This question about the definition of climate finance has complicated efforts to track and account for climate investment, by governments and civil society alike.
During a stakeholder workshop that TI Kenya held in October 2012 as part of its research process, participants recommended that the ‘Rio Markers’ – a set of indicators developed by the Organisation for Economic Co-operation and Development’s (OECD) Development Assistance Committee (DAC) – should be applied in order to define more clearly the scope of climate finance. Doing so requires consideration of donor funding objectives as well as, at the recipient end, the project objectives as set out in project documentation.12 The research team encountered significant challenges in gaining access to these documents, however, which made this approach impossible.
Given constraints on access to information, TI Kenya opted instead for a broader approach to the classification of climate finance at the national level, including in its mapping exercise all funds that are reported as climate finance in the public domain. This means that programmes may be included that, although closely related to climate change, could be considered as ‘business as usual’ public expenditure. Some funds included in this report might also be counted twice – if a project or programme appears in the national budget without indication that it was funded from an international source.
This challenge in identifying and measuring the Kenyan government’s climate finance expenditure represented in itself a significant finding from this research process. It has added strength to the argument that, if the Kenyan people and the international community want to effectively measure and assess climate change expenditure, the development of a proper budget classification system will be essential.