i

Feasibility assessment for

Fiji National Climate Fund

Final Report

16 November 2016

Author: Jessica Troni

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Executive Summary

The objective of this report is to assess the feasibility of establishing a Fiji National Climate Fund

considering issues such as capitalisation; legal, policy and planning frameworks and institutional

feasibility. National Climate Funds (NCF) are nationally driven and nationally-owned instruments to

help countries collect climate finance from a variety of sources, coordinate them, blend them together

and account for them.

Setting up a new institution or instrument is only worth the costs if it solves problems in the baseline

situation and does not create new problems, or at least that the positives should outweigh any

negatives. The problems to be solved by the establishment of an NCF were scoped out during the

preparation of this report to be as follows:

1. Low amounts of financing for resilience building initiatives and for low carbon development;

2. Project-based aid landscape which is a slow disbursement modality and undermines country

planning systems and policy leadership by Government ministries;

3. Low absorptive capacity in government;

4. Weak sustainability of projects,

5. Lack of integrated sector planning leading to unresolved environment/development problems

A range of risks in establishing an NCF were also highlighted during the preparation of this report

such as increased bureaucracy, costs, delays and lack of transparency in decision-making.

At a technical level, establishing an NCF in Fiji is feasible: the country has an enabling Financial

Management Act through which Government of Fiji could quickly establish the basic legal and

financial framework needed for the Fund; financial management and performance tracking systems

are in place, as well as some enabling legislation, and experience in running investment Funds.

There are also on-going reform processes on financial management and legal framework which could

benefit the establishment of an NCF.

There are also many weaknesses. The lack of integrated planning between ministries is a serious

constraint to designing and implementing adaptation strategies, given the linkages between climate,

energy, food and agriculture, water, forests, health and urban planning to name but a few. The links

between environmental degradation, climate change resilience and sustainable development are

reflected in the recommendations of numerous natural resource-based national strategies but there

appears to be a lack of political will across the government to implement the recommendations within

ministry spending plans and budgets. There has been limited mainstreaming of climate change policy

into sector plans and budgets in Fiji. The 2012 National Climate Change Policy scoped out around 72

priority actions across seven priority objectives but the action plan has not been implemented

according to the mid-term review of the Policy.

What is critically lacking for the establishment of the NCF is first and foremost two things: i) political

leadership for this idea and ii) evidence-based and costed adaptation plans and targets to

complement the existing national greenhouse gas emissions mitigation targets. The Ministry of

Economy needs to champion the structure and operational modalities of the NCF.

On capitalisation of the NCF, public finance alone cannot pay for the transition to a low carbon

resilient future. Given the scale of climate change financing needs, potential sources of financing

should comprise domestic tax revenues, private investment, development cooperation from bilateral

government agencies and multilateral institutions and a combination of public-private partnerships. A

key part of designing the NCF should be a consideration of how private sector finance could be

woven into a financing strategy for adaptation and greenhouse gas emissions mitigation. Investing tax

finance in the Fund would both signal government intention and commitment to the fund and build

trust among partners. These funds could go further if the funds could leverage Ministry budgets and a

coordinated policy process were initiated to ensure that all investments contributed to climate change

resilience. Carbon revenues from investments into greenhouse gas emission offsets could be another

source of finance.

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The two main design options are a fund held by government or a bank. Both could direct funding to a

set of agreed priorities within or outside the regular government planning framework of the country.

Both could attract international private sector financing, The bank could, in addition engage with the

domestic private sector in a wider range of financial strategies in order to promote GHG emissions

reduction and climate resilience. This design option is most likely to solve the baseline problems

without creating new ones. For climate change responses within the public sector, the feasibility

assessment argues that it would be more effective and more efficient to attract climate change

financing through country planning and budgeting systems than through a projects approach which

would be unlikely to solve any of the baseline problems.

Based on the assessment of design options, the structure proposed for the NCF in this report has

been identified to have the greatest chance of attracting funds, to distribute funds in an equitable and

rational manner and to lead to effective results on the ground. A two pronged strategy is

recommended on the delivery strategy.

• 1st prong: Bank facilitated NCF for climate change responses in private sector, civil

society and academia. The NCF would be located as a Trust Fund in a bank that is able to

design financial products for adaptation and GHG mitigation technologies for private

individuals and entities. In addition, a project modality should be established that can engage

third parties directly, through a small or medium grants window in order to promote innovate

research and results on the ground.

• 2nd prong: Government planning systems to facilitate climate change responses: Work

towards a hypothecated budget support mechanism that can be adopted within a 10 year time

period. This is in order to move away from the project modality that is currently prevalent in

Fiji to a country systems approach that is able to absorb larger scale flows and to fund multi-

year continuity of investments. Country systems can be used to track finance and

performance. Taking this approach would not constitute a Fund (unless absorptive capacity

was low and funding amounts high) as much as a facility. This facility could strengthen the

role of Ministry of Economy, through the Climate Change Unit, in the coordination of climate

change policy implementation as well as in strengthening the technical aspects of budget

preparation. A key part of this programme would be to establish a research programme to

target the most urgent gaps in the evidence base in order to inform adaptation plans.

An action plan containing 14 actions has been developed in this report which together adds up to a

three year work plan to get Fiji to the point where it could establish an NCF and a National Climate

Facility for support to ministries. The activities for the establishment of the NCF are grouped into three

distinct categories: i) establishing the national climate change targets and policy pathways ii)

developing the legal, policy and institutional problem analysis and action plan to address the gaps iii)

developing the operational strategy for the NCF. With no delays, investment flows for climate change

priorities could being from year 3 onwards. The tentative budget attached to this Action Plan is

US$1.5 million.

The actions concerning the second prong of this strategy relating to government planning systems

(the National Climate Facility) should be delivered in one geographical area comprising a set of

Districts relevant to the effective functioning of a watershed. The timeframe for this part of the

programme would be eight years working on the pilot, area-based approach with another two years

dedicated to scaling up to the sector and country level. A great many of the actions contained in the

Green Growth Framework for Fiji could be picked up in the proposed Action Plan; these are listed in

Section 6 of the report. The cost estimates for establishing the NCF provided here are tentative. The

exact details of the design of each of these measures with a more detailed costing should be carried

out in a detailed design phase of this Action Plan should this work progress.

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Contents Executive Summary .............................................................................................................................. ii Abbreviations and Acronyms ............................................................................................................. vi 1. Introduction ....................................................................................................................................... 1

1.1 Overview of the report ................................................................................................................ 1 1.2 Country context ........................................................................................................................... 1 1.3 Current spending on resilience ................................................................................................. 2 1.4 Trust Funds in Fiji ....................................................................................................................... 3 1.5. Experience with national climate Funds globally ................................................................... 4

2. What does climate change resilience mean? ................................................................................ 9 2.1 System analysis – the evidence base in Fiji ............................................................................ 9

2.3.1 Vulnerability to baseline climate events ................................................................................. 9 2.3.2 Observed climate change .................................................................................................... 10 2.3.3 Climate change projections .................................................................................................. 11 2.3.4 Environment-development baseline dynamics .................................................................... 12

3. Key elements in place to support the NCF. .................................................................................. 16 3.2 Legislative, policy and strategy framework ........................................................................... 17

3.2.1 Legislation ............................................................................................................................ 17 3.2.2 Policies and strategies ......................................................................................................... 19 3.2.3 Local government planning .................................................................................................. 26 3.2.4 Coordination on climate change policy ................................................................................ 27

3.2 Delivery effectiveness and challenges ................................................................................... 27 3.2.1 Public Financial management .............................................................................................. 28 3.2.2 Performance management .................................................................................................. 30 3.2.3 Human capacity ................................................................................................................... 32 4.2.4 Environmental and social safeguards .................................................................................. 33

4. Financing strategy for the NCF ..................................................................................................... 33 4.1 The importance of the enabling environment ........................................................................ 40 4.2 Climate change investment plans and costs ......................................................................... 42

4.2.1 Adaptation plans in Fiji and cost .......................................................................................... 42 4.2.2. Greenhouse gas emission mitigation plans and cost ......................................................... 45

5 Feasibility assessment .................................................................................................................... 46 5.1 Assessment framework ............................................................................................................ 46 5.2 Main design options ................................................................................................................. 47 5.3 Recommended design .............................................................................................................. 53

5.3.1. Monitoring, evaluation and learning .................................................................................... 54 6. Action plan for establishing the NCF ............................................................................................ 55

References ........................................................................................................................................... 61

Annex 1 Details of consultation mission for the preparation of this report ................................. 64

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TABLES

Table 1 Annual climate change and DRM assistance since 2008 (US$ million) .................................... 3 Table 2 Examples of Trust Funds operating in Fiji ................................................................................. 3 Table 3 Main characteristics of selected number of national climate change funds............................... 6 Table 4 Legislative, policy and strategy framework relevant to climate change in Fiji ......................... 21 Table 5 Comparison of adaptation measures identified for Fiji and Ministry of Agriculture performance

targets ................................................................................................................................................... 23 Table 6 Complementarity between baseline priorities in water, biodiversity and coastal zone and

adaptation options ................................................................................................................................. 25 Table 7 Correlation between Public Financial Management Performance and NIE accreditation

requirements ......................................................................................................................................... 29 Table 8 Categories of measures to manage climate change and the financing framework ................. 35 Table 9 Critical timeline of events for NIE accreditation in Fiji .............................................................. 37 Table 10 Policy measures to leverage private sector investment in Fiji proposed in the Green Growth

framework.............................................................................................................................................. 41 Table 11 Projected Cost of Recovery Programmes by Recovery Priority – F$ million......................... 45 Table 12 Main benefits expected from the NCF ................................................................................... 46 Table 13 Main risks from the establishment of an NCF ........................................................................ 46 Table 14 Typology of NCF design consequences ................................................................................ 47 Table 15 Action plan for establishing the NCF...................................................................................... 58

FIGURES

Figure 1 Environment, economy and climate change system linkages in Fiji ...................................... 13 Figure 2 Universe of private sector climate change investments ......................................................... 39 Figure 3 NCF at the MoE: 2 designs ..................................................................................................... 48 Figure 4 Benefits and risks from the two design options ...................................................................... 49 Figure 5 NCF at a bank; Multiple avenues for supporting investments ................................................ 50 Figure 6 Benefits and risks from the two design options ...................................................................... 51 Figure 7 Sequencing and timing of activities in the Action Plan ........................................................... 60

BOXES

Box 1 The Indonesia Climate Change Trust Fund: How well has it worked? ........................................ 5 Box 2 The private sector investment picture for climate change .......................................................... 34 Box 3 The Climate Bonds Initiative ....................................................................................................... 38 Box 4 Public funds unlock private finance: a cast study of adaptation in Uganda ................................ 40 Box 5 Global investor statement on climate change, 2014 ................................................................... 42 Box 6 Case study: Details of cost benefit analysis of adaptation options for Lami Town ..................... 44

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Abbreviations and Acronyms

AG Auditor General CCA Climate change adaptation CCU Climate Change Unit CSMRU Civil Service Management Reform Unit DFI Development Finance Institution DoE Department of Environment DRM Disaster Risk Management DRR Disaster Risk Reduction EC European Commission EIA Environmental Impact Assessment EMA Environmental Management Act GCF Green Climate Fund GoF Government of Fiji FDB Fiji Development Bank FDI Foreign Direct Investment FMA Financial Management Act FMIS Financial Management Information System FMR Financial Management Reform FNPF Fiji National Provident Fund GEF Global Environment Facility GHG Greenhouse Gases GW Ground Water INDC Intended Nationally Determined Contribution KPI Key Performance Indicators IWRM Integrated Water Resources Management LWRM Land and Water Resources Management M&E Monitoring and Evaluation MoA Ministry of Agriculture MoE Ministry of Economy MW Megawatt NCF National Climate Fund NGO Non-Governmental Organisations IPCC Intergovernmental Panel on Climate Change NCCAS National Climate Change Adaptation Strategy NCCP National Climate Change Policy REDD+ Reducing Emissions for Forest Degradation and Deforestation RSSED Roadmap for Sustainable Socio-Economic Development PEFA Public Expenditure and Financial Accountability Assessment PFM Public Financial Management SLR Sea Level Rise TC Tropical Cyclone UNDP United Nations Development Programme UNEP United Nations Environment Programme UNFCCC United Nations Framework Convention on Climate Change WRI World Resources Institute

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1. Introduction

The objective of this report is to assess the feasibility of establishing a Fiji National Climate Fund

considering issues such as capitalisation; legal, policy and planning frameworks and institutional

feasibility. The report has been prepared on the basis of 30 bilateral interviews with more than 70

informants and a stakeholder consultation workshop comprising 23 participants organised in the

period 6-14 June, as well as an extensive literature review.

The National Climate Funds (NCF) are nationally driven and nationally-owned instruments to help

countries collect climate finance from a variety of sources, coordinate them, blend them together and

account for them. Fiji’s Climate Public Expenditure and Institutional Review (CPEIR) recommended

that the country undertake a feasibility study for a Fiji NCF. This work is supported by United Nations

Development Programme (UNDP) within the context of the GCF readiness programme funded by

Government of Germany to prepare Fiji for direct access of the Green Climate Fund. The GCF was

established as an operating entity of the United Nations Framework Convention for Climate Change

(UNFCCC) financial mechanism and is expected to become the main global fund for financing climate

change mitigation and adaptation measures. The German Government, through the Federal Ministry

for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB), has engaged the

United Nations Environment Programme (UNEP), UNDP and the World Resources Institute (WRI)

(“the Programme partners” or “the partners”) to develop a GCF Readiness Programme in nine

countries, including Fiji1.

1.1 Overview of the report Setting up a new institution or instrument is only worth the costs if it solves problems in the baseline

situation and does not create new problems, or at least that the positives should outweigh any

negatives. The first task is to take a close look at what the problems in accessing and implementing

climate finance are in the baseline situation. The second task is to look at the extent to which an NCF

in Fiji could improve the baseline situation. This depends on whether the system elements are in

place to support it and the design of the entity/instrument. Important system elements comprise the

legal, policy and strategic framework for climate change investments, transparent and accountable

financial management and performance tracking systems, and how well the implementation pathways

work. Cross cutting to these system elements is government capacity to produce integrated plans and

to guide implementation; this includes coordination between vertical levels of government and

between government and the non-State sector. This feasibility assessment looks at all of these

issues.

The feasibility assessment begins with introductory Section 1 that provides the background to the

design of the NCF in Fiji for example the Fiji experience in using Trust Fund instruments, current

spending on climate change responses in Fiji and a discussion on the experience with Climate Funds

globally for climate change. Section 2 sets out what we mean by climate change resilience and we

present what we know of the status of climate change resilience in Fiji.

Section 3 discusses the baseline institutional context for attracting and implementing climate change

adaptation and mitigation investment and the key institutional elements in place to support a NCF.

Section 4 discusses the financing strategy for the NCF which conditions the design of it. Section 5

presents the feasibility assessment and the recommended design for an NCF that minimises the risks

and maximises the potential added value of an NCF. Section 6 builds on the preceding sections

analysis of needs and gaps to present an action plan for establishing the NCF.

1.2 Country context Fiji is an archipelago of 332 islands (of which approximately 110 are inhabited), spread over a land

area of approximately 18,300km2 and a geographic area of almost 50,000km2. The country’s

population of approximately 865,0002 resides primarily on the two largest islands, Viti Levu and

1 The other countries being Benin, Colombia, El Salvador, Ghana, Kenya, Nepal, Philippines, Uzbekistan. 2 Population and Labour Force Estimates, 2014.

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Vanua Levu. Fiji has historically served as a regional hub for banking services and communications,

as well as for flights and shipping to other Pacific islands. Fiji is a middle income country with a gross

national income of US$4,870 per capita (World Bank 2014). Economic growth has averaged 3.2

percent over the last five years (World Bank, 2016) with stronger growth in the last 3 years3. The

economy is primarily based on services and tourism, but the majority of the workforce is employed in

agriculture. Tourism is the largest foreign exchange earner over the years. Sugar cane and non-sugar

agriculture are being supported for expansion in the government’s export promotion strategy.

Fiji faces some of the geographic and structural challenges common to other smaller Pacific island

countries, including vulnerability to tropical cyclones (TC) and resultant disasters. Remoteness, in

conjunction with internal dispersion, imposes additional costs trade and transportation-related costs.

These same factors also increase the cost and complexity of providing public services and fulfilling

some basic government functions.

While the country has achieved broad coverage in the provision of basic social services (e.g.

enrolment in primary education is almost universal), 35 percent of Fijians live below the basic needs

poverty line.4 44 percent of the rural population live in poverty, compared to 26 percent of the urban

population. Poverty is a multifaceted issue in Fiji, related to lack of access to a fully nutritional diet,

clean drinking water, improved sanitation, quality education and health care, and employment or

income earning opportunities. Climate change will have cross-cutting impacts and affect these

poverty indices across the board.

The return to Parliamentary democracy after successful elections in 2014 has boosted investor

confidence and contributed to foreign direct investment (FDI). FDI flows stood at US$278.9 million in

2014 (World Bank, 2016). Still, the World Bank economic freedom score, a composite index

measuring rule of law, government size, regulatory efficiency and open markets, is under the world

average (World Bank, 2016). The country has a trade deficit of US$126 million over exports of US$1

million and a net deficit of US$285.8 million (MoE, 2016; MoE, 2016b). 60 percent of expenditures in

2016 are operating and 40 percent are capital expenditures. Exports are declining and imports are

rising due to demand from the tourism sector and rising food and fuel prices, and the trade deficit is

widening. Import substitution and export promotion in sugar and agriculture is an important

development strategy for the GoF (MoNP, 2009).

1.3 Current spending on resilience As a share of Gross Domestic Product (GDP), Fiji’s total spending on climate change and Disaster

Risk Management (DRM) is estimated at around 1.26 percent and 1.08 percent of GDP respectively

in 2014. Government spending as a share of total expenditure on climate change and DRM is 3.6

percent and 3.1 percent (recurrent and capital costs) respectively over the same period (MoE, 2015).

This is equivalent to US$104.1 million and US$89.4 million for climate change and DRM respectively

in 2014. Most expenditures are for adaptation in the primary industries and on environmental projects.

Fiji’s reliance on donor funding is low with only 0.7 percent of its revenue coming from cash grants (US$ 9.5

million in 2014). Aid in-kind makes up 90 percent of total Overseas Development Assistance in Fiji (US94

million in 2014). Total spending on Disaster Risk Reduction (DRR), environmental protection and

mitigation in Fiji shows a big variation from year to year, probably reflecting the response and

recovery operations following a disaster, e.g. TC Tomas in 2010, floods in March 2012, TC Evans in

December 2012, TC Winston in February 2016, see Table 1 for details. Most climate change

adaptation donor initiatives focused on coastal and water management.

Most cooperation in Fiji is delivered as projects, some of it directly to communities through Non-

Government Organisations (NGOs) to communities which the government is unable to track. The

result is that national planning system have been largely bypassed. Poor regular reporting to

government by donors is also reported (MoE, 2015). As a result of this, development efforts are

uncoordinated, the benefits of the investments are unquantified and control of the budgets is in in the

3 Ministry of Economy budget speech reports the economy as having expanded 5.3 percent in 2014 and 4.7 percent in 2013 with the recent exercise of rebasing GDP to the year 2011. 4 Data from the 2013/2014 Household Income and Expenditure Survey.

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hands of donors. In addition, the ease of doing business for donors, e.g. in agreeing partnership

agreements, is onerous by some accounts, with delays of several months experienced at the Solicitor

General’s Office and at the MoE. The result is that getting funds to where it is needed the most for

climate change resilience is a slow process.

Table 1 Annual climate change and DRM assistance since 2008 (US$ million)

Three bilateral development partners have invested in the GCF and expect to see funding flows to the

Pacific region. At least one of these agencies is tasked for scanning whether such funds do indeed

reach the region. They indicated support of initiatives that facilitated greater draw down of funds to

the region from the GCF. It was noted that the GCF rules and potential windows for engagement are

in process of being developed and there was an opportunity for countries, through the GCF Board, to

influence how these rules develop.

1.4 Trust Funds in Fiji A number of trust funds are operating in Fiji. Table 2 summarises the main characteristics of these

Trust Funds. These experiences show that capacity and experience in managing Trust Funds is

present in Fiji.

Table 2 Examples of Trust Funds operating in Fiji

Fund Fund manager

Size and source of funding

Financing provided

Supports what Who implements

Sustainable Energy Financing Facility (SEFF)

Fiji Development Bank

World Bank 50 percent partial guarantee on the principle loan amount.

SEFF financing: FDB source. F$22.38 (US$11 m)

Loans or equity

Renewable energy and energy efficiency technologies

Private businesses

Global Fund for AIDS, TB & malaria

Ministry of Health

US$ 4 million grant

Public-private partnership/financial institution

Grants Prevention, diagnosis & treatment.

Public, private and NGO care providers

Fiji National Provident Fund (FNPF)

Executive management team

F$4.9 billion (US$ 2.35 million) in

assets and 403,000 members.

Pension contributions

Pensions Pensions -

iTaukei Trust Fund

Management team

Income from shares, debt notes and properties.

US$1 million

(2012)

Grants

2008 2009 2010 2011 2012 2013 2014 2016

0.589 1 8.684 4.235 24 15.153 7.592 14.369

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The main differences between the funds in indicated in Table 2 and a potential NCF is threefold:

1. the size of the existing Trust Funds compared with the potential needs of the NCF which

could be two or more order of magnitudes bigger;

2. the focus of the existing Funds, which are currently mostly single issue, e.g. low carbon

technologies generate direct GHG emissions mitigation results; whereas resilience to climate

change requires cross-sectoral cooperation between ministries.

3. Climate change is a dynamic risk, so learning and feedback of performance information into

plans and policies will be needed is an iterative planning process. Not only is climate change

a dynamic risk, but the socio-economic baseline is changing (population growth, expectations,

rising living standards, technology breakthroughs etc.), so the interaction of climate change

with development processes will be continually changing.

1.5. Experience with national climate Funds globally A NCF can be described as a place to pool funds and provide a mechanism for directing them

according to agreed climate change priorities. Funds can be structured as endowments, sinking

funds and revolving funds. An endowment fund is designed to last in perpetuity, preserving its capital

and using only the interest or return on investment to finance activities. A sinking fund is designed to

disburse a proportion of its capital each year over a defined period of time until it sinks to zero. A

revolving fund is replenished or augmented on a regular basis, usually through fees, taxes or levies

collected by government. In some countries, the fund has been set up as a Trust – a legal

arrangement whereby a trustee legally owns and manages financial resources exclusively for a

designated purposes (Bladon et al, 2014).

Over the last decade, a number of climate funds have been set up around the world to finance

investments that deliver climate change objectives. Common threads run through different climate

change Fund designs. They are usually sinking funds or revolving funds. Many offer loans as well as

grants; many are funded with domestic renewable resources (taxes) and they all link the funding to

projects, similar to the Global Environment Facility (GEF). The GEF was set up to fund the

incremental costs of global environmental benefits and the climate change funds entrusted to it by the

UNFCCC were to be focused on the costs of complementary and additional actions needed due to

climate change, with emphasis on mainstreaming of climate change into regular development

processes. These operational conditions were put into place to avoid duplicating or undermining

regular development processes. In practice it is difficult to separate out the climate change element

from the baseline dynamics, and the adaptation solutions implemented tend to address the system

dynamics as a whole. Table 1 provides details of climate change Trust Funds which have been set up

in (chronological order) Thailand, China, Benin, Bangladesh, Brazil and Tonga. There is very little

information on how well these climate funds have worked. One case study review of the Indonesian

experience is presented in Box 1.

In contrast, many Conservation Trust funds are set up as endowment funds with capitalisation of

between US$2.5 and US$17 million aimed at financing projects (Bladon et al,2014). The Tuvalu Trust

Fund, established in 1987, is an example of an endowment fund linked to a sinking fund which is used

as a budget support mechanism and widely viewed as successful. The initial capitalisation of Fund

was US$20 million equivalent including a contribution by the Tuvalu Government of US$1.2m. The

Fund grew to US$93 million (eq.) by March 2012. Further contributions were made (including by

Tuvalu Government of US$20 million). The Capital fund has never been drawn down in 20 years of

operation as of 2012.

In a review of Conservation Trust Funds, the following factors of success were noted:

1. Diverse sources of financing are critical for financial sustainability and to minimise the risks of

reliance on a single source of financing;

2. The Fund should nurture strategic relationships with a variety of stakeholders which can

provide mentorship, technical assistance and financial advice;

3. Independence is desirable but government support is essential;

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4. The Fund Board should have at least one member with expertise in the fields of finance,

business or economics. External assistance is also essential either through a specialised

advisory committee or through partners to the Fund.

Box 1 The Indonesia Climate Change Trust Fund: How well has it worked?

The Indonesia Climate Change Trust Fund (ICCTF) was the first national Trust Fund set up to

climate change objectives. It aims to enhance national ownership and to develop a structure to

access and channel grants in response to climate change. In practice its operationalisation has

been slow and its capitalisation has been low (US$11.4 million) relative to the hundreds of millions

of dollars of concessional donor support for climate-related purposes in Indonesia and the

estimated billions of US dollars it needs for GHG mitigation,. It was supposed to help strengthen

coordination and coherence in the country but it is now one of many actors in an increasingly

complex financing environment in the country.

Inefficiency of decision-making has been noted by many stakeholders, for example, the need for

senior ministry staff to sign off on decisions. The ICCTF project cycle takes about 13 weeks from

the time a call for proposals is issued to the point where the project is approved. In practice

approvals may take longer because of the approval process involving many stakeholders involved

in the Board and technical committee. The ability of the Fund to work well requires an

improvement in the capacity of the Secretariat which has been hampered by stretched resources

and high staff turnover. Steps have been taken to strength the Secretariat through recruitment of

Executive Directors and international experts in fund management. As of December 2013, 23.3

percent of total disbursed funds were spent on management costs.

A great deal of effort has been invested in fiduciary management arrangements. As the Fund

transitions into a third phase where it expects to finance larger programmes, there is a need for

greater public reporting and transparency of financial management systems, more robust risk

management systems and environmental and social safeguards.

Reference: ODI working paper, 2014

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Table 3 Main characteristics of selected number of national climate change funds

CC Fund Legal status and governance

Year established

Sources of revenue

Organisations eligible for support

Areas funded Number of Board Members

Permanent staff members

Committees

Thailand Energy Efficiency technologies

None. The Fund is an instrument designed to implement the Energy Conservation Act

2003 Petroleum tax revenues for the first 10 years. Participating banks are now investing their own funds.

Buildings, factories, energy service companies and project developments. Loans made available through 11 participating banks. Credit lines of US$2.5 million to US$10 million to each participating bank.

Low interest loans to banks which finance energy efficiency projects.

None. Department of Alternative Energy Development and Efficiency is responsible for implementation of the Act.

4 plus 25 part-time experts with an average work load of 10 hours per month.

China CDM fund

Government entity.

2007 Funded through share of CDM proceeds, investments, and grants. US$ 1.5 billion from 7 million tonnes of CO2 eq reduction (2012)

Line ministries and decentralised government

Grants,

investments

(equity), loans,

financing

guarantees.

No information.

No information. CDM Fund Management Centre (MoE): develops rules and regulations for the fund’s operation, makes investments, approves smaller investment projects; supervises and manages projects and reports to the Board.

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Benin National Fund for Environment and Climate

Legal Decree 2008 Ministry of Economy pays for operational costs. 50 percent of eco tax revenues (c. US$900,000k in 2011); fines from pollution control and government grants. Grants from development partners.

Public sector, private sector and CSOs.

Grant funding for small projects (c10k – 25k) to 90 percent of amount; medium projects (25k – 85k) to 75 percent of amount; and large projects (86k+) to 50 percent of amount.

7 Mostly Government.

7+ Executive Board: mandatory advisory group.

Indonesia Climate Change Fund (ICCTF)

2 Ministerial Decrees plus Presidential Regulations Interim trustee: UNDP Trustee: Bank Mandiri

2009 GoI: 1.27 million in 2015. Initiation capitalisation of US$11.45 million donor funds + $4.85 m in technical assistance support. Intention is to access private sector funding.

Line ministries, NGOs, private sector based on submitted proposals.

Innovation Fund – grants; Transformation Fund – loans 3 funding windows: Energy and Energy Efficiency; Sustainable Forestry & Peat Land Management; Resilience. Capacity development, policy and regulatory reform. Smaller projects (<$50K and larger: $1-2 million.

13 Multi-stakeholder but majority government.

c. 14. Includes Executive Director + 3 Deputy Directors

Technical committee: evaluates project proposals.

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Bangladesh Climate Change Resilience Fund and Action Plan (BCCSAP)

MOUs signed with donors. The Governing Council: sets strategic goals and management aligning the Fund with the BCCSAP Trustee: World Bank

2010 Initial capitalisation of US$100 million from multiple donors. Has reached US$180 million.

10 percent of

funding directed

to NGOs and

CSOs, managed

through a micro-

finance

institution.

Linked to National Climate Change Strategy and Action Plan. Finances resilience measures (biggest project US$19 million) and analytical and advisory projects (biggest project US$650k).

15 Multi-stakeholder but majority government.

No information. Secretariat is located at the Ministry of Environment & Forests and is supported by an extensive team of WB staff.

Management Committee: establishes the work programme and budget allocation, reviews grant requests and endorses reports. Expert panel: provides support on any technical aspect and review of proposals.

Brazil National Fund on Climate Change

Federal law and Federal Decree Trustee: National Bank for Social and Economic Development.

2010 Funded from a tax on profits made in the oil production chain. Other contributions are made from public, private, national and international donors. 2011-2014: 483 million approx Euros.

Multiple avenues, in accordance with national guidelines and an annual implementation plan of resources.

Grants and

loans.

Grants are

managed by

Ministry of

Environment.

Loans are

managed by the

Trustee.

Steering committee comprising federal, state and municipal representatives and CSOs. Steering committee manages, monitors and evaluates the fund

No information.

Tonga Climate Change Trust Fund

Climate Change Trust Fund Bill pursuant to the PFM Act 2002.

2012 Capital investment of US$5 million invested in an endowment fund of US$4 million and an operational Imprest Account of US$1 million.

Community groups, NGOs, government organisation. Govt is eligible only for 25 percent of funds for medium sized projects.

Small-medium grants from US$50K to US$250K for a 30 percent-70 percent funding ratio respectively.

Fund management undertaken by MoE and National Planning. Oversight provided by a Board.

1 Coordinator. No other information.

9

2. What does climate change resilience mean?

Household wellbeing is multi-dimensional and directly linked to human, natural, social, physical and

financial assets and livelihood strategies. Vulnerability to climate change is shaped by many factors

which reflect the absence of such assets such social exclusion, poverty, weak skills and low

education and others. Vulnerability is dynamic: a household vulnerability status can change rapidly if

its underlying stress conditions change. Its sources of resilience to enable shocks to be handled and

livelihoods to be re-built are include skills, relationship networks, physical assets and savings.

Repeated shocks lead to running down of assets with adverse consequences for household wellbeing

that persist often long after the shock has occurred. Coping in this way prevents households from

improving their economic situation and prospects.

The IPCC definition of vulnerability comprises three elements: i) exposure to the risk ii) sensitivity to

the risk and iii) adaptive capacity to be able to manage risks of climate change. The most vulnerable

households are those with assets and livelihoods that are exposed and sensitive to climatic risks and

who have weak adaptive capacity. For example a household may be exposed to sea level rise but

have the financial and technical means to build their house on stilts which will reduce their sensitivity

to the risk or to relocate which will reduce their exposure to the risk.

Climate change alters exposure to the existing risk profiles through changed frequency and intensity

of climate variability and slow on set events such as sea level rise, which change current average

conditions from historical ranges. Sensitivity to climate change will partly depend on the underlying

environmental and developmental conditions. Degraded environments will magnify the effects of

climate change by increasing the sensitivity of the environment and livelihoods in the area. This is a

critical point for the design of the NCF because, as the next section on systems analysis shows, in Fiji

vulnerability to climate change is being caused as much by development processes as the climate

hazard itself.

2.1 System analysis – the evidence base in Fiji The Green Growth Framework for Fiji recognises that the drive for economic and social development

has placed great pressure on the environment arising from changing consumption and production

patterns leading to the over-exploitation and degradation of environmental resources. Other national

strategies note that the process and rate of destruction of Fiji’s natural resources have become a

concern (MoASLR, 2006). The Green Growth Framework for Fiji argues the need for a new

ecosystems-based integrated approach because of the cross- cutting nature of development issues

with the environment. Ecosystem services are not measured and therefore not managed in a way

that benefits society.

The baseline degradation of the ecosystem underpinning economic activity increases the exposure

and sensitivity to climate change. In addition, negative feedback loops are observed. For example, the

total value of damage to environmental assets from TC Winston was estimated at F$233 million of

which 51 percent are damage to coral reefs, 37 percent to native forests and 12 percent to

mangroves. These resources are valuable barriers against storm surges5. Another feedback loop

was observed after TC Mick struck in 2009, which created a lot of debris from damaged trees. These

trees became fuel for indiscriminate fires that were sparked off in the hot and dry month that followed

TC Mick, which would normally have been expected to be wet. The aftermath of the fire events led to

invasive species growth taking place, which itself is more easily burnt the following dry season

resulting in a cycle of aggravating damage. The downstream effects of land degradation and erosion

were siltation and increased flooding (Sue, 2010).

2.3.1 Vulnerability to baseline climate events Even before climate change is factored in, Fiji faces exposure and sensitivity to climate-related risks,

mainly cyclones and flooding which are exacerbated by human factors. On average 1-2 cyclones

affect some part of Fiji every season. A decreasing trend in the number of cyclones and a slight

decreasing trend in cyclone intensity is observed in Fiji over the last 40 years. Between 1983 and

5 The total value of losses for these three environmental assets is approximately F$630 million.5

10

2012 Fiji experienced 106 natural disasters, mostly TCs and flooding. Since 1980, disaster events in

Fiji have resulted in average annual economic damage of around F$35 million and impacted around

40,000 people each year. TC Evan (a Category 4 cyclone) incurred damages and losses of close to

US$195 million primarily in tourism, housing and agriculture and compounded the damage

experienced by communities in Western Viti Levu from widespread flooding in the earlier part of 2012.

Total recovery and reconstruction costs for TC Evan were estimated at $134 million. TC Winston in

2016 caused damages of an estimated US$620 million6 with highest production losses in the

agriculture sector, some 65 percent of total production which will not recover in some cases for five to

10 years. The losses resulting from TC Winston have been estimated to reduce economic growth by

2.5 percent relative to the 2016 pre-cyclone forecast. Close to US$1 billion was estimated as the cost

of recovery and reconstruction. A poverty trap has been observed: disasters make Fiji poorer and

poverty exacerbate the scale of national disasters.

Intense rainfall and localised flooding in wet seasons is common during La Nina events whereas

strong El Nino events bring drought where annual rainfall can be reduced by as much as 30 to 50

percent over most parts of the country. Flooding occurs due to three issues: i) coastal flooding as a

result of storm surges or large waves ii) flash flooding from rapidly rising rivers, especially where

hillsides have been cleared of vegetation and iii) surface flooding where high rainfall pools in low lying

areas. Floods have occurred in Fiji in some catchments at frequencies of 10 years or more.

Recorded floods from the 1950s shows an increasing trend for all rivers in Fiji, though for the major

rivers the increase was small, possibly due to dredging efforts. Data confidence is low. Coastal areas

in Fiji that are flood prone are often affected by a combination of freshwater flooding and sea water

intrusion. Upland catchment degradation, leading to more flash flooding and more extreme high and

low flow events is believed to be a problem is developing certain catchments in the larger islands, e.g.

the Nadi catchment. Local and frequent flooding (frequencies of two years or less) results from

inadequate drainage infrastructure. The impacts of these events have been noted as follows:

Increasing frequency and severity of coastal flooding on large islands with loss of life and

damage to property, resulting from upland catchment degradation and inappropriate

downstream development;

Inland flash floods which have led to loss of life and property;

Storm surges and marine based coastal flooding, leading to erosion, loss of land value and

property damage;

Periodic drought resulting from El Nino which impacts on domestic water supplies and

agriculture in the northern and western parts of the two major islands and affecting the

smaller islands.

Drought of three months or more can severely affect the viability of forests and increase the

risk of forest fires, signalling a negative feedback loop.

The overall impact on small business by major flooding in Nadi in 2009 was estimated to total F$143

million (US$76.5 million) with a further loss of F$7 million (US$3.5 million) to households. The Nadi

Chamber of Commerce reported that 46 small businesses out of 250 closed down due to damages to

their businesses and destruction of stock.

2.3.2 Observed climate change Significant warming trends have been observed over the last 50 years: average annual air

temperature has increased by 1.15o C from 1961 to 2012 (ranging from 1.9oC in the warm season and

1.06oC in the cool season: 1.06). The minimum temperature has increased 0.62C. The overall change

in long-term rainfall trends over the last 50 years is an increase of 7.3 percent with slight decreasing

trend in the wet season and slight increasing trend in the dry season (GoF, 2014) though there is

substantial variation in year to year rainfall, and usually associated with El Nino Southern Oscillation

(ENSO).

Sea level rise of 19 centimetres was experienced globally from 1901 to 2010 but the mean sea level

at the Lautoka Tide gauge is changing at a rate of 4/6mm/year over the 1993-2010 period, which is

6 Loss and damages in productive, social and infrastructure sectors excluding environment sector.

11

far greater than the global sea level rise of 1-2 mm/year over the past century and significantly higher

than the rates observed at other locations in the South Pacific (GoF, 2012). Salt water intrusion into

coastal aquifers is already reported in coastal communities. On health, it has proved difficult, if not

impossible to detect the effect of climate change on health indicators due to data limitations (WHO,

2015). A direct relationship has been observed between droughts and floods and Dengue Fever and

diarrhoeal diseases. The outbreak of Dengue Fever in 2012 affected 24,000 of the islands’ 856,000

inhabitants. Ciguatera, a toxin found in reef fish, has been linked to higher sea surface temperatures

and ENSO cycles.

Last but not least, data shows that the level of ocean acidification has been slowly increasing in Fiji

waters. About one quarter of the carbon dioxide emitted from human activities each year is absorbed

by the oceans, which causes ocean acidity. This affects the growth of corals and organisms that

construct their skeletons from carbonate minerals.

2.3.3 Climate change projections The Intergovernmental Panel on Climate Change (IPCC) Fifth Assessment Report noted that

atmospheric concentrations of carbon dioxide, methane and nitrous oxide have increased to levels

unprecedented in at least the last 800,000 years, with carbon dioxide concentrations rising by 40 per

cent since pre-industrial times from 278 parts per million (ppm) to 391 ppm in 2012, primarily from

fossil fuel emissions and secondarily from net land use change emissions. Greenhouse gas (GHG)

emissions are emitted locally but the impacts are felt globally and felt disproportionately by the

poorest. Climate change will affect agricultural production and may become a threat to food security,

water resources, infrastructure and human health. But there are many gaps in climate and

vulnerability assessments for Fiji to date. For example, the impact assessment in the Second

National Communications (GoF, 2014) used much the same modelling data for the agriculture and

health sectors as was included in the initial National Communications (GoF, 2005). In addition, the

underlying environmental, social and environmental linkages need to be better understood, measured

and evaluated in order to be able to more accurately project how climate change might affect Fiji’s

development.

The most significant climate change effects are projected to be tropical cyclones and floods, as per

trends to date. (WRI, 2015). Projections indicate that while there may be a decrease in the number of

tropical cyclones, the average maximum wind speed of cyclones will increase between two percent

and 11 percent and there will be increase in rainfall intensity within 100km of the cyclone centre.

Surface air temperatures will increase by at least 2.5oC by 2100 at 1990 levels. A rise in temperatures

will affect coral health. Aragonite saturation needed for coral growth and reef ecosystem development

has fallen from 4.5 pre-industrial to about 3.9 by 2000 (WRI 2015), compounded by storm surges

which are projected to increase in frequency and intensity. Current understanding of projected

changes to precipitation in Fiji is weak. Total annual rainfall is projected to be similar but more

concentrated in the wet season, falling in more intense events.

On current global GHG emissions trajectory, the additional global sea level rise could be as high as

82cms by 2100 (IPCC, 2013), though there is significant uncertainty surrounding ice-sheet

contributions to sea level rise. This level of SLR would lead to increased coastal erosion due to

concurrent action of storm surges. Sea level rise will primarily affect cities and towns in Suva, Nadi

and Lautoka and others. It is estimated that 1150 to 2300 hectares of land on Viti Levu (equivalent to

2 to 4 percent of land below 10 metre elevation) could be lost by 2050 due to sea level rise (DoE,

2011). The Impact on coral reefs is estimated at +US$5-14 million per year in lost fisheries, habitat

and tourism. SLR may results in up to 5 percent of Fiji’s sea grass in deep water by 2035 and up to

20 percent by 2100 (MoSPNDS, 2014)

While the direct effects of raised levels of CO2 are likely to benefit mangrove productivity (MMP 2013),

sea level rise is likely to lead to mangrove mortality as long as mangroves cannot migrate inland due

to sea walls and land developments. A reduction in mangrove areas will have knock-on effects on

coral reefs, sea grass and nearshore terrestrial habitats, effecting the extent and productivity of

inshore waters and coastal habitats (Mangrove Management Plan (MMP) 2013).

12

Climate change may result in a 5 percent loss of Fiji’s sea grass by year 2035 and 5 to 10 percent

loss by 2100. Variations in tuna catches have been observed in in El Nino and La Nina years and may

be exacerbated by climate change. Changes in migration patterns and depth of fish stocks affect the

distribution and availability of tuna during such periods (WRI, 2015). The impact of increased ocean

acidification will be compounded by other stressors such as coral bleaching (though increased sea

surface temperatures), storm damage (which in itself could be exacerbated by climate change) and

fishing pressure.

There are multiple pathways between these primary changes and how they might impact on

livelihoods and the economy. Potential health pathways are through a higher incidence of droughts,

floods and higher temperatures which will affect water security, food security and pathogen transmittal

through food and water. For example, salmonella, typhoid fever and leptospirosis may increase with

higher temperatures and higher rainfall. Respiratory diseases can be exacerbated by hotter weather.

Links are also being made with an increased risk of non-communicable diseases (diabetes, cancer

etc.) due to detrimental impacts on local agriculture, post-disaster reliance of processed food and

hotter temperatures discouraging exercise. Projected change in the variability and absolute amounts

of rainfall is likely to affect hydro-electricity production, the loss of beaches as well as flooding and

degradation of coastal systems will impact on tourism.

2.3.4 Environment-development baseline dynamics What follows in this section is a description of the environmental and development system dynamics

in Fiji which are a major source of sensitivity to climate variability and change. To minimise the

impacts of climate change on people, ecosystem function will need to be working reasonably well,

even before adaptation measures are implemented. In order to be effective, measures to build

resilience and adaptation to climate change need to address these system vulnerabilities to be

effective. How a potential NCF interacts to address the effects of these baseline dynamic processes

should be one the main considerations in its design.

Environment-livelihoods ecosystem dynamics can be discerned in two spheres. The first is the land-

based sphere, the second is the coastal area sphere. Both are connected, for example, the

conditions of the reefs and marine fish stocks are affected by freshwater withdrawals and by

deteriorating quality of outflows of silt and water into the marine zone. Freshwater and inshore

fisheries are connected directly: 10 to 12 percent of Fiji coral reef fish use freshwater ecosystems at

some stage of their life cycle while nearly 97 percent of Fiji freshwater fish use marine and estuarine

water during the lifetime. In addition the population of Fiji is 865,0007 and is projected to reach one

million by 2030. There is mounting pressure on land and fisheries resources to service the growing

demand (MoSPNDS, 2014).

Figure 1 is an illustration of the environment, economy and climate change system linkages. Climate

change resilience needs to be considered in the context of the underlying system dynamics and

vulnerabilities which are in themselves caused in most part by the way that development processes

are interacting with ecosystems to affect ecosystem function and the ability to mediate climate

change. In Figure 1, the climate change hazards are depicted in purple. The four main environmental

assets that are critical to how climate change impacts are felt are the forests, river courses, the

mangroves and the reefs, indicated in red. The latter two environmental assets form a natural

protective barrier to the islands of Fiji but are being degraded and destroyed in a number of ways.

Figure 1 shows the complexity of the system dynamics and the basic message is that there are

multiple pathways that could transmit climate change effects. Building resilience to climate change

has to consider how the baseline development investments and strategies impact on the exposure

and sensitivity to climate change and the behavioural changes that can and should be made, together

with investments in adaptation technologies and practices.

One of the problems in integrating the environmental dimension into development plans is that

resources are constrained and the environment is seen in Fiji as a development dimension that can

be managed after development has taken place (DoE, 2010;, Prasad, 2003). The potential impacts of

7 Population and labour force estimate, 2014

13

climate change as an additional stressor to development challenges requires pause for thought to this

perspective. Balancing the short-term gains with long-term productivity does not mean that

development must stop but rather it requires investments to be designed differently, for example, a

rational way of land-use planning, ensuring the proper design of roads and investment into soil

conservation. The solutions are known, what is lacking in many cases will be the political will to make

the required changes, as indicated in many national natural resource strategies in Fiji. Data to

quantify how investments in adapted investment design pay off are urgently needed and properly

targeted information could help to create awareness and build support for resilience building. For now,

some of these system linkages may be appreciated by some policy makers and investors but

stakeholder interviews carried out in the preparation of this report show that most policy makers do

not understand the entire system dynamics in play.

Figure 1 Environment, economy and climate change system linkages in Fiji

Ref: Own source

Land-based sphere Everything above the blue shadow line in Figure 1 (illustrating the coastal shoreline) can be referred

to as the land-based sphere. The main two environmental assets that mediate the effects of climate

change are forests (on steep lands) and river courses. Forests are converted to profitable enterprises

(profitable in the short term), mainly road construction, agricultural and timber production and

expansion of settlements. But the environmental costs are not taken into account in decisions on

forest conversion. Soils wash down from the upper slopes due to road construction and land

clearance for agriculture and gravel and sand extraction taking place downstream change the depth

and stability of river courses. Reduced flow regulation from cleared slopes compounds the problem of

heavy rainfall events which are projected to become more pronounced by climate change, leading to

flooding. Deeper river channels increase the flow of sea water intrusion, which is particular problem

given sea level rise projections. These processes are facing increasing pressure from population

growth, the demand for land area for settlements and greater agricultural productivity.

Around 70 percent of land in Fiji is classified as steep land on the two main islands of Fiji (MoAFF,

2007). The Erosion index is high by world standards and extreme care is required in agricultural land,

irrespective of soil type; land with slopes greater than 8 degrees gradient would be considered

incapable of growing sugar without unacceptable damage (MoAFF, 2007). Soils that are suitable for

14

agriculture are already being used for agriculture. Small scale clearing of natural forest on steep, less

arable slopes is happening at a high rate due to smallholder agriculture, the spread of small villages

and settlements, urban growth and infrastructure, (roads, dams, bridges, reservoirs), fire and poor

logging practices.

The three main drivers of deforestation are agricultural development, infrastructure development and

settlements expansion. Forest loss impacts the environment through a host of pathways included

degraded water quality from poor logging practices, loss of shading, loss of biodiversity, spread of

freshwater invasive, sediment deposition of coral reefs and loss of important habitats for endemic

plants and animals which all increase vulnerability to climate change. Degraded forests open up the

way for land clearance for agriculture (MoAFF, 2007) and for the spread of highly invasive species

(Haas, 2015). Thus land degradation is an accelerating process.

The poor adoption and application of land husbandry practices and the resultant degradation of land

and water resources makes the impact of natural disasters becoming more acute and increases

vulnerability to climate change. Sugar cane cultivation is responsible for most widespread land

degradation. On Viti Levu nearly 15000 hectares of sugar cane have already been identified as

requiring urgent soil conservation work and a further 6500 hectares would be retired from sugar cane

and put to a less erosive from of land use (MoAFF, 2007). The country’s high dependence on the

sugar industry and its quota and incentive system encourage cane farmers to move into steeper

slopes and to use soils without care. Over a short period of time these areas experience soil

depletion, soil moisture deficits and decreasing productivity. Soil loss measurements clearly

demonstrate that the agricultural productive base in many sugar cane areas is declining at a rate that

is well above what would be regarded economically acceptable. The small size of land holdings (less

than 3 hectares ) forces farmers into intensive cultivation for high output, short term production with

minimal or no fallow periods. This produces soil erosion, loss of plant nutrients, increased pest and

disease infestation, reduction in soil depth, decreased soil water-holding capacity and rill and gully

erosion8. Tractors cause compaction of the soil and results in poor crop growth and low infiltration

rates during heavy rain, which manifest as flooding and represents another dynamic that is

exacerbated by climate change. The commercialisation of livestock farming without good pasture

management leads to overstocking and soil erosion on marginal land areas.

Off-site effects include increased siltation in the river systems, formation of mud banks, reduced

navigability of rivers, and destruction of fish spawning areas, reduced fish populations and flash floods

during heavy rains which exacerbates the impacts of climate change. The latter causes damage to

infrastructure costing millions of dollars in rehabilitation and destruction of coral reefs. The leaching

and overland flow of the fertilisers and farm chemicals into rivers and ground water causes water

pollution, reducing resilience to climate change through various pathways. The accumulation of

tonnes of animal waste finds its way into the river systems and pollutes them. Soils in Fiji are volcanic,

naturally acidic due to high rainfall and fragile and require fertilisers to counteract nutrient loss, which

further increases acidity. Indiscriminate application of chemical fertilisers and pesticides can and do,

however, pollute river courses and eventually inshore areas with livelihood impacts. This is important

because it contributes to water scarcity and reduces resilience to climate change because

contamination makes plentiful water supplies unfit for drinking or for agricultural purposes as well as

downstream impact on coral reefs (MoAFF, 2007).

Roads impact healthy rivers and watersheds as they are the largest source of sediment to streams

and can block upstream and downstream movement of aquatic life, and they act as pathways for

exotic species. The unplanned alignment of logging roads provokes erosion on road embankments.

Logged areas cause soil erosion which results in warmer and less oxygen rich water with an

unbalanced nutrient load. Gravel extraction (for the construction industry) increases channel velocity

causing more intense flooding downstream. Over-extraction of upstream river material transforms

Fiji’s natural river systems into a smooth culvert like course with a lower river base which result in loss

8 For example, research has shown that soil loss rate on a ginger plot where no conservation is practice leads to a loss of 50 tonnes of soil per hectare annually which could be reduced to 1 tonne per hectare annually with low sustainable land management technologies such as vetiver grass as hedge rows.

15

of habitat for aquatic fauna, larger and more frequent flooding at the river mouths which is now

evident in Nadi and Labasa in recent years and the effects of which will become magnified with

climate change. The changes to river courses also cause the break-down of infrastructure such as

bridges, Irish crossings, culverts and irrigation offtakes due to the inability to withstand the impacts of

the lowered base course of rivers, another dynamic which will be affected by climate change. Over

1.2 million metric tonnes of hard rock, sand and gravel has been removed since 2008 which is

believed to have had a negative impact on the natural ecosystems of rivers and the coastal

environment (MoSPNDS, 2014). Over one third of all freshwater systems are ranked as highly

impacted.

Land-based activities affect freshwater systems which affect coastal inshore systems. For example,

eutrophication in urban streams from agricultural activities kills aquatic life and affects downstream

ecosystems such as reef systems. Algal growth has been round in many Fiji reefs, through the

causes of this have not been fully established. Riverine systems have an average of 11 more native

fish species than degraded watersheds which play an important role in the diet and livelihoods of

inland communities and have been declining in recent years, impacting food security.

Coastal-based sphere All of Fiji’s urban areas and an estimated 690,000 of Fiji’s 900,000 population live within 30 kilometres

of the country’s surrounding reefs, as well as all its major industries. About half of Fiji’s population are

urbanised and this figure is expected to increase to 70 percent by 2050. Pollution and infrastructure

expansion affects the coastal and inshore environment negatively, which increases the sensitivity of

Fiji to climate change impacts. Sediment load, poor waste water management systems and urban

storm water contribute to the problem. River mouth dredging to reduce flood risks, sedimentation

from the construction and growing mining industry, and sand mining for the construction industry also

contribute to the destruction of mangroves and degradation of sea grass and coral reefs. The

estimated volume extracted from the Laucala Lagoon alone averages 700,000 to 120,000 tonnes

annually since 1962. Heritage sites are not spared. Coastal erosion has become significantly more

evident in Fiji in the last 50 years. Very little is known about the rates of erosion and the effectiveness

of activities attempting to stabilise the shoreline and beaches. The clearing of mangroves and coastal

vegetation exacerbates coastal erosion and increases sensitivity to climate change.

The construction of roads, bridges, ports and major buildings in coastal areas has modified nearshore

bathymetry, increasing the size of waves hitting the coastline (DoE, 2011) leading to coastal erosion

and vulnerability of settlements and people and opening the way for more negative impacts from

climate change. Most of the artificial coastal protection structures in Fiji have been poorly designed

and short lived due to structural failure from toe erosion, leaning and loss of backfill, which negatively

affect the ability to protect coastal assets from the effects of climate change.

Reefs are important in supporting fisheries and a source of coastal protection but are affected

eutrophication, coastal development, mangrove clearing and overfishing. Over-fishing can cause

deterioration in coral reefs which has further reaching consequences on other species. Over 70

percent of Fiji’s reef fisheries (which are divided into traditional management units called qoliqoli) are

fully exploited or over exploited. Though Fiji’s reefs have proved to be resilient in the mass bleaching

event of La Nina event of 2000, the ability for Fiji’s reefs to withstand and recover from climate change

stressor will depend partially on fisheries management and management of human pressures such as

land use and watershed management. In urban areas and areas of intense agricultural activity, reefs

have been shown to be less resilient.

Seagrass is important for Fiji’s coast because they are highly productive, for example, it is estimated

that 400 m2 of sea grass can support 2000 tonnes of fish but it is also affected by sewage and other

waste water pollutants, coral extraction, river siltation, coastal erosion and storm surges and

excavation of channels for tourism developments (DoE, 2011; MoSPNDS, 2014). Seagrass plays an

important role in carbon sequestration.

Mangroves are found along estuaries, river banks and lagoons. They provide nutrients and protection

for reefs and sea grass beds and are a major nursing area for fish and birds. The estimated value of

mangrove-associated fisheries in 1983 was F$21.8 million (US$10.9 million) or F$566/ha (US$283).

16

Crustacean, mollusc and beche-de-mer resources are negatively affected by removal of mangroves.

Mangroves perform a vital coastal stabilisation role by trapping sediments which both control the

erosive action of waves and currents as well as reducing silt loads and toxins that can potentially

reach and kill coral reefs. This has obvious resilience benefits regarding climate change. Mangroves

areas declined by 5 percent between 1991 and 2007, mostly in urban areas which saw a 40 percent

decline in the Suva peninsula and Lami area between 1991 and 2007. This is largely because of

clearing for urban expansion and tourist development. They are sometimes cut down prior to

development being approved or funded resulting in vacant lots of no biological or economic use. This

is destroying Fiji’s mangroves at an alarming rate (DoE, 2013; Doe, 2011). Other pressures are

unsustainable harvesting for wood and building materials, excessive sediment discharge from

unsustainable logging and agricultural practices upstream, creation of waste disposal sites and

disposal of dredging material. Many of these processes are unmanaged, e.g. illegal mangrove felling

for fuelwood in the Southern Division of Fiji may be around 50 percent of recorded production. EIAs

should be carried out for commercial mangrove harvesting but are not enforced (MMP, 2013). In

Labasa, 15-20 ha of highly productive mangrove appear to have been killed by uncontained spoil

disposal direct into the mangroves. Similar extensive mangrove fatality has occurred in the Rewa

delta as a result of dredge spoil disposal. Mangroves have been shown to be the most carbon-rich

forests in the tropics, containing on average 1,023 Mg carbon per hectare, an order of magnitude

more than terrestrial tropical forests (MMP 2013).

The challenges around the sub-optimal management of the environmental base matters for climate

change resilience, because degraded or changed environmental resources magnify the impact of

climate variability and climate change. These challenges will become bigger as the population

increases and as the drive for economic growth and raising of living standards progresses. The

mainstreaming of climate change adaptation into sector spending plans, policies and strategies is

required in order to ensure that all financing is contributing to building resilience to climate change.

3. Key elements in place to support the NCF.

Fiji has some of the basic building blocks in place to establish the NCF: a couple of pieces of

important legislation relevant to the governance of environmental resources; a financial management

information system; a financial management reform process underway; a performance management

system that connects the work of the Ministries to the Ministry of Economy; Permanent Secretaries

who are held to account for their Ministry’s performance on the basis of agreed annual targets and

could provide political leadership for an integrated planning effort; national experience in running trust

funds and in implementing sophisticated resources mobilisation strategies; strong partnerships with

other Pacific Island Countries which affords good learning exchange possibilities; and human

resources which are a good basis for capacity development measures.

There are also many weaknesses. The lack of integrated planning between ministries is a serious

constraint to designing and implementing adaptation strategies, given the linkages between climate,

energy, food and agriculture, water, forests, health and urban planning to name but a few. Underlying

this is what appears to be a lack of political will across the Government to implement the

recommendations in the numerous natural resource-based strategies which recognise the links

between environmental degradation, climate change resilience and sustainable development. The

National Climate Change policy indicates areas where mainstreaming and planning improvements are

needed but the mid-term monitoring report concludes that very little progress has been achieved

across the eight objectives of the National Climate Change Policy. This was partly attributed to weak

leadership and management by the CCU, for example in tracking and reporting progress of the

NCCP, and the lack of financial support. Corporate commitment to the implementation of the NCCP

was found to be low in the mid-term review.

Perhaps the most important element that is needed for the NCF to work is leadership to implement

policies, enforce legislation, to promote cross-government working and maintain commitment to

quality and performance in planning and implementation systems. Enforcement of legislation, codes

and standards is weak in Fiji as reported in many strategies reviewed for this report.

17

During the stakeholder workshop a stakeholder workshop was held which identified the challenges in

in establishing the NCF to be as follows: silo-type planning and weak voice from communities in

planning processes which affects the effectiveness of government investments; mis-management of

funds and political interference; slow delivery. The main barriers were seen to be political stability;

politicised planning and budgeting systems; and a lack of performance data and management.

In order to attract international financial flows through government systems, which would be needed

to build a system that could accept larger scale flows, planning and public financial management

practices have to be of a certain standard. Budget support9 requires good country systems to collect

information and provide statistics, monitor progress, evaluate impact, ensure sound results- focused

public financial management, transparent reporting and public accessibility of information. Clarity in

the choices of indicators and targets as well as on resource requirements are important elements for

the reliability of the system.

3.2 Legislative, policy and strategy framework A prospective NCF needs enabling legislation as a cornerstone for the governance of the natural

resources sector: what can and cannot be done and the manner in which natural resources may be

used or converted. For legislation to be effective, it needs enforcement capacity to ensure compliance

but enforcement on its own is costly. Legislation needs supporting policies as the framework for

directing public and private sector resources to the sector and a budgeted organisational strategy and

action plan. It also needs enabling factors such as awareness to raise levels of intrinsic motivation,

economic incentives, human resource capacity and capability and good performance management

systems. Many of these basic building blocks are missing in Fiji or there are significant weaknesses

which would need to be addressed for the effective and efficient functioning of an NCF.

3.2.1 Legislation It would be fair to say that the legal framework in Fiji to guide climate change resilience is weak as

many of the relevant laws are more than 30 years old and so resilience principles (e.g. managing for

variable environmental conditions which are expected to become pronounced with increasing levels of

climate change) are not likely to be reflected as the basis for natural resource use, as well as there

being some significant gaps. There are also many separate laws relevant to some ministries, e.g.

Ministry of Agriculture has over 33 laws that it is responsible for implementing. The problem is that

when individual management objectives are broken down into such small pieces, the sustainable

resource use objective (in aggregate) gets lost. In this instance, the 2020 Agriculture Sector Policy

Agenda recommends consolidating the law into an omnibus legislative Act, which should also include

the water resource management. Any legislation on natural resource use should be based on

technical information regarding resource quantities and sustainable use rates, particularly in light of

the climate change stressor.

The national legal platform is the 2013 Constitution which declares the commitment to social and

economic well-being and safe-guarding the environment, and the right of Fiji citizens to a clean and

healthy environment protected for current and future generations. In addition, Fiji has one important

piece of legislation in place and one important piece of legislation that is waiting for a third hearing in

Parliament.

The Environment Management Act (EMA), 2005 establishes a National Council for Sustainable

Development (not convened for the last two years due to internal issues) tasked to meet four times a

year, with membership from ministries responsible for land, mineral resources, agriculture, fisheries

and forests, health, tourism, the President of the Local Government Association, a representative

from an NGO, two members from the business community and a representative from the academic

community. The National Council on Sustainable Development is tasked with approving and

overseeing the implementation of a National Environment Strategy and to ensure that environment

and development commitments are implemented.

9 Defined as recurrent, predictable development policy lending in a medium term programmatic setting (World Bank, 2005)

18

The EMA requires the Department of Environment (DoE) to establish four units: Environmental Impact

Assessment (EIA), Resource Management, Waste Management and Pollution Control unit. The EMA

includes a provision for the establishment by other government entities, if required by the DoE, of

environmental management units to formulate environmental policy statements, develop natural

resources inventories and a resource management plan as well as conduct internal environmental

audits. The EMA also sets out a requirement for any government entity responsible for the

management of any natural resource to implement a system of natural resource accounting designed

to quantify in financial terms i) the resource capital administered by it ii) an expenditure incurred

during the audit period in relation to exploitation, extraction or use of the resource and iii) any

resource loss resulting in the audit period.

Required outputs are the National State of Environment Report, which was finalized in 2013 and still

waiting to be released by Cabinet. The National Environment Strategy has not yet been updated

since 1993. The Natural Resource Inventory and National Resource Management Plan either have

not yet been prepared or were not yet accessible at the time of writing this report.

The other important and potentially enabling piece of legislation is the Land and Water Resources

Management Bill 2016 which is intended to promote the implementation of sustainable land and water

resources management practices. It offers a more coherent and coordinated mechanism to monitor

and control the quality of land and water resources and safeguard against their degradation. Some of

the main characteristics of it are that:

It establishes a land and water resources management Board to i) plan and implement

sustainable use of land and water resources ii) facilitate coordination and cooperation

between the land and water use planning activities of government agencies, communities and

industry groups iii) appoint sub-committees as necessary to undertaken land and water use

planning and to provide technical advice iv) advises the Minister on the formulation of

regulations necessary for the conservation and improvement of land and water resources.

The Board is accountable to the Minister responsible for Agriculture and its members of the

Board shall consist of a land and water management expert appointed by the Minister to be

Chairperson, the PS Agriculture, the Director of Environment, an NGO representative and

four farmer representative from the four administration Divisions.

Land and conservation officers will be appointed

Every land and water use plan should involve i) integrated land and water resources planning

in order to manage catchments and sub-catchments ii) flood plain management iii) river and

stream management iv) water use allocation for the flows and reserves in a river, stream or

aquifer.

There are also gaps in the legislation. Most noticeable is that there is no legal framework on

integrated water resources management (IWRM)10. IWRM is important because it recognises that

water is a resource with finite limits (though renewable) dependant on rainfall (which is seasonally

variable), all other things being equal. It also requires that a water resources management strategy

allocates water on a set of agreed principles which should include priority access for domestic use

and the environment (i.e. minimum low flows to protect aquatic ecosystems) together with allocation

to productive activities that have the highest benefits for society. Water pricing is used to induce

efficient use of water, i.e. limit wastefulness. The legislation in Fiji covers various water services but

does not recognise environmental limits and the need to manage water according to those limits. For

example, the Rivers and Streams Act, which dates back to colonial times, provides for local

authorities to approve water abstraction from rivers but not according to any recognised

environmental limit. The draft water resources policy for Fiji indicates that, though Fiji has plentiful

water resources overall, the available resources are not plentiful in all places nor at all times. Some

10 IWRM is defined as a ‘process that promotes the coordinated development and management of

water, land and related resources in order to maximise the resultant economic and social welfare in

an equitable manner without compromising the sustainability of vital ecosystems‘(SOPAC

Miscellaneous Report 637).

19

areas have limited water. Climate change will affect water resources through changes in rainfall

patterns in a context of growing populations and increasing living standards which imply increases in

water consumption per capita.

Apart from that, a review of the various laws and ordinances that control the nations’ water and land

resources is needed in order to be consistent with the requirements of the 2005 EMA (MoAFF, 2007;

DoE, 2011). No less than 12 pieces of legislation in existence are relevant to land development and

conservation which are administered by different government agencies and have overlapping function

(MoAFF, 2007). This review should be done on the basis on agreed policy principles that reflect

environmental resources as being finite and the need to optimise natural resource management and

conserve them for future productive use. For example, principles that were established in the Rural

Land Use Policy which could be drawn on are as follows:

Use of land resources should not cause their degradation or destruction because human

existence depends on the their continued productivity;

Priority must be given to optimising land use to maintain and improve soil productivity and to

conserving soil.

As important, it has been noted in various government development strategies that there is very poor

public understanding in the rural sector about various land-related legislation. Field officers are often

not informed about new legislation or strategies. There is no clear technical guidance. And there is

poor understanding about the magnitude of land degradation. There have been no public awareness

programmes. And so it is not surprising that enforcement of legislation and regulations does not take

place. In addition, the level and standards of technology transfer from officials to farmers in

inadequate on matters of land use diversification and intensification, farming systems and their

development needs, costs of inputs, gross margins, post-harvest support and marketing (MoEF,

2007; MoASLR, 2006).

3.2.2 Policies and strategies The People’s Charter for Change, Peace and Progress in 2008 set out clear guidelines for building a

sustainable and efficient development model. The 2010-2014 RSSED establishes a strategic

framework to achieve sustainable democracy, good and just governance and socio economic

development. The RSSED has the following goals which are directly relevant to climate change

adaptation and GHG emissions mitigation:

Effective management of land resources while ensuring sustainable development;

Sustainable development and management of forest resources;

Pursuing growth through sustainable mineral and groundwater resources management;

A resource efficient, cost effective and environmentally sustainable energy sector;

Sustainable management and utilisation of Fiji’s natural resources;

Building national resilience to disasters and adapting to climate change

The system of Key Performance Indicators (KPIs) was established at ministry level to monitor national

RSSED implementation and to review and evaluate the performance of government agencies. No

comment can be made as to the adequacy of the KPIs in play since most of the 2015 Corporate Plans

were not available at the time of writing this report. The KPIs should be looked at critically to see if in

aggregate they deliver the RSSED goals relevant to climate change resilience. The discussion below

and Table 5 (below) highlights the gaps in the MoA KPI framework.

The Green Growth Framework for Fiji sets out 10 thematic areas to progress sustainable

development, recognising that the backbone of the economy and employment is environment and its

resources, that many aspects of development are cross cutting and inter-linked and that the solutions

will depend on meaningful partnerships between people and between agencies. The guiding

principles of the Green Growth Framework include:

Improving resource productivity (doing more with less);

Developing a new integrated approach reflecting the cross-cutting nature of issues relating to

sustainable development;

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Adoption of environmental auditing of past and planned developments in order to increase

win wins in terms of economic and environmental benefits;

Providing incentives for investments which support the efficient use of natural resources.

A number of other sectoral policies and strategies set out priorities and measures that are relevant to

ecosystem management and/or climate change resilience. These priorities and measures in various

documents such as the Disaster Risk Management strategy for the agricultural sector, the Fiji

National Strategic Development plan, the rural land use policy, the Fiji Forest policy and others have

been analysed and set out in tables in the NCCAS. The main issue is one of lack of implementation

which requires that these priorities are reflected in departmental and ministerial performance plans

and budgets.

A major gap and challenge for effective adaptation planning is that Fiji does not have an integrated

national land use plan. Only urban areas, which are a small portion of Fiji’s land area, are covered by

an authorised planning scheme or master plan. Other non-urban areas are planned under the iTaukei

Native Lands Act. Land is registered to traditional land-owning groups that has customary right to use

and occupy the land. Many Fijian villages have to varying degrees developed their own resource

management plans. But the issue is one of managing land in aggregate, recognising the ecosystem

impacts upstream and downstream and according to management goals that are based on

sustainable resource use, i.e. maintaining stocks of environmental resources in sufficient quantities

for future use and income generation. The absence of an integrated land use plan is a major

constraint to the wise allocation and management of resources and is of critical important as it covers

all land based resources such as forests, agriculture, minerals, rivers and streams (MoASLR, 2006).

The current administrative framework for resources allocation and management is highly fragmented

along sector lines, with reported tensions which has in turn promoted unsustainable use of resources

(MoASLR, 2006).

Table 4 summarises the legislative, policy and strategy framework relevant to climate change in Fiji.

The Table shows that there is a range of legislation relating to the various sectors, most of it outdated

(as indicated above) but very few policies in place. There are more strategies and plans in place than

policies but many of the recommendations are not implemented for a range of reasons including

political will, capacity and finance.

21

Table 4 Legislative, policy and strategy framework relevant to climate change in Fiji

Acts relevant to climate change resilience Supporting policies

Supporting plans

- - Road-map for Democracy and Sustainable development Socio-economic Development 2010 – 2014

A Green Growth Framework for Fiji: Restoring the balance in development that is sustainable for our future, 2014

Disaster management

Natural Disaster Management Act, 1988 Disaster risk reduction and disaster

management: a framework for action 2005 - 2015

Climate change -

National Climate Change Policy 2012

National Climate Change Adaptation Strategy for Land-based Resources.

National Climate Change Action plan, 2012

Environment

Environmental Management Act, 2005

EIA process regulation, 2007

Waste Disposal and Recycling Regulation, 2007

Endangered and Protected Species Act, 2002 and Regulations (2003)

National Environmental Strategy (1993)

National Biodiversity strategy and Action Plan, 2010

National Climate Change Strategy, Final Draft (2012)

Fisheries

Fisheries Act, 1988 and Amendment, 1991

Agriculture

Agricultural Land and Tenant Act, 1985

Drainage Act, 1985

Pesticide Act, 1985

Irrigation Act, 1985

Stock improvement Act, 1985

Biosecurity Act, 1985

Fiji Food and Nutrition policy, 2008

Standard operating procedure for DRM and CCA in Agriculture, 2015

Water

Water supply Act, 1985 Rural water and

sanitation policy, 2012

National water resources policy for Fiji Islands (initial draft)

Mining

Minerals Act, 1978

Quarries Act and regulations, 1985

Offshore Mineral policy (draft)

Forestry

Forest Act, 1979; Forest Decree, 1992 Fiji Forest Policy, 2007 Fiji REDD+ policy 2010

Mangrove Management Plan, 2013 National REDD+ forestry strategy, 2012

Land management

Native Lands Act and amendment, 1978 and 2002

Native Land Trust and amendments, 1985 and 1998, 2000, 2002.

Town and Country Planning Act, 1978

Crown Lands Act, 1978

Land conservation and Improvement Act, 1985

Land Development Act, 1985

Rivers and Stream Act, 1985

Land Use Decree and Regulations, 2010

Rural land use policy, 2006

National Action Plan to combat desertification/land degradation and to mitigate against drought, 2007

Integrated Coastal Management Framework (2011)

Health

Public Health Act, 2002 National Health Emergency and

Disaster Management Plan, 2012-2016

22

It is worth noting that the Government had been planning a Sustainable Development Bill as far back

as 1999, which was taken over by the coup d’etat in 2000. It was comprehensive in its policy reach.

In this Bill, the proposed National Council for Sustainable Development was to be tasked with

preparing the following policy statements:

Policy on Integrated Resource Management which must include:

o Sustainable coastal management;

o Sustainable mineral resources development;

o Forestry development

o Fisheries development

o National biodiversity, conservation and protected areas;

o Sustainable agricultural development;

o Sustainable resource management on native and State lands.

Policy on poverty, sustainable human settlements and achieving a sustainable population;

Policy on integrated waste management;

Policy on sustainable human and environmental health;

Policy on energy conservation;

Policy on training, education and investment.

For example, the MMP 2013 notes that mangrove management needs a policy that recognises the

ecosystem services provided by mangroves as well as their potential role to adaptation and as a

result the policy requires a more conservative approach to mangrove conversion.

Coordination on natural resources and ecosystems management Part of the implementation problem is the lack of coordination and harmonisation across sector

spending plans and the result is that the budget does not reflect policy priorities. As noted in many

strategies, Fiji has a highly fragmented system of government ministries working on common and

overlapping areas and with gaps in other areas that are critical for effective climate change

responses. For example, no one government department is responsible for the planning and

coordination of the watershed management (MoAFF, 2007), mangrove management, water resources

management, coastal management.11 Land management objectives in Fiji affects the portfolios of the

eight Ministries representing economic services in Fiji and local government12. Water resource

management spreads the interests of eight government entities. There is no environmental protection

agency in Fiji and the Department of Environment is nominated to provide policy and regulatory

functions but is poorly resourced to do so. Data and evidence to underpin planning efforts is sparse.

In addition, although some key strategies recognise the connections between environmental,

economic and social system linkages and how they affect vulnerability to climate change (Rural Land

use Policy, 2005; Forestry Policy, 2007; Action Plan on Desertification, 2010, Integrated Coastal

Management Plan, 2011; Mangrove Management Plan, 2013), political leadership on progressing the

many good recommendations in these plans is missing, which is hindered by the current structures in

government, limited funding around which to coordinate and limited human capacity.

The Fiji Green Growth Framework for Fiji and National Development Plan process entailed a

consultative process to develop national development plans. But integrated development planning

needs to go further, it requires a harmonisation of priorities and methods across government. An

example of where this matters is the Ministry of Agriculture (MoA) which has five operational divisions

including land resource planning and land and water resources. Millions of Fijian dollars have been

11 For example, the MMP85 recommended a review of mangrove management for fuel wood; a review of the Fishing Rights Compensation procedure, which is seen to provide perverse incentives for mangrove clearance11, but neither of these recommendation have been carried out in the 28 intervening years between MMP85 and MMP2013.. 12 Infrastructure and Transport; Ministry of Agriculture, Rural and Maritime Development; Local Government and Environment; Land Resources and Mineral Development; Fisheries and Forests; Sugar; iTaukei (indigenous affairs).

23

spent in dredging rivers13 that are receiving high amounts of soil washed down from the slopes14, but

the more cost-effective, preventative solution might be to invest in landscape conservation practices

to prevent soil erosion in the first place. The focus and budget in the MoA is focused on the

infrastructure solution, with land conservation receiving less than one percent of the MoA budget.

The lack of coordinated decision-making around public sector investments is reflected in the budget

preparation process which means that the budget does not support a consistent set of policy

objectives across ministries. A nation sets its priorities and projects its values through its budget,

through the policies and objectives that the budget supports (MoE, 2016). But the budget preparation

process in Fiji is carried on the basis of actual spent in the previous year less any one-off items (MoE,

2015). These budget bids are evaluated by the Budget Division of the MoE which provides a limited

form of integration of sector plans. Ministry leads have bilateral consultations with the strategic

planning officer in MoE when Key Performance Indicators (KPIs) are discussed. Duplication between

sector plans is identified and eliminated for example, if two ministries are planning on installing

boreholes. But this falls far short of an integrated strategic planning across sectors where objectives

are harmonised. There are no multi-year expenditure projections in the central agencies which is

indicative of a lack of forward planning towards resilience goals.

The availability of a financing source has been shown to have convening power to coordinate different

players. There are a few examples where coordination has been successful around a funding source.

REDD+ is proving successful in coordinating ministries because there is financing that pulls in the

interest from ministries with an interest in the area. Another example of good coordination experience

was reported to be the GEF-funded health and adaptation project implemented with support from

World Health Organisation. The coordinating body was disbanded because there is no more funding

to coordinate around. The implication is that the NCF could perform an important and much needed

sector coordination function.

Mainstreaming of climate change policy into sector plans and budget It is unclear the extent which climate change policy has been mainstreamed into sector plans and

budgets in Fiji though the indications are that the degree of integration has been weak. To illustrate

this point, Table 5 compares the adaptation options identified in the Fiji Second National

Communications Report to the UNFCCC to the Ministry of Agriculture 2015 corporate plan.

Table 5 Comparison of adaptation measures identified for Fiji and Ministry of Agriculture performance targets

Adaptation measures identified in 2nd National Communications (2013): agriculture sector

Ministry of Agriculture output indicators (2015 targets) – selected examples from Output 1: Maintaining food security in the non-sugar agriculture and livestock sectors

Agriculture Agricultural diversification;

Traditional multi-cropping;

Traditional planting methods e.g. vertiver grass for soil stabilisation;

Use of more tolerant and tested species and cultivars including flooding and salt water;

Use of legumes for soil enrichment;

Good drainage and irrigation systems in place;

Hydroponics;

Tree crops;

Agro-forestry including planting shade trees and live fencing;

Farm practices

# of land use and farm plans incorporating best farm practice and technology that are disseminated and adopted by farmers (26)

# of farmers diversifying to increase farm production (318).

Pest and disease control

Reduce prevalence of livestock disease (25 percent)

Reduce the prevalence of crop pests and diseases (18 percent)

# of new control measures and management programmes for pest and disease management developed and implemented (4)

Food security

Conservation of crop germplasm (35)

Provision of planting materials (35)

13 F$14 million or US$7 million was allocated in the 2016 budget. 14 A figure of 21 million tonnes of soil per annum washed away into four of the seven rivers in Fiji was reported in the Fiji Green Growth Framework for Fiji.

24

Research activities on resistant varieties and regular testing of soil samples;

Use of natural insecticides and animal medicine

Provision of vertiver grass and NFT planting materials (2)

Strengthen planning response to disasters

# of indigenous livestock and crops distributed to farmers (8)

Output 4: Sustainable management of natural resources through flood protection programmes and other sustainable land management practices

Sustainable land management

In addition to soil conservation measures listed above:

Foreshore protection;

River diversion;

Dredging;

Land use planning;

Integrated watershed management projects

Relocation of farms from coastal areas to inland areas with appropriate farming systems.

#number of SLM methods implemented by communities as a result of technology transfer and knowledge transfer (26);

# of land use plans and farm plans implemented and distributed to farmers (40);

#number of land identified for agricultural purpose and commodity fit (40);

Combatting land degradation (16);

#number of land cleared, prepared and utilised for agricultural purpose (26).

# of river dredging works (3);

# of river bank protection (2);

# of drainage schemes maintained (92);

# of rain fed areas improved (3).

Ministry performance targets on food security are line with many of the adaptation options identified in

the agricultural sector in Fiji. The question is then about how these output targets are delivered – are

they being implemented in ways that invest in resilience? For example, is the indicators on

prevalence of pests and diseases being achieved through means that minimise the impact to

ecosystem function? The additional costs of adaptation should be focused on the implementation

needs to ensure that resilience to climate change is delivered through the KPIs, e.g. training, skills

development, coordination, designing the interventions and monitoring results.

The second point to note is that there is a divergence in priority measures when it comes to

sustainable land management the between adaptation list of measures and the Ministry performance

targets. Some of the differences reflect gaps (e.g. River bank protection appears in the KPIs but not in

the adaptation list of measures) and some of the differences reflect departmental boundaries (for

example, foreshore development may be under Department of Lands). Also, in each of the two list of

adaptation priorities there are alternatives, e.g. in the adaptation measures list the choice between

watershed management and river dredging, or foreshore protection and relocation of communities. In

the Ministry list there are also competing or inconsistent indicators, e.g. the choice between hectares

of land cleared for agriculture and combatting land degradation, or dredging works and river bank

protection. In addition, some of the indicators are too vague to provide any assurance of

sustainability, e.g. number of land use plans or number of rain-fed areas improved.

An additional observation is that, whilst segmenting the Ministry’s portfolio into Outputs with distinct

responsibility areas or characteristics may be a pragmatic way of covering all relevant dimensions of

the Ministry’s mandate, unless there is a coordinated approach to planning with a culture that enables

open conversations and a training programme that promotes shared understandings of a problem, it

is very likely that fragmented planning and implementation will be the result, marked by inherent

contradictions and conflicts arising between different teams and work plans. These contradictions

can be seen in the choice of indicators within and between output areas in the Ministry’s performance

plan, as discussed above. Another way to look at it is in the budget. The budget for watershed

management in the Ministry’s budget allocated is F$498,300 while the amount dedicated to land

clearing is F$500,000 in 2016 (MoE, 2016c) which, at face value, could mean net resilience benefit of

zero without proper planning consideration of where land clearance takes place to preserve

ecosystem function. It is also worth noting that watershed management has a budget of less than one

percent of the total Ministry of Agriculture budget (F$76.2 million) indicating the disconnect between

the recommendations contained in the various land-based strategies and the way budgets have been

25

allocated (e.g. 2020 Agricultural Sector Policy, Rural Land Use Policy, Forest Policy Statement,

National Action Plan to combat Land Degradation and others with a call for improving watershed

management).

The conclusion reached is that i) integration of the adaptation message and approach needs to

happen within Ministry core business for efficiency and effectiveness; the Ministry’s performance

framework would be enabling of this (with revisions to the indicators as indicated above) and ii) the

adaptation process should be an inherently research-oriented endeavour in order to discover the

value for money proposition of these adaptation measures either individually (for example dredging)

or as a package (for example climate resilience farm practices), in order to inform future adaptation

plans, especially given the fact that baselines are continuously changing, climate change is an

dynamic risk interacting with many moving parts which makes CCA context specific.

The 2016 budget allocation reflects between 27 percent to 55 percent of capital budget allocation to

the Ministries of Fisheries and Forests, Lands and Resources and Agriculture for capital expenditures,

amounting to some US$27 million (MoE, 2016), indicating that resilience benefits could be extracted

from the existing government activities and budgets. There may be room for at least some of these

funds to spent more efficiently on measures that improve livelihoods and increase resilience to

climate change, for example, re-orientating the emphasis from river dredging schemes to sustainable

land management, or simply enforcing legislation on land-use zoning15 and for investments funded

through the NCF to be linked to these plans. Integrated planning can be useful in finding efficiency

improvements and therefore an important mechanism in helping the funding go further.

Table 6 compares the baseline problem narratives contained in natural-resource management

strategies in Fiji and the equivalent adaptation measures proposed in the Second National

Communication (GoF, 2014). One can see the extent to which these narratives reflect system

dynamics and the interaction of climate change with it. The comparison shows gaps between and

within each of the narratives, indicating the need to engage with these issues within the core planning

process of responsible ministries.

Table 6 Complementarity between baseline priorities in water, biodiversity and coastal zone and adaptation options

Sector Baseline priorities identified in national strategies relevant to resilience

Adaptation options identified in the UNFCCC 2NC

‘Systems’ gap in the two lists of priorities

Water Coordination between sectors;

Lack of human capacity;

Long-term sustainability of water services and schemes

Degraded water quality from untreated waste water, lack of solid waste management and sediment and chemicals washed down from the land;

Watershed management

Ground water protection.

Rainwater harvesting systems

Access to multiple water sources

Bottled water available in urban centres

Upgrade drainage systems

Increased water recycling;

Water pricing;

Water conservation

Pilot projects for IWRM

Water safety plans

Gap in dealing with water pollution from various sources including the need for watershed management. A unifying concept of IWRM is mission which recognises competing demands for water, allocation rules based on sustainable resource use and a sustainable financing framework for efficient and continued use.

15 For example, the 2011 Integrated Coastal Management Framework indicates that people build their

homes too close to the shore making them more vulnerable, again increasing sensitivity to the risk.

The 30m setback is not enforced.

26

Biodiversity Promote the sustainable management of indigenous forest including mangrove;

Enact regulations or codes of practice which ensure EIAs of new logging areas and plantation establishment sites;

Encourage and support community based natural forest restoration initiatives;

Encourage and help communal management units to establish or reinforce protected areas;

Establish the institutional and legislative framework for a core protected areas system for terrestrial and marine environments.

Nature reserves

Promotion of eco-tourism as a driver of biodiversity conservation;

Delineation of buffer and rehabilitation zones;

Relocation of endangered species;

The narrative in the 2NC approaches biodiversity as a protected areas issue; it does not recognise the pollution and degradation issues involved. i.e. system linkages are not appreciated. Likewise the solutions in the biodiversity action plan do not include recommendations regarding waste management and sedimentation from land clearance from agriculture.

Coastal zone Beach management and coastal erosion;

Wetland protection;

Non-point pollution;

Sea level rise;

Coastal and estuarine water quality;

Threatened and endangered species;

Coral reef management.

Solid waste management;

Sustainable fisheries management;

Foreshore and wetlands protection;

SLM along water ways for river bank protection;

Replanting and restoration of coastal vegetation;

relocation

The narrative in the 2NC does not recognise system linkages between land-based activities and the coastal zone. Adaptation options therefore focus on a limited problem area.

Integration of climate change into sector plans and working towards harmonisation between sector

plans requires effective coordination to ensure that shared investment proposals are developed which

will use scarce public resources efficiently and effectively. This requires good information and a

forward looking perspective, which is especially important given climate change, a dynamic risk.

The National Climate Change Adaptation Strategy (NCCAS) presents a series of recommended

activities in order to close the gap on the existing matrix of sectoral policies, strategies and action

plans, noted in Table 4. For example, Table 19 of the NCCAS (pg. 80) has suggested actions over a

three year timeframe to address these gaps such as revising the National Environment Strategy,

finalising the National Water and Sanitation policy, establishing a national Water and Sanitation code,

formulating a water resources management law, developing an agricultural and climate change policy,

reviewing the rural land use policy of 2006 to incorporate climate change adaptation (CCA) and DRR

and so on. The NCCAS also has a nine year action plan to strengthen institutional arrangements on

CCA and DRR (Table 20, pp 86) including activities such as a training programme, organisational

innovations such as establishing CCA/DRR focal points in each ministry, setting up a new working

group in the National Climate Change Team, reviewing the institutional responsibilities and linkages of

the Fiji Met Services and National Disaster Management Organisation (NDMO) and developing a

multi-stakeholder consultation process. Other similar tables contain actions on community awareness,

education and training, data collection and sharing. None of these actions have yet been costed.

To address the need for mainstreaming of the country’s national climate change policy into sector

plans and budgets, the 2012 National Climate Change Policy scoped out around 72 priority actions

across seven priority objectives such as ‘Mainstreaming;, and ‘Data Collection, Storage and Sharing’.

The action plan has not been implemented according to the mid-term review carried out of it. A review

of the NCCP is due to begin in 2017.

3.2.3 Local government planning The Ministry of Local Government is responsible for planning processes in the 12 municipal councils

in Fiji through Special Administrators. The Ministry of Rural Development and National Disaster

27

Management Office is responsible for planning processes in all other communities including the

Divisional Commissioners (there are four Divisions in Fiji), Provincial Administrators and District

Officers. . The Ministry of iTaukei (Indigenous Affairs) oversees the political representation process

through the iTaukei Affairs Board: Provincial Councils (14 in total), District councillors and village

council. The iTaukei Affairs Board has recruited eight Conservation Officers to work in five Provinces,

who, among things, were trained to conduct rapid vulnerability and adaptation assessments with

support and collaboration of the CCU, Conservation International and the University of South Pacific.

The Ministry of iTaukei Affairs also established, through its Board, Resource Committees in all

Provinces comprising resource owners, line ministries and NGOs for the purposes of resource

management.

No reviews could be found on how well these local planning systems work. The Ministry of Local

Government was reportedly preparing a policy on coordination and planning, though this was not

availed for the development of this report.

3.2.4 Coordination on climate change policy The intention is to centralise climate change coordination and project implementation, monitoring and

reporting functions at the whole of government level with the Strategic Planning Office at the Ministry

of Economy. This is to ensure that budget-funded programmes and projects are implemented in a

holistic and well-coordinated manner. The Strategic Planning Office will be responsible for

assessment and tracking of performance of all government ministries through the new National

Development Plan (MoE, 2016). The first step has been to move the CCU from the Ministry of

Foreign Affairs to Ministry of Economy. The move of the CC from the Ministry of Foreign Affairs to

MoE was considered a good thing by many stakeholders during the consultations in preparation of

this report because of the greater coordination and convening power it confers. The CCU is

responsible for delivering the NCCP working within government mechanisms and engaging with a

range of stakeholders, as well as coordinating projects and programmes to that effect. It also offers

the possibility, though by no means guaranteed, of boosting MoE capacity to deliver climate change

financing and results. The other main responsibility includes being the main liaison office for donors

and the lead in international negotiation strategies.

The 2016 budget allocates F$6.1 million (US$3 million) for capital projects and the hiring of 13 new

staff to the Climate Change Unit of the Strategic Planning Office. The current situation is that only one

staff member of the CCU out a team of six people is reported to be funded by the Government of Fiji,

the rest are funded by projects. The CCU has a small annual budget of around US$200,000 (MoE,

2015). With an overstretched budget, it is difficult to coordinate other ministries and to make progress

the many actions listed in the NCCP Implementation Plan.

Notwithstanding the need to strengthen coordination, leadership and monitoring functions for the

implementation of the NCCP, this does not obviate the need for government ministries to strengthen

their own planning and implementation process for climate-relevant investments funded from the

consolidated fund, as the discussion in the previous section argues.

3.2 Delivery effectiveness and challenges Delivery challenges prevents funds flowing freely to deliver intended results. No information on

delivery rates in different ministries could be obtained at the time of writing this report. Ministry of

Economy does not, for example, publish a year-end report to show delivery with the level of

expenditures authorised by the legislature. Procurement processes are a major barrier to effective

implementation (MoE, 2016). Capital projects are delayed, not because of lack of funds or

government will but because the ministries have lacked the experience and technical expertise to

carry out the ground work needed to take the projects from beginning to end (MoE, 2016).

The country is undergoing civil service reform to bring about a skilled, professional and accountable

civil service. A Civil Service Reform Management Unit (CSRMU) has been established with a budget

of around US$500,000 in 2016. Analytical work carried out under the CSMRU has led to transitional

phase to abolish the Public Service Commission and the establishment of a new Ministry of Civil

Service which will support Ministries to carry out their responsibilities while maintaining central

28

coordination of key areas to ensure consistency across the Civil Service. The other achievement is

the development of a Guideline for Ministries to fully implement open merit selection for all positions in

the Civil Service. A training budget will be give emphasis in the budget (MoE, 2016). Other

measures that are being addressed are e-government systems; improvements to the Government’s

financial management system; procurement processes and salary scale revision. No information

about this was available but the action plan for the establishment of the NCF could support some of

the recommendations.

3.2.1 Public Financial management The 2004 Financial Management Act (FMA) provides the legal authority for public financial

operations, procedures and controls in Fiji. It is supported by a set of financial regulations, instructions

and manuals. The PFM system is decentralised to ministries who maintain their own bank accounts

and make their own payments. Selected expenditures require approval from MoE. Reallocation of

funds within expenditure heads area allowed under certain conditions. Fiji runs a cash-based

accounting system.

The Financial Management Reform (FMR) programme, which re-started in 2001, is geared towards

enabling government to better implement its policies and deliver goods and services more effectively

and efficiently. The FMR has four key components i) financial legislation and FMR policies ii) the

development and implementation of the Financial Management Information System (FMIS) for

expenditure management iii) the introduction of performance budgeting and iv) change management.

The new Financial Management Act was its associated policies and regulations have been in place

since 2004. Financial authorities have been decentralised to Permanent Secretaries. The FMIS was

introduced into the Fiji public sector in 2005 and completed in October 2007 and FMIS training

support is provided on an on-going basis. Performance budgeting is gradually being introduced

across government with agencies reporting on the implementation results of one or two budget

funded programmes. At the time of writing it was not possible to see an overall assessment of how far

the programme had gone in achieving performance budgeting nor future plans in this area. A limited

number of Corporate Plans have been produced which contain outputs targets but better

understanding is needed on how these output targets deliver the RSSED goals relevant to climate

change and the Green Growth Framework for Fiji recommended actions. A full set of corporate plans

for a range of ministries for any given year could not be tracked down, far less annual reports.

Transparency and accountability which includes consistent and accessible performance reporting is

important for a potential NCF as funds put into the Fund would be expected to deliver intended results

reported in a transparent manner.

The 2012 PEFA assessment16 was not available for review in researching this report, but the 2015

CPEIR reports that one of the conclusions reached is that aggregate fiscal discipline was deemed to

be improving. The introduction of ministry expenditure ceilings and the strengthening of controls on

expenditure commitments has improved budget management. The low variation of expenditure

outturns compared to the budget (data from 2010 – 2012) indicates good management and control of

the budget17 though this conclusion is based on aggregate figures which do not tell us about

differences in delivery performance by ministries or department. The PEFA assessment also noted

that budget execution reports and annual financial statements are prepared in a timely fashion and

data quality is acceptable. The CPEIR reports that the 2012 PEFA assessment concludes that Fiji’s

PFM system is centred on a set of relatively advanced budget and financial management rules and

structures around a clear legislative framework and the rules are well documented. Compliance with

these rules and processes in many areas is high. An important weakness in accountability is the lack

of effective legislative oversight which hinders the ability of external stakeholders to hold government

to account for performance (MoE, 2015).

16 PEFA is a methodology for assessing public financial management performance. It identifies 94 characteristics (dimensions) across 31 key components of public financial management (indicators) in seven broad areas of activity (pillars). 17 The variation between expenditure and budget was between 2.7 and 3.1 percent variation between actual expenditures and estimated (with actual being lower) (MoE, 2015).

29

The narrative is somewhat different when looking at another set of reports. The National Audit report

2013 contained a range of audit queries across all ministries and Departments regarding the reliability

of financial statements, regularity of financial transactions, functioning of internal control and

procurement systems. These audit queries appear to indicate that accountability for funds using

national systems is not at sufficient level to provide an assurance that funds are being used as

intended. Systematic follow-up on audit recommendations has been lacking, though this may be

changing due the recent establishment of the Public Affairs Committee.

The Public Accounts Committee is a new Parliamentary institution, which met for the first time in

2015. The PAC recently reviewed the audit reports 2007 – 2009. It highlighted systemic governance

issues, many of which are being addressed by MoE but some of which remained concerning in 2015.

Issues included the lack of the compliance of all accounts with FMIS, submission of an annual report;

reconciling cash transactions, having control systems in place for cash transactions. Staff across

agencies raised the issues that they simply did not have the human capital to do the most basic of

accounting and reporting tasks. It noted that the MoE, with the International Monetary Fund and the

World Bank, have gone through a process of integrity testing of the entire budget cycle and are now in

the process of finalising the reform plan for future accountability. 29 recommendations were made by

the PAC to the GoF including the following which are relevant to establishment of an NCF and which

could be taken up by Action Plan:

Recommendation 5: The office of the Auditor General to consider a performance audit of the

skills and education of finance officers within each agency and to provide recommendations

where further support or training is needed.

Recommendation 11: the MoE to appoint a project team to resolve or minimise all of the 29

systemic governance issues raised by the AG reports of 2007-2009. The project team is to

initially review all timelines and timetables of relevance to each issue to see if a smarter way

of accounting and reporting can help staff resolve the issues;

Recommendation 17: Establish a centralised database of all staffing workloads in all agencies

that is updated as close to real time as is feasible. This should include full time, part-time,

casual and temporary staff.

Recommendation 20: Develop new control system that make payments on projects based on

the actual delivery of the project.

Recommendation 21: all accounts must be covered by FMIS by year end 2015.

Recommendation 22: all agencies must submit annual reports in a timely manner.

Recommendation 23: All agencies must deliver reconciled reports that align with actual cash

in bank.

Recommendation 24: all agencies should immediately audit their ability to deliver an annual

report, participate in all FMIS and MoE requirements and to have internal controls to ensure

that actual and reported statements are accurate.

The recommendations in the Financial Management Improvement Plan are being prepared as part of

the EC budget support programme, but at the time of writing this was not publically available.

Accreditation to the international climate funds (Adaptation Fund and the GCF) requires certain

standards in budgetary and project management capacities. Table 7 shows examples of indicators in

four areas of public financial management and their read-across from the standards expected of the

MoE and the standards expected for National Implementing Entities (NIEs). For some countries with

fairly developed public financial management systems, such as Fiji, the effort put into strengthening

financial management and planning capacities in an NIE represents a missed opportunity to apply the

effort to the main national planning and budgeting process.

Table 7 Correlation between Public Financial Management Performance and NIE accreditation requirements

Public Financial Management Performance indicators

NIE accreditation requirements

Financial integrity and management

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Multi-year perspective in fiscal planning, expenditure policy and budgeting; Effectiveness of internal controls for non-salary expenditure

Produce financial plans and budgets; Manage and disburse funds efficiently and with safeguards

Institutional capacity

Competition, value for money and controls in procurement; Quality and timeliness of in-year budget reports

Procurement procedures which provide for transparent practices; Capacity to undertaken monitoring and evaluation

Project/programme management capacity

Orderliness and participation in the annual budget process Timeliness and regularity of accounts reconciliation

Ability to identify, develop and appraise projects; Competency to manage or oversee the execution of projects including supporting delivery and implementation.

Transparency and self-investigative powers

Scope, nature and follow-up of external audit; Comprehensiveness of information included in budget documentation

Competency to deal with financial mismanagement and other forms of malpractice.

Source: MoE, 2015

3.2.2 Performance management Clear procedures for monitoring and evaluation (M&E) and reporting are needed to provide

accountability of funds entrusted to the NCF. Consistent reporting is essential for transparency. KPIs

are a feature of government planning processes in Fiji established in the FMA and have the potential

to be an important integrative mechanism between the work of the Ministries and the national

development goals. Each Ministry undertakes to deliver a set of output and outcome targets and

progress against the indicators are reported in a word template and sent to MoE. Currently KPIs are

linked to the RSSED but the goals are likely to evolve once the National Development Plan is

published later in 2016. Ministries are expected to produce annual corporate plans and annual

reports, though many were not available at the time of writing this report. Because climate change is

a dynamic risk and the interactions with the baseline environment cannot be completely understood

nor predicted, adaptive management in policy and programme implementation is needed. A learning

culture needs to be fostered in order to design better policies and programmes. The ability of GoF to

learn from policy implementation is currently lacking. There appear to be limited knowledge

management and sharing systems in place.

Looking at the GCF monitoring framework for adaptation and GHG emissions mitigation, it becomes

obvious that the indicators which are most difficult to track are the adaptation indicators because of

the difficulty in defining and measuring resilience in outcome and capacity terms. For example, the

following indicators have been selected from the GCF performance framework for adaptation:

• Degree to which the funding contributes to climate resilient sustainable development

(qualitative/scorecard approach, includes the degree to which knowledge and learning are

achieved; the degree to which an enabling environment is created);

• Extent to which people in the affected area are made more resilient to climate-related hazards

(an index of composite indictors e.g. access to services, reduced risk of losses, enhanced

productivity)

• Number of physical assets built or modified to increase resilience to climate change

• Extent of ecosystem services generated or protected in response to climate change

• Number of climate information tools and services used for decision-making

A difficulty with some of these indicators is the cross-sectoral dependencies in delivering results such

as these, meaning that no one department or ministries may be entirely responsible for delivering on

performance targets such as these. This requires joint working among departments to deliver

indicators and targets such as these. For example, on the first bulleted results area, sustainable

development is a broad term that depends on evidence and sharing of data, information and learning

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from a range of ministries. The second bulleted results area is a composite index of information that

may be gathered by more than one department or ministry.

Baseline Information Results tracking requires good baseline information to compare against. Fiji requires a

comprehensive data collection in areas of surface water (streamflow), groundwater and water quality

monitoring matched with information on national water use, extraction and replenishing rates for water

resources. Information is important for integrated water resources management because the system

dynamics need to be better understood, i.e. the availability, behaviour, impacts and qualities of water

and how they interact with human activity. Flow in surface water is subject to not only climatic factors

but geology, vegetation and the impacts of development. Groundwater (GW) quantities and

behaviour should be understood. Public Works Department has the largest streamflow data where

urban water schemes exist, MoA some data on zone of tidal influence: irrigation and flooding.

Together their databases could provide a comprehensive foundation for streamflow on the larger

islands. Mineral Resources Department has data on GW quantities. Water quality data is more

scattered. Waste water discharge permits of DoE requires data on discharges to be collected

routinely. In addition the Ministry of Health collects data on drinking water contamination which may

include samples of water sources and academic institutions collect data on water resources. Data

collected, shared and integrated analysis carried out over time is necessary to show trends in problem

development, as the basis for identifying the appropriate solutions.

The risks posed by climate change to human health are not well understood by either the public or the

wider community of researchers. There are limited human and institutional capacities to collect and

manage health data in Fiji. Health data must be integrated with environmental and socio-economic

datasets to develop decision support tools for effective health adaptation. Surveillance activities are

still in large part fragmented and there is insufficient coordination among the various established

systems, as well as low capacity to interpret integrated data, and an inability of these systems to

provide timely data for immediate decision-making in Fiji. There is a need to strengthen integrated

environment and health surveillance systems e.g. disease surveillance systems on vector borne,

food, borne and water borne diseases are not linked to monitoring data on the carriers of disease:

vector surveillance, food safety and water quality (WHO, 2015).

There is hardly any planned forest management in natural forests. Management plans are non-

existent and the harvesting plans that are submitted by licensees are rarely based on sound resource

inventories. Estimates of the area of mangroves in Fiji is uncertain still. For management purposes,

Department of Lands needs to have access to a reliable and readily updatable capability for

assessing mangrove area and conversion. Neither Department of Lands nor Department of Forests

have monitoring capacity for mangrove management.

The data needs for forest management have been set out as follows in the 2011 Integrated Coastal

Management Framework of the Republic of Fiji:

Resource inventories and environmental profiles;

Mapping and GIS systems;

Remote Sensing;

Environmental Impacts Assessments;

Rapid appraisal techniques;

Benefit-cost studies;

Risk assessment;

Valuation of resources;

Habitat assessment techniques.

The need for data and information for sound coastal management decision-making include:

Areas of coastal erosion;

Changes taking place in mangrove areas;

Limits of acceptable change in major current and planned tourist areas;

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Marine invasive species;

Coral reef health;

Wetland circulation, soil and vegetation types;

Appropriate and effective pollution control measures for Fiji;

Marine-based pollution from vessels.

There are pressures on land which make it urgent to increase sustainable production per unit area,

but there is a poor understanding throughout the agricultural sector about a closer matching between

land use/crop type and land capability if productivity goals are to be met. There is a critical need for

an information system for land degradation. There have been previous scientific activities and

initiatives such as the soil surveys and soil correlation (i.e. classification of soils for the purposes of

agro-technology transfer and matching of fertiliser applications), but these efforts were not financially

sustainable (MoAFF, 2007). Land resources information such as geology, soils, land use capability

classification, climate vegetation, topography, water resources and the land tenure has been and may

still be available.

GoF is introducing a vulnerability self-assessment tool. Local communities are engaged in selected

areas to identify areas of vulnerability. CCU collects and maps the results. CCU has identified 600

communities to be under climate threat. Also a method to evaluate climate resilience at the

community level, though a set of indicators (WRI, 2015). This type of information is complementary to

the bio-physical data that should be collected to measure environmental system dynamics, set out in

Section 4.

The Green Growth Framework for Fiji recognises that it is not possible to manage what is not

measured and that is necessary for the government to strength the gathering and analysis of data to

support decision-making at the strategic planning level. It also acknowledges that damage to the

environment has been caused through data gaps in incomplete project appraisals. It posits that a

broader set of goals and indicators are necessary to track progress towards green growth, which

requires data gathering and monitoring capacity, storage and information sharing system and

mechanisms.

The 2016 budget allocated F$6.2 million (US$3.1 million), an increase of F$1.4 million, to hire 17

additional staff to strengthen the Fiji Bureau of Statistics analytical capacity to meet the increasing

demands for detailed, clear and accurate statistics and the development of new economic indicators.

This is additional to the funds allocated to the Strategic Planning Office (Climate change unit) for

hiring of new staff (see previous section).

3.2.3 Human capacity The lack of adequate capacity in the ministries and Departments in terms of the number of staff to

implement climate change and disaster risk management and the technical and project management

skills required for staff to be successful are the most binding handicap to the achievement of the

national goal (MoE, 2015). Retention of specialised skills is a particular difficulty.

Human capacity is critically important to achieving climate resilience. The various strategies in play

have good recommendations which are not implemented. Knowledge, skills, leadership and technical

skills are all constraining factors. For example, the 2020 Agricultural Sector Policy recommends agro-

forestry in upland areas, to be carried out with specific methods that are environmentally sustainable

(e.g. contour planting with specific species) but the human capacities need to be available to

implement this strategy correctly. Expertise in the areas of agricultural extension, soil conservation

and land use and environmental planning management and enforcement is below critical mass for the

responsible line ministries. The resources devoted to soil conservation are inadequate for the

implementation of significant measures either in terms of providing information or incentives. Fiji

Sugar Corporation has no staff designated as soil conservation officers and the institutional memory

of land husbandry practices is poor due to the current age structure requiring succession planning. As

a comparison, prior to Fiji’s independence, the Ministry of Agriculture, Fisheries and Forestry had

some 60 conservation officers between them (MoAFF, 2007). Similarly, it was reported that there was

only one qualified geologist with experience on GW in Fiji and in the region in 2007 (SOPAC, 2007),

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yet expertise is needed in hydrogeology, hydrologic modelling, environmental modelling and

assessment of ecosystems, estuarine and coastal zone modelling and assessment.

Ministries are given training budgets but they are small. For example, Department of Environment

has a training budget of F$10,000 (US$5000) per annum for a Department comprising 46 staff

members working across six Units.

4.2.4 Environmental and social safeguards EIA is a legal provision is contained in the 2005 EMA. It requires the EIA unit in the DoE to examine

and process every development proposal that is referred to by an approving authority and that may

have significant environmental or resource management impact. The EMA is supported by the 2007

EIA regulations and EIA guidelines published in 2008. Though the regulations and the guidelines

appear to be a good basis for environmental management, the weakness is that there is no

mandatory legal requirement for EIA in specified circumstances in the EMA. The specified

circumstances are contained in the guidelines which may or not be followed. Whether following the

EIA makes any difference to project design to ameliorate risks and maximise benefits needs further

investigation. On its own EIAs are not sufficient to prevent environmental degradation, there also

needs to be adequate levels of monitoring and enforcement, which is shown to be absent in the

strategies and plans reviewed for this report. Compliance with the letter and spirit of the regulations is

essential for the practical benefits to be derived from this legislation. There is documentary evidence

to show that EIA recommendations are ignored, and that environmental impacts are disregarded in

the pursuit of financial returns18. Training and awareness raisin is required at all levels to bring about

willing compliance with these legal requirements.

4. Financing strategy for the NCF

To achieve the global temperature goal of no more than 2oC average global warming, the

International Energy Agency (IEA) forecasts that incremental investment in the energy sector alone

will need to reach US$36 trillion over the period 2012-2050 or approximately US$1 trillion per year. A

2009 UNFCCC study of annual adaptation costs from 2005 to 2030 for five sectors estimated the

costs of adaptation between US$200- 210 billion. The World Bank estimated the costs of adaptation

to a 2oC world to be between US$85-121 billion per year now between now and 2050. This all means

that public finance alone cannot pay for the transition to a low carbon resilient future. Well targeted

public capital can be used to unlock private investment and can make investments go further. Given

the scale of the financing needs to respond to climate change, potential sources of financing should

comprise domestic tax revenues, private investment, development cooperation from bilateral

government agencies and multilateral institutions and a combination of public-private partnerships.

The goal agreed in the Copenhagen Accord at the UNFCCC Conference of Parties in 2009 was to

mobilise US$100 billion per annum by 2020 for adaptation and mitigation needs of developing

countries from a wide variety of sources including public and private, bilateral and multilateral,

including alternative sources of finance (UNFCCC, 2010).

To understand the sources of potential capital for the Fiji NCF, it helps to look at the global financing

picture for climate change. The private sector contributed the majority of renewable energy finance

globally: US$243 billion while public climate funds accounted for US$148 billion in renewable energy.

Most investment is through direct equity investment as shares and loans. Multilateral DFIs provided

84 percent of their commitment (US$40 billion) as market-rate loans or blended products with

domestic resources or money raised on the capital market. Earnings can be reinvested and

additional funds can be mobilised through co-finance (from commercial banks, development partners

or other international financial institutions), allowing DFIs to support investments that are much

greater than public funds alone can provide. They also supported risk management instruments

18 For example, spoil disposal from dredging in the Labasa and Rewa deltas is causing increasingly more damage to mangroves, but the Environmental Guidelines for Dredging are reportedly not used by either the DoE or LWRM (MMP, 2013).

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(credit guarantees, political risk insurance and contingency recovery grants) with US$1.5 billion; these

play a significant role in enabling private investments in a context of political uncertainty or in

challenging investment environments. Developing countries are playing a growing role in scaling up

green investment. Investment flows have grown at a rate of 47 percent per year compared to 27

percent growth rate in flows from OECD countries. This data does not capture private sector

investments in energy efficiency (estimated at US$90-365 billion annually); land use (forestry)

investments (estimated to be US$4.2 billion annually) or adaptation investments. An estimate of the

size of the green bonds market has been put at US$65.9 billion in 2015 going largely to transport

followed by energy, buildings, water, waste and pollution and agriculture and forestry (Climate Bonds

Initiative, 2015). Less than 10 percent of private finance globally was mobilised for adaptation.

(Buchner et al, 2015). Box 2 explains the different types of private investments and relative

importance globally.

Adaptation was mostly financed from public sources; this reached US$25 billion in 2014, but data is

uncertain because different accounting approaches are used for tracking finance. About half of the

financing is in the form of low cost loans and a further 10 percent in the form of grants. The data does

not capture domestic public budget for climate related development which could reach at least US$60

billion per annum, ranging from between 0-15 percent of national budgets.

Consideration of how private sector finance should be woven into a financing strategy for adaptation

and GHG emissions mitigation should be a key part of designing an NCF, e.g. Should measures be

financed through direct government support (considering also the mix between domestic and

international), direct private investment (equity investment), indirect private investment (investment in

bonds); and how much should be invested in the enabling environment: regulation, economic

incentives and the general business climate. The financial strategy will affect the cost to the tax payer

and reflect the role of government in the national climate change strategy.

Private actors and their investment profile can be categorised as follows:

Project developers: accounting for $92 billion (38 percent) of private sector flows to renewable

energy globally: around half of the financing flowed to inshore wind projects and originated from

and was invested in East Asia and Pacific region (46 percent) followed by Western Europe and the

Americas. Around a third of project developers’ investment flows was government investments in

China (Buchner et al, 2012). Other project developer flows are from venture capital, private equity

and infrastructure funds, and corporate actors.

Corporate actors (non-energy investors): $58 billion (24 percent) flowing to solar PV globally.

Commercial financial institutions (providers of debt capital): 46 billion or 19 percent: mostly for

solar PV and onshore wind in East Asia and Pacific and the Americas. Development Finance

Institutions (DFIs) have increasingly involved commercial local banks in on-lending or co-financing

energy efficiency, renewable energy and climate resilient projects. Commercial banks’ engagement

in climate action is critical given their important intermediary role in originating investments and

lending to corporates and households for small scale projects.

Households (family level economic units, high net worth individuals and their intermediaries): 43

billion or 18 percent: mostly into solar PV and thermal systems. Most of these investments took

place in China, Japan and the US, driven by policy support schemes and declines in installation

costs.

Private equity, venture capital, infrastructure funds, Institutional investors, pension funds,

foundations, and endowments: 2.6 billion. Active on both the debt and equity side.

Source: Buchner et al, 2012 & Bucher et al, 2015

Box 2 The private sector investment picture for climate change

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Not everything can or should be financed by tax revenues. Many commercial enterprises which seek

to adopt technologies for adaptation or low carbon emissions would also benefit from lower bills and

or increased productivity so there is a strong argument for these private benefits should be financed

privately. Where the upfront costs are high, there is a role for government to facilitate loan facilities

(working with the private sector) because of the desirability of these investments from the social

perspective. For public goods, which benefit everyone and for which it would be difficult to exclude

anyone from deriving benefits (so-called non-rival and non-excludable goods), there is a strong

economic argument for public funds to be used to finance the measures (for example investments in

natural or infrastructural coastal protection). For poor, vulnerable communities with limited means for

adaptation, there is a role for government to facilitate access to adaptation measures, for example in

working with farmers on adaptive technologies, to get them to a level where they can adopt the

technologies as part of their own livelihood strategies. And for resource efficiency, there is a strong

role for government regulation in promoting behavioural change. Thus the role for government (and

the strategy for interacting with the private sector), and the budget required for climate change

responses, is graduated and strategic. Leveraging ratios can be high. Public-private finance

mobilisation and leverage ratios can be reached of 1:5 to 1:8 (World Economic Forum, 2013).

Table 8 provides a conceptual framework for considering how adaptation and GHG emissions

mitigation can be financed, which is important to consider given the scarcity of tax revenues. The left

hand columns indicate measures which yield private benefits, the right hand column indicates

measures which are public goods (non-rival and non-excludable) and therefore benefit the population

at large.

Table 8 Categories of measures to manage climate change and the financing framework

Beneficiaries of climate change investments

Providers of climate change investments

Private Public

Private Example

Mitigation: renewable energy and efficiency technologies

Adaptation: cooling systems for households or private business

Finance: private

Examples

Mitigation and adaptation: sustainable land management Finance: public sector subsidy or

100 percent grant to reflect social benefits from the measures e.g. payment for ecosystem management services which will avert or reduce the costs of flooding.

Public Example

Mitigation: renewable energy and energy efficiency

Adaptation: re-location; ‘building back better’ housing

Finance: public sector subsidy or

100 percent grant to reflect social benefits from the measures e.g. greenhouse gas emissions reduction or lower costs to economic growth from disasters

Example

Mitigation and adaptation: mangrove replanting for coastal protection Finance: public

Source: Adapted from Tompkins and Eakin (2012)

A clear example in Fiji of adaptation measures that deliver private and public benefits is in the area of

sustainable land management. The actions of many hundreds of small scale farmers can lead to good

stewardship of the land or degradation of the land resource, with knock-on effects on ecosystem

function and increased vulnerability to extreme events. The public sector response would be a mix of

training, awareness raising, financial assistance with developing and trying out new technologies and

practices and changes to the regulatory and/or economic framework to promote progressive

practices, for example, lengthening land leases to create a more secure property right over the land in

question in order to encourage investment in soils, or a payment for ecosystem system where

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downstream users pay upstream users to manage the land sustainably. For any of these measures,

public funds will be needed to cover at least some of the cost of moving the farming community in

aggregate to more sustainable land practices.

The NCF financing strategy should hinge on this distinction: measures that deliver private benefits

should be funded by private funds; measures that deliver public benefits should be financed by public

funds; and measures that deliver private and public sector benefits should be financed by a mix of

private and public finance. The question for a potential NCF is how should it be positioned regarding

this framework: what and how should it finance projects that advance climate change objectives?

Public resources are limited in all countries across the globe, and, as explained above, private finance

needs to at the core of green growth transition. The NCF could essentially use private sector finance

models (blended with public funds where appropriate) to target investments in the left hand column

(Private beneficiaries) of Table 8. The NCF in Fiji could most easily attract investor finance through

money markets (i.e. bonds issuance) which could then be invested into clean energy and other

enterprises relevant to climate change,19 the most obvious being renewable energy provision but

there are others such as biofuel production, the creation of energy service companies to promote the

uptake of energy efficiency applications, or intelligent building design and construction, see Figure 2

for an indication of possible private sector investments relevant to advancing climate change. Low-

carbon investment initiatives of this nature could be aggregated into larger scale opportunities for

investment. Box 3 provides information on the Climate Bonds Initiative, for which the GoF could

explore partnership possibilities. Five of the world’s largest insurers called for governments to create

more climate-themed bonds so they can invest in such a market (Inderst et al, 2012). Private sector

investors could be international or domestic players. International debt finance could be attracted

from development finance institutions (i.e. concessional finance) or institutional investors. DFIs could

provide risk guarantees for green bonds issuance. Philanthropic funds have begun to plan an

increase role in recent years (Blader et al, 2014).

The NCF could also act as a broker for attracting equity investment into larger initiatives such as

renewable energy installations, though hurdle rates for renewable energy investments are often

higher than for traditional corporate investments (Kaminker et al, 2013) which could disadvantage this

strategy. Improving the regulatory and business investment climate is critical is order to provide high

risk- adjusted financial performance.

At the delivery end, public sector funds could be blended with business or household level private

investment to promote uptake of mitigation and adaptation technologies among lower income

households, See Box 4 for an example of a blended financing model designed in Uganda.

For public good investments indicated by the right hand columns of Table 8 (public beneficiaries),

public sector agencies may be attracted to a mechanism that delivers climate change objectives

efficiently and effectively through country systems. Budget support is a mechanism which has been

supported previously by donors and which is being initiated in Fiji by the European Commission (EC).

with an envelope of Euros 23 million for rural development, with the first tranche released already.

This indicates that country systems are deemed to be strong enough to account for funding given in

this way. Other donors also indicated a preference for budget support mechanisms eventually should

country systems prove to be robust enough to provide effective and accountable use of the funds.

Though the EC cannot put funds into a Trust Fund20, it is conceivable that the EC could direct funds in

a hypothecated manner to ministries for climate change resilience. The EC has committed 20

19 Fiji finances its budget deficit mainly through borrowing from the local capital markets by the flotation of medium and long term bonds and Treasury Bills, and has therefore long experience in attracting financing using this instrument. Fiji also borrows from offshore to finance its deficit. Fiji is the only Pacific country to have accessed the global capital market through two bond placements, which were well subscribed by international investors. Fiji has established a sinking fund for the repayment of these international bonds (MoE, 2015). 20 EU officer pers. Comm.

37

percent of its development budget to climate resilient development, signalling organisational mandate

to deliver on climate change objectives.

Accessing international funds for climate change is not easy, quick or particularly efficient.

International climate change funds are designed as project-based mechanisms with fiduciary and

performance oversight and accountability ultimately to the International funding source. The Fiji

Development Bank (FDB) is going through the process of accreditation with the GCF for up to a value

of US$10 million. The accreditation process began with the Adaptation Fund and took two years

before it was switched to the GCF where is has been on-going for just over a year, see Table 9 for

details. It is therefore arguable as to whether the international climate funds, as currently

implemented, are sources of easily accessible funding for climate change responses.

Table 9 Critical timeline of events for NIE accreditation in Fiji

Year Critical Events Discussions

2013 Commence work with Adaptation Fund (AF)

accreditation

- Received advice/suggestion from government on the opportunities with AF

- Work started but lack of direction/structure/support greatly hindered FDB’s progress

- Lack of clear guidance from AF and the understanding on what the process really involves

- “Fly-in” assistance from AF and partners was not value adding

- High turnover of staffs hindered work - Lack of awareness on ‘readiness’ assistance that was available as

FDB had to use own resources - Lack of ‘experience’ in dealing with adaptation projects (grants)

also contributed to the challenges

2015 Focused of accreditation work

changed to the Green Climate Fund (GCF)

- Change of focus driven by the need for strategic alignment to the broader government policies concerning climate change.

- The Ministry of Foreign Affairs nominated FDB as the NIE to the GCF in September 2015

- Change also driven by the replenishment concern of the AF

- Received assistance from the German Government for the ‘readiness’ program

- Realignment of proposed activities to mitigation (loans) and also explore the possibility of offering blended modalities to cater for adaptation projects i.e. FDB to capitalize on what it does best which is lending.

- Apart from capacity, main challenges also involve the development of required GCF policies such as gender, procurement, environment etc.

- Plans underway to setup a specialized unit within FDB to specifically focused on GCF issues

2016 Aims to be achieve accreditation by year

end

- Consultant now based with FDB for a limited timeframe to help them identified the required information

- Stage 1 of the accreditation is expected to be completed in September

- Submission of application to the GCF Board by end of this year

Source: Mr Jale Samuwai

38

Box 3 The Climate Bonds Initiative

The Climate Bonds Initiative is a non-for-profit organisation working on mobilising US$100 trillion

bond market for climate solutions. Climate bonds are infrastructure bonds tailored specifically for

financing climate solutions. Climate bonds, tied to specific climate change mitigation or adaptation

investments, allow governments to raise capital, or support the private sector in raising capital to:

Build renewable energy generation and its enabling infrastructure.

Widely implement energy efficiency measures in cities and industries.

Support adaptation measures that will boost the economic development of communities in the face of climate change.

Climate finance bonds can be categorised as ‘labelled green bonds’ and ‘un-labelled green bonds’

which in total represented US$597.7 billion of investment in 2015, an increase of US$95 billion on

2014. 32 percent of the increase came from the labelled green bond market. Un-labelled climate-

aligned bonds financing rail in China, India, France, South Korea and the UK contributed another

40 percent of the increase. Climate aligned bonds are investment grade, and denominated in 37

different currencies. Among commercial lenders, Credit Agricole was an early issuer of green

bonds responding to demand from the Japanese private placement market. Other banks issuing

green bonds are Bank of America, DNB (Norwegian Bank), National Australian Bank, Yes Bank

(India) and ANZ (Australia and New Zealand Banking Group), which are using proceeds to finance

a mix of renewable energy and energy efficient buildings. From the DFIs, the largest issuer of

green bonds is the European Investment Bank and the World Bank followed by the KfW (German

Development Bank), Asian Development Bank and Development Bank of Japan. The corporate

green bonds market is smaller and includes EDF (French Energy Company) among its issuers.

Investor demand in labelled green bonds in strong as indicated by oversubscription to recent green bond issuances. Investors have pledged to invest in a set amount of green bonds, e.g. Zurich Insurance, Deutsche Bank Treasury, KfW, Barclays Treasury among others. Numerous investor statements supporting the green bond market have been published. Because Climate Bonds are novel, government contingency guarantees or political risk insurance is deemed to be essential.

The Climate Bonds Initiative is developing policy proposals for all three sectors, including:

How to boost bank lending to renewables by adapting the $3 trillion covered bonds market to create renewable energy covered bonds.

Delivering on the promise of large-scale energy efficiency (e.g. getting to 85 percent of housing stock within 10 years).

Policy risk insurance for renewable energy bonds, to be provided by a consortium of governments.

The Climate Bonds Standard and Certification Scheme is a FairTrade-like labelling scheme for

bonds. It is designed as an easy-to-use tool for investors and governments that assists them in

prioritising investments that truly contribute to addressing climate change. Standards have been

developed for solar, wind and low carbon transport: rapid bus transit systems and low carbon

buildings. Climate bonds standard for bioenergy, geothermal, water from water utilities, low

carbon transport: rail, metros and hybrids and agriculture, land use and forestry are under

development and due for release soon.

Source: Climate Bonds Initiative 2015

Reference: Climate Bonds Initiative, 2015 report.

39

Figure 2 Universe of private sector climate change investments

Source: Adapted from Inderst et al, 2012

The Ministry of Economy could put domestic funds into the NCF to signal commitment and encourage

investment by development partners. For example, the newly established Environmental tax of 6

percent on services generates F$8 million per year (MoE, 2016b) equivalent to US$4 million per year.

Just taking 50 percent of this would provide US$2 million per year which could provide a valuable,

recurrent stream of funding to the Fund. The environment tax allocation to catalytic resilience building

would be a forward looking development investment, compared to the 2016 budget of F$3.8 million

allocated to disaster management, which is dedicated to cleaning up the effects of disasters.

Government funding of adaptation and GHG sinks is already demonstrated through budget

allocations towards REDD+ (F$100,000) and rain water harvesting (F$1.4 million) in 2016 (MoE,

2016). Domestic funding would have a good chance of leveraging capital from development partners.

These funds could go further if the funds were leveraged against Ministry budgets and a coordinated

policy process were initiated to determine how their spending plans contribute or detract from

resilience to climate change and the changes needed. Establishing an endowment fund would

provide a sustained baseload of financing. The NCF should establish targets on the capitalization to

signal that the GoF is serious about it; for example F$10 million in year 1, rising to F$50 million in year

5 and F$100 million in year 10.

Carbon revenues from offsets from the investments could be another source of finance. Observed

carbon prices span a wider range from less than US$1 per tonne of CO2e to US$137 per tonne of

CO2e. But most trades have been at a price lower than US$10 per tonne (Carbon Pricing Watch

2016). A new emissions trading scheme is starting up in China in 2017 and from October 2016 the

International Aviation Organisation is expected to decide on a carbon offsetting scheme starting in

40

2021. In addition results-based finance initiatives where emission offset investments are financed for

the purpose of reducing emissions rather than as a compliance mechanisms are gaining prominence.

The UNFCCC Secretariat estimates that the annual demand from results-based financing initiatives

could amount to 30 million certified emissions reductions. These initiatives include the Norwegian

Carbon Procurement Facility, the World Bank’s Pilot Auction Facility for Methane and climate change

mitigation, Carbon Partnership Facility, the Carbon Initiative for Development and the Transformative

Carbon Asset Facility. All these developments and many others of a similar nature could be sources

of demand for international carbon offsets. On April 22 2016 the United Nations Global Compact

called for a minimum internal carbon price level of US$100 per tonne of CO2e by 2020 in order to be

consistent with a 1.5 to 2oC pathway. This could mean US$75 million per annum for Fiji based on the

possible GHG emissions savings indicated in the country’s Intended Nationally Determined

Contributions (See Section 4.2.2 for details).

Box 4 Public funds unlock private finance: a cast study of adaptation in Uganda

4.1 The importance of the enabling environment Strengthening the wider enabling environment will be important to promote the development of a

project pipeline to the NCF, as well as attract private sector partnerships and finance to larger climate-

relevant investments, for example, independent power producers in renewable energy are attracted

by feed in tariffs for renewable energy. An enabling environment would also be important to promote

behavioural change and investments in technologies to combat climate change among the thousands

of households in Fiji, for example, removing perverse incentives to mangrove removal, removal of

incentives for land clearance for agriculture that involves heavy mining of soils or creation of

incentives for purchase of energy efficient equipment.

The Green Growth Framework for Fiji recognises that a major challenge to sustainably growing the

economy has been low levels of private investment which is affected by the business environment.

For example, the limited private investment in Fiji’s power sector to date is largely due to the following

i) lack of clear regulatory framework for encouraging third party electricity generation ii) resource

information not being made public iii) weakness in Fiji’s business climate. These constraints will need

to be addressed in order to full the renewable energy potential in Fiji and support future investments.

Northern Uganda: transforming the economy through climate smart agribusiness

This is an example of public funding stimulating private finance, venture financing and novel financial

instruments. It is expected that £44 million will leverage £39-79 million in private investment. In 2014,

DFID initiated the Northern Uganda – Transforming the Economy through Climate Smart Agribusiness

(NU-TEC) initiative which aims to support Northern Uganda’s transition from a region that has low

levels of development and is highly vulnerable to climate, to a wealth creating economy with higher

climate resilience through agribusinesses, crop diversification, replacing rain fed agriculture with

irrigation and development non-farm income sources. In 2014 DFID committed a total of £48 million

over the period 2014-2022. This includes:

£15 million is for TA to support the development of a climate-smart market and business model

for SMEs. These companies can then use their own balance sheet to investment in new

business opportunities.

£12 million is long-term capital provided through AgDevCo, a non-profit venture capital org that

provides early stage capital in the form of debt and equity to commercial opportunities in the

agricultural sector. AgDevCo works as a project developer and mitigates many front-end risks

that deter private investment.;

£10 million is for short and medium term capital to expand the financial sector’s range of

agribusiness financial services to the project target group. Borrowers may include traders,

cooperatives and farms. Private sector investors may also co-invest, providing leveraging to

public sector funds.

Reference: Brown et al, 2015

41

(MoSPNDS, 2014). Strategies to attract greater private investment were identified in the Green

Growth Framework for Fiji as follows:

Improving the regulatory environment for starting and operating a business;

Facilitating contract enforcement;

Investment incentives;

Strengthening infrastructure services;

Enhancing access to land, finance and financial services.

Specific policy measures to attract private finance into low emission and climate resilient technologies

and practices were identified as follows:

Table 10 Policy measures to leverage private sector investment in Fiji proposed in the Green Growth framework

Investment area Policy measures

Buildings National building code by end 2016

Incentives to support compliance with new building standards by 2017

Urban land use plan enforcing zoning and buffer zones for coastal areas, river banks, high risk areas and mangrove areas.

Capital budget appraisal guidelines to incorporate risk management Agriculture Incentives for organic farming and investment in greenhouse and hydroponic

technology by 2016.

Encourage development of PPP arrangements in operation collection centres/rural transformation centres by 2017.

Freshwater and sanitation

Demand management initiatives e.g. reviewing tariff rates, introducing rebates and incentives to encourage water conservation and promote water efficiency devices.

Energy Labelling awareness and extend the current system of energy labelling and minimum energy efficient standards to all equipment;

Economic incentives to increase energy efficiency;

Feed in tariffs or pricing framework in order to incentivise RE production;

Process for procurement of new large scale capacity from IPPs, pricing and other principles to be applied to all new power purchase agreements and grid connection standards.

Codes and standards for buildings and industry to provide among others minimum standards for energy use in ventilation, cooling and lighting;

Biofuel standards to facilitate the more economic development of indigenous biofuel resources such as coconut oil.

Technology development

Minimum product standards for imported household appliances;

Lowered or eliminated important duties on low carbon technology.

Tariffs on non-green technologies.

Reference: Fiji Green Growth Framework for Fiji

Fiji government does already use the tax system to encourage investment and deployment of new

technologies. For example, GoF has provided incentives since 2010 to facilitate the establishment of

the costs of water and sanitation projects; in 2011, GoF reduced the fiscal duty on the importation of

desalination and sewage treatment plans from 5 percent to 0 percent; until 2014, a 10 year tax

holiday was available to nationals who undertake a new activity in processing agricultural

commodities into biofuels as long as there was a minimum investment and a minimum number of

employees. A tax holiday is available to a taxpayer undertaking a new activity in renewable energy

and power co-generation. The Fiji Revenue and Customs Authority offers a range of tax incentives to

encourage the production of renewable energy and biofuels. It also offers tax incentives on

contributions to disaster relief fund.

Globally, private sector groups engaged on climate change are organised and have published public

statements on what they need from governments in order to contribute to the investment challenge for

greenhouse gas mitigation (see Box 5).

42

Box 5 Global investor statement on climate change, 2014

4.2 Climate change investment plans and costs The NCF would need to attract funds and this would be done more effectively if it could offer

investment plans that contained informed, site-specific, budgeted adaptation action plans with

estimated resilience or vulnerability reduction estimates attached to them, and credible delivery plans.

That way, investors would be given more confident that the money invested delivers adaptation

returns. National strategies and plans in Fiji have lists of priorities but none of these are costed and

sequenced into an implementation plan. Neither are there measureable targets for adaptation. Nor

are these coordinated and harmonised across Ministry plans and budgets which could pool scarce

domestic and international resources to implement investments that deliver climate change objectives

thereby using money more efficiently.

Many policy, institutional, capacity and practical investment needs have been noted in a range of

reports and strategies in Fiji. The question is how to prioritise; which of the many important policies

and measures should be done first. The proposal made in this report is that the Fiji Government

prioritises on the basis of quantitative targets for resilience and adaptation which it should set to

complement the renewable energy targets indicated in the country’s Intended Nationally Determined

Contribution report (INDC) to the UNFCCC. Once those targets have been established (for example,

sedimentation levels washing down from upstream catchments reduced by 75 percent), an

assessment of the underlying problem causality should be carried out, and a detailed solution

analysis and pathway should be developed, which should include a critical examination of changes

required in the institutional structures responsible for delivering the solutions. In other words, the goal

should frame the strategy which should determine the measures undertaken. The following section

presents what is known about adaptation and GHG mitigation strategies and costs in Fiji.

4.2.1 Adaptation plans in Fiji and cost There are no national adaptation targets and there is very little information on the costs of adaptation

in Fiji. Policy makers will be faced with choices about whether to address an area of vulnerability

though ecosystem management, economic policies (natural resource pricing is one example);

rectifying perverse incentives that increase vulnerability to climate change; or infrastructure

investments. The cost, effectiveness in reducing the risk and/or building resilience and the risk of

The statement was signed by 407 investors representing more than US$24 trillion in assets. It

recognises that while current investments in clean energy alone are approximately $250 billion

per year, that the International Energy Agency estimates that at least $1 trillion per year of

investments are needed between now and 2050 in order to limit the global temperature increase

to two degrees above pre-industrial levels. It called for governments to:

Provide stable, reliable and economically meaningful carbon pricing;

Strengthen regulatory support for energy efficient and renewable energy;

Support innovation in and deployment of low carbon technologies;

Develop plans to phase out subsidies for fossil fuels;

Ensure that national adaptation strategies are structured to deliver investment;

Consider the effect of unintended consequences from financial regulations on

investments in low carbon technologies and in climate resilience.

The following investment groups are represented in the statement:

Asia Investment Group on Climate Change (AIGCC); Investor Group on Climate Change

(IGCC) comprising 52 Australian and New Zealand institutional investors and advisors;

Institutional Investors Group on Climate Change (IIGCC) comprising 90 members representing

some of the largest pension funds and asset managers in Europe; Investor Network on Climate

Risk (INCR) comprising 100 members.

Source: http://investorsonclimatechange.org/statement/

43

unintended consequences are all considerations in identifying investments and developing an

adaptation strategy. Central to the costing exercise is what the role of government should be

(implement directly or through others, develop regulation and enforcement capacity; establish

economic incentives, training and capacity development), how it should interact with the private

sector. A second choice area would be how to sequence adaptation measures since not all

adaptation measures can or should be undertaken simultaneously.

One analysis was recently carried out to compare the costs of protecting Lami Town in the Greater

Suva area with ecosystem-based options versus engineering options and for two combinations of

both types of options. The analysis shows that for all for adaptation scenarios implemented at

suggested locations in Lami Town, estimated benefits ranged from FJ$8 to FJ$19.50 for every dollar

spent on coastal adaptation based on a 20 year timeframe, using a 3 percent discount rate. The

highest benefit-cost ratio was for ecosystem based options with an assumed damage avoidance of 10

to 25 percent. Hard infrastructure interventions would be more likely to be provide 25 to 50 percent

effectiveness in damage avoidance. Box 6 has the details of the cost benefit analysis. Important to

note is that adaptation will not and cannot reduce damages to zero – there will in most cases be a

residual cost to bear. The main issue regarding this is to ensure that development plans and the

implementation of those plans minimise the residual costs that can be expected, e.g. by respecting

land-use plans, and that households to be helped to have the means to recover from the impacts and

continue with their lives and livelihoods. The methodology used in this cost benefit analysis can be

applied to any development area. For example, in the health sector, a cost benefit analysis would

need to consider i) the costs of health damage due to climate change (the ‘do nothing’ comparator) ii)

the costs of the health sector adaptation and iii) the benefit of spending the money on the adaptation

option, which can be calculated as the cost of health damage averted.

With experience over time, Ministries could develop cost-output benchmarks for allocation of budget

to climate change resilience which could also convey clear information about cost-return schedules

for potential investors to the NCF. The adaptation investments plans should be developed within an

overall framework of national adaptation targets and a clear idea of the pathways chosen to deliver

the targets. Of course, there is a lot of uncertainty in whether the pathway chosen is correct and

whether it will deliver the benefits expected (i.e. how environmental and economic systems will

respond to investments made), which is why monitoring and evaluation of the resulting causal results

and ultimately effects on people is so important to inform future planning processes.

44

Box 6 Case study: Details of cost benefit analysis of adaptation options for Lami Town

Table B1 contains the unit costs of adaptation options for Lami Town over a 10 and 20 year time frame,

calculated using a discount rate of 3 percent over time. The difference between ecosystem-based

adaptation options and the infrastructural options is vast.

Table B1 Unit costs of adaptation options for Lami Town, Viti Levu

Adaptation options Unit cost Cost in FJD

10 y 20 y

Replant mangroves m 2 2.76 4.67

Replant stream buffer m 2 2.88 4.87

Increase drainage m 16.29 20

Build sea walls m 1,670 2050

Reinforce rivers: Protect river banks Dredge rivers River realignment

m m 3

m

1144 18.52 923

1404 22.72 1133

The benefits calculation comprises of two elements: the avoided damage of the hazard event and, for

investments in ecosystem-based options, the ecosystem services provided by mangroves, coral reefs,

mudflats and sea grasses, upland forests and streams. The Fijian dollar value per hectare annually of the

direct and indirect ecosystem services were calculated to be as follows:

Mangroves: 158,920

Coral reefs: 658,487

Mudflats/seagrasses: 70,470

Upland forests: 8057

Streams: 1950

The cost of damage avoided per dollar spent in indicated in Table B2. The benefits outweighs the costs

for all options. The specific amount of damage avoided by any one option will depend on how and where

the options are implemented as well as the characteristics of the hazard event. Not all options are equally

effective. Some of the least expensive options would most likely avoid less than 10 percent damages

while other options that may be more expensive could potentially avoid more than 25 percent of

damages.

Table B2 Cost of damage avoided per dollar spent on each adaptation option Adaptation option Assumed percentage of damage avoided – FJD per F$ spent

50 percent 25 percent 10 percent

Replant mangroves 77 38 15

Replant stream buffer 146 73 29

Monitoring and enforcement 1498 749 300

Reduce upland logging 2035 1018 407

Reduce coral extraction 2988 1498 598

Build sea walls 15 8 3

Reinforce rivers 96 48 19

Increase drainage 140 70 28

There are large data gaps regarding both the costs and effectiveness of different adaptation options,

limiting the support of informed decision-making. For example, a high resolution elevation of Lami Town

(including bathymetry) should be developed in order to further identify priority sites for adaptation action,

to enable storm surge and flood modelling and to develop flood height damage curves in order to inform

a site-specific adaptation plan. Other adaptation options could have been included in the analysis such

as policy options (rezoning, regulating land tenure of informal settlements etc.).

Reference: Rao et al, 2012

45

The other source of costed resilience building plans is the recent disaster recovery plan for TC

Winston which struck Fiji in January 2016. The full cost of restoring and enhancing damaged assets

and of restoring lost production flows has been estimated to exceed $1.96 billion (US$98 million).

The total projected cost of the Recovery Programmes has been estimated at F$731 million (US$365.5

million) over the period mid-2016 to mid-2018. One concern is that much of this recovery plan is

about rebuilding of infrastructure which, given the need for construction materials and without proper

land use and sustainable extraction of materials, could undermine ecosystem resilience (See Section

2 for details), thereby creating a negative feedback loop between one disaster and future events.

Table 11 Projected Cost of Recovery Programmes by Recovery Priority – F$ million

Recovery Priority Total Budget Government Donor Unmet

(Financing

Gap)

Priority 1 -- Rebuilding Homes (30,369 homes) 183.94 72.14 0 111.80

Priority 2 -- Restoring Livelihoods (agriculture

and fisheries)

169.65 36.07 9.89 123.70

Priority 3 -- Repairing and Strengthening

Critical Infrastructure

S353.39 25.79 12.04 315.57

Priority 4 -- Building Resilience (relocation of 48

villages or 2255 households; repair and

reconstruction of infrastructure and

investment in ecosystems).

23.88 0 0 23.88

Total 730.86 134 21.93 574.95

Source: Ministry of Economy Estimates, 2016

4.2.2. Greenhouse gas emission mitigation plans and cost The national target is to achieve 100 percent of Fiji’s population served with electricity (from the

current 80 percent) from renewable energy sources and to bring down reliance on wood fuels for

cooking to 0 percent by 2030 (INDC, 2015). The average investment that will be needed to achieve

this is estimated at F$50 million (US$25 million) per annum for 15 years, totally US$375 million. The

total amount of carbon emissions saved by 2030 is 500 Gg (500,000 tonnes) per annum21, taking into

account population increases and economic growth over the period. The additional reductions from

adoption of energy efficiency measures by 2030 is estimated at 250 Gg per annum (10 percent of

2030 emissions) (GoF, 2015). However, the Fiji Energy Policy notes that there is no business plan for

how to reach the last 20 percent of non-electrified communities especially given low affordability

levels. Government-funded rural electrification schemes are heavily subsidised, the community

models often lead to deterioration and inoperability of the systems.

There is no national target in relation to avoided GHG emissions from forest removals nor a costed

strategy in this area. In 2010, the Fiji national carbon stock of indigenous and plantation forestry was

estimated as being 192.27 million tonnes of CO2e. The estimate could be on the low side and efforts

are being made to improve the data quality. The main emitter in the forest sector is logging.

Regulating logging intensity and the reduction of avoidable timber waste potentially leads to avoided

emissions of 165,000 tonnes CO2 per year (Haas, 2015)22. Fiji has a large of degraded and under-

utilised land with potential for afforestation and reforestation to increase its carbon stock.5. Feasibility

assessment

21 In 2013, the electricity sector emitted 340 Gg. 22 Emissions from deforestation are estimated at 33,000 t CO2 per year, due to less than 0.1 percent

annual forest cover loss.

46

5 Feasibility assessment

At a technical level, establishing an NCF in Fiji is feasible: the country has an enabling Financial

Management Act through which GoF could quickly establish the basic legal and financial framework

needed for the Fund, financial management and performance tracking systems are in place, as well

as some enabling legislation, and experience in running investment Funds. There are also on-going

reform processes for financial management, the legal framework and the civil service which could

benefit the establishment of an NCF. What is critically lacking is two things: i) political leadership for

this idea and ii) evidence-based and costed adaptation plans and targets to complement the national

GHG emissions mitigation targets. The Ministry of Economy needs to champion the structure and

operational modalities. It should also agree to invest tax finance in the Fund, both to signal

government intention and commitment to the fund and to build trust among partners.

5.1 Assessment framework The framework for assessing different design options has been structured around the basic question:

Will the NCF alleviate a problem and/or will it create new problems? The worst case scenario would

be one where the baseline problems are not solved and new problems are created. The baseline

problems that were scoped out during the preparation of this report are as follows:

1. Low amounts of financing for resilience building initiatives and for low carbon development;

2. Project-based aid which is a slow disbursement modality and undermines country planning

systems and policy leadership by Government ministries;

3. Low absorptive capacity in government;

4. Weak sustainability of projects,

5. Lack of integrated sector planning leading to unresolved environment/development problems

The main benefits from the establishment of an NCF could be the following:

Table 12 Main benefits expected from the NCF

Brokerage & guidance

Reduce transaction costs in accessing international funding flows;

Develop specialised skills for climate change programming;

Effectiveness Create a streamlined process for channelling of large scale flows of climate finance;

Incentivise & strengthen a coordinated and integrated sector planning process (horizontal and vertical);

Strengthen country planning and budgeting systems;

Attracting funds

Attract climate finance.

The NCF could complement current resource mobilisation efforts by ministries, which currently have

their own bilateral relationships with development partner for funds and technical assistance. It would

be desirable for this to continue as the technical assistance helps to improve planning systems and

the evidential base for planning. The NCF would be complementary by channelling larger scale flows

to support ministry spending plans.

New problems which the NCF could create were scoped out during the consultations carried out for

the development of this feasibility assessment. The main risks were identified as follows:

Table 13 Main risks from the establishment of an NCF

Inefficiency (costs)

Could lead to greater institutional fragmentation (costly);

Create more bureaucracy;

Over-burden management and planning systems;

A distraction from the main civil service reform process;

Creating parallel planning systems;

Ineffectiveness Anti-mainstreaming;

Lack of political commitment;

Will funds be protected for intended purpose?

47

Delivery through government systems.

Attracting funds Where will funds come from to support it?

Some or all these risks can be reduced or eliminated with proper system design and an appropriately

designed action plan for establishment of the NCF.

Table 14 sets out the basic design results that would be expected from different design choices for

the NCF. The best case scenario is Type 1: where the old problem is solved and new problems are

minimised (for example, minimising bureaucracy, costs, delays and lack of transparency in decision-

making). The worst case scenario is Type IV: where the old problems remain unsolved and new

problems are created.

Table 14 Typology of NCF design consequences

Old problem

Solved Unsolved

New problem Minimised I II

Maximised III IV

Reference: Bowornwatha, 2004

5.2 Main design options The two main design options are a fund held by government or a bank. Both could direct funding to a

set of agreed priorities within or outside the regular government planning framework of the country.

Both could attract international private sector financing, The bank could, in addition engage with the

domestic private sector in a wider range of financial strategies in order to promote GHG emissions

reduction and climate resilience. The details now follow.

Option 1a. NCF located in MoE; funds distributed as hypothecated budget support. The NCF is

linked to government budgetary systems from MoE to ministries. It would be hypothecated in the

sense that the funds would be for specific adaptation/resilience or GHG mitigation outcomes and they

would have to be coded appropriately in the government Financial Management Information System.

Reporting would be through the regular KPI system which mandates quarterly reporting (output

indicators) and at mid-term and end of term for investments (outcome indicators). The financing

would be linked to sector plans. In order for the financing to flow to climate change priorities and to

improve results on the ground, sector plans should be evidence-based and reflect consistent

objectives across sectors. Getting consistency across sector plans necessarily means that sector

plans would need to be opened up for scrutiny by a wide range of stakeholders in a consultation

process and agreed sectoral objectives and revised as necessary.

Option 1b: NCF located in MoE; funds distributed as projects: this is similar to option 1a except

for one key detail: the planning integration does not happen at sector level but in the development of

a national adaptation plan and GHG mitigation plan. In other words, the financing would be linked to

the National Adaptation Strategy and a National Mitigation strategy rather than to sector plans. But, as

discussed in Section 3.2.2 this is probably not an effective way of building resilience across the

economy because the adaptation plans are incomplete and attempting to rectify this through a

planning process creates a parallel planning process which risks overburdening planners and creating

more bureaucracy.

Figure 3 illustrates each of these two designs and Figure 4 presents a graphical risk and benefits

analysis.

48

Figure 3 NCF at the MoE: 2 designs

Hypothecated budget support

Project-based mechanism

Option 1a: hypothecated budget support can be classified as a Type II design type (see Table 14): it

does not create new problems but neither does it completely solve the old problems, one of them

being attracting large scale funds. It does serve to correct baseline problems 2 to 5 listed above.

This design option implies a much deeper reform of re-aligning ministry plans, budgets, structures and

capacities according to the priorities that have been scoped out in many natural-resource based

strategies, so that funding is directed to evidence-based investments that have harmonised

objectives. With political will and financial support dedicated to making it happen, the evidence

indicates that this would produce longer-lasting and more effective results for climate change

resilience. But politically this is a more difficult pathway to follow as it challenges power structures

and requires cultural change, for example, in changing a planning system so that open sharing of

data, information and ideas is promoted within and between ministries.

Design option 1b is a project based system design which can be classified as a Type IV NCF design.

The project-based mechanism does not improve the projectised baseline situation nor does it resolve

problems 3 to 5 listed above. It potential creates new problems because of the required parallel

process of planning, supervision, reporting and environmental and social safeguards, which is

especially costly a country with limited planning capacities. The responsibility for selecting project

proposals and arbitrating between submissions would fall to the NCF team with implications for the

transparency of decision-making.

This options avoids the root and branch re-orientation of plans, budgets and ministerial structures

needed to direct funding to investment priorities. But the resilience building effect will be much

smaller because of the lost opportunity to leverage domestic budgets and ministry time and focus and

49

because regular development processes may be complicating factors to achieving results. Disaster

impacts will continue and budgetary resources will continue to be needed for response and recovery

and may become larger towards the middle of the century as the climate signal grows stronger.

Development results will be regressed with every disaster event. The NCF would still need costed

plans with an estimated climate response benefit attached to each investment, as well as

implementation mechanisms.

The project based system could work over the longer term if there are good learning and knowledge

management systems operating in government ministries that can take the results from the resilience

building projects implemented in the adaptation strategy and incorporate the results in future iterations

of Ministry Corporate plans and medium-term development plans; AND a participatory planning

process could be executed to ensure that the climate change solutions identified are supported by

knowledge and experience. Under this scenario, and assuming political commitment to continuous

improvement and a realignment of budgets, mainstreaming could take between 5 and 10 years,

reflecting the time it takes to generate results from investments and to incorporate these results into

the planning cycle.

The benefits and risk analysis for these two options is indicated in Figure 4 below. Designing the

NCF so that it supports country systems through a hypothecated budget support system yields many

of the potential benefits and minimises risks but locating the NCF at the MoE means that more private

sector approaches at the delivery end of implementation will be missed. Stakeholders consulted into

the development of this report also were concerned with a potential risk of funds mis-management.

Designing the NCF as a project based mechanism raises more concerns around the creation of

bureaucracy and failing to strengthen country planning and budgeting processes as explained above.

More of the assessment criteria in Figure are indicated as red in the Figure 4.

Figure 4 Benefits and risks from the two design options

50

Option 2. NCF in a bank; ‘Multiple avenues’ approach: Under this approach, the NCF would be

located in a Bank which would enable it to provide a different offering than grants or budget support.

It would also mean that the Bank could have a direct relationship to third parties in implementing

climate change-relevant investments. As in Option 1, resilience investments could be injected into the

national consolidated budget as per Option 1a (using country systems) or they could be linked to a

National Adaptation and low carbon strategy and investment plan as per Option 1b (country planning

systems are bypassed). With greater fragmentation in the institutional architecture comes greater

coordination and oversight costs. .

Figure 5 illustrates each of these two designs and Figure 7 presents a graphical risk and benefits

analysis.

Figure 5 NCF at a bank; Multiple avenues for supporting investments

2a. Supporting ministries through budget support

51

2b. Supporting ministries through projects

Option 2a could be described as a Type 1 design type: potentially it solves the old problems 1 to 5

and, with good design, need not create new problems (as per Table 14). The NCF would be located in

a bank where it could be tasked to deliver a range of financial products to households and business

as well as disburse funding to third parties such as civil society organisations, as well as performing

as an intermediary in channelling international funding to ministry climate-responsive spending plans.

Option 2b system design could be classified as a Type IV NCF design type, for the same reasons as

indicated in design option 1b – mainly because it would work through a project-based mechanism for

channelling funding to government ministries. The benefits and risk analysis is as follows.

Figure 6 Benefits and risks from the two design options

52

Design option 2a is clearly a safer bet that Design option 2b. Channelling funds for adaptation through

government systems could create the driver for strengthening integrated development plans, creating

resilience in domestic spending and avoided the creation of planning systems. Therefore option 2a

avoids the risks and creates added value to the baseline planning situation. The downside with this

option potentially is bureaucracy. Another decision-making entity and decision-making process (in

relation to third party funding of proposals) is added to the mix, the additional bureaucracy added

depends on how those decision-making processes are designed. For example, the number of

institutions represented at Board level and the degree of automation in the project approval process.

As the analysis above shows, as one goes from a country systems approach to the project approach,

the less likely that the old problems can be solved and the more likely that new problems will be

created (Type IV reform). Therefore the net cost of establishing the NCF will increase. The other

main difference is where the NCF should be located. Hosting the NCF in the Bank potentially is able

to reach more people and business by rationalising the distribution of funding through different

financial products thereby getting past the absorptive capacity issue and allowing funds to go further.

A Bank option allows Fiji to lend out to the private sector for clean energy and/or adaptation

technologies. There are possible green economy benefits from working with and through the private

sector. Therefore the design of the NCF should seek to incorporate funding flows through country

systems with the flexibility of designing strategies to capture private sector funding flows and design a

financial product offering that maximise the reach of the Fund23.

There is a clear added value in the proposed NCF if it were designed to strengthen country planning

systems. It could provide clarity over climate change investment information, it could provide a much

needed driver for coordination between government and development agents, it could drive the

strengthening of delivery systems and better delivery performance.

Design option 2a addresses the principles and objectives for the Fund which were indicated as

important by stakeholders during the mission consultations. The recommended principles were as

follows:

Principles:

transparent;

accountable;

23 This was in fact the adapted system design that was developed during the stakeholder consultations.

53

effective;

accessible;

streamlined;

Independent under its own statute;

Sustainability of funding – long term;

multiple mechanisms;

blending finance and supporting additionality and focus on upscaling;

one common goal: CCA strategy and investment plan.

Avoidance of bureaucracy was a repeated concern among stakeholders in bilateral interviews.

Processes to access funding should be transparent and expedited.

The objective statements determined by stakeholders in the consultation workshop held during the

feasibility assessment process were as follows:

Objective:

to ensure that funds are accessible and effectively and efficiently utilised for its intended

purpose;

to establish a sustainable NCF that is accessible to both public and private sector towards

achievement of common goal;

to promote country-led, climate responsive governance.

For all design options, good learning and knowledge management systems would need to be

operating in government ministries so that they can take the results from the resilience building

projects implemented in the adaptation strategy and incorporate in future iterations of Ministry

Corporate plans and medium-term development plans.

5.3 Recommended design The following sections discuss a recommended design for a potential NCF based on the preceding

analysis in this report. The proposed structure has been put together to have the greatest chance of

attracting funds, to distribute funds in an equitable and rational manner and to lead to effective results

on the ground. A two pronged strategy is recommended on the delivery strategy.

• 1st prong: Bank facilitated NCF to climate change responses in private sector and civil

society: Have the NCF located as a Trust Fund in a bank that is able to access private sector

investment flows internationally and nationally and that is able to design financial products for

adaptation and GHG mitigation technologies for private individuals and entities, reflecting the

private benefits the investments can deliver. In addition, establish a project modality that can

engage third parties contractually and directly, through a small or medium grants window in

order to promote innovation and quick results on the ground. The Bank does not need to be

an accredited entity to the international climate funds if it can access funding from other

sources such as Multilateral Development Banks and international private sector finance (see

Section 4 on the financing landscape globally for climate change and the potential of climate

bonds)

• 2nd prong: Government planning systems to facilitate climate change responses: Work

towards a hypothecated budget support mechanism that can be adopted within a 10 year time

period. This is in order to move away from the project modality that is currently prevalent in

Fiji to a country systems approach that is able to absorb larger scale flows and to fund multi-

year continuity of investments. The public international funds could be disbursed through

government systems directly, using a specific code in the FMIS system for tracking funds and

the Fiji government KPI system of reporting back results. Taking this approach would not

constitute a Fund (unless absorptive capacity was low and funding amounts high) as much as

a facility. It would enable international public funding to finance resilience and adaptation in

Fiji in an effective and efficient way. For example, instead of having to agree a partnership

agreement for every climate-related project, one MOU could be agreed with the relevant

ministry indicating agreed results to be delivered. This facility could strengthen the role of

54

Ministry of Economy, through the CCU, in the coordination of climate change policy

implementation as well as in strengthening the technical aspects of budget preparation. A key

part of this programme would be to establish a research programme to target the most urgent

gaps in the evidence base in order to inform adaptation plans.

Within this 10 year time period, the aim would be to build efficient and effective delivery systems so

that funds can flow to the intended investments. Start small: In the interim carry out the work needed

to develop the information, structures and capacities needed to plan and budget for natural capital,

social and resilience investments. The programme would start with the ministries involved in land-

based management: agriculture, lands, forestry, infrastructure, i-Taukei land Trust Board etc. The

analytical products would be discussed and agreed within and between departments and ministries

and would be packaged as projects for financing. This phase may take two years from start to finish.

The next step of designing ministry plans and budgets, performance frameworks, skills development

and departments restructuring where necessary would follow. This phase may take another two

years. Implementation of investments through government structures, designing partnership

agreement with NGOs and CSOs and private sector organisations, strengthening monitoring and

evaluation capacity over implementation processes, and compiling performance reports could take

another four years. Meanwhile annual plans and budgets are developed as part of routine

government business, which should be informed by analytical products commissioned in a continuous

process by the given ministry.

GoF financing should be used to finance some of the costs in the mainstreaming process and to

finance some strategic cross-sectoral implementation investments. It would be helpful to find a

strategic partner to provide financing for this interim phase.

A Board would be required for the Trust Fund held at the bank. A review of national funds for

conservation indicates that the Board should be composed of a diverse range of stakeholders but not

too many so as to facilitate decision making. This participatory structure means that funds are more

likely to be distributed fairly. (Bladon et al, 2014).The composition of the Board is critical to ensuring

the Fund is managed and used as intended. The entire Board should receive solid and professional

training on key technical concepts in order to make informed decisions. Fund should not be seen as

competition to Government but a mechanism to support development strategies.

In terms of staffing costs, working through country systems is the most cost effective approach since

country planning and implementation structures and processes would be used as the planning and

implementation mechanism for the NCF. Going for a project-based mechanism will be expensive.

One analogy can be drawn from the Global Fund for AIDS, TB and Malaria in the Ministry of Health.

A unit set up for management of this Global Fund in Fiji has a team of 11 people, managing a budget

of F$20 million to F$30 million. Climate change costs in the areas of low carbon development and

adaptation could be several orders of magnitude higher requiring a much larger Secretariat to handle

these larger flows. .

5.3.1. Monitoring, evaluation and learning The adaptation and GHG mitigation plans should have costs and quantified climate results attached

to them. This is in order to provide certainty to international investors as to what their financing will

deliver and to help the implementers stay focused on results delivery. Delivering resilience results is

an uncertain business as there are many factors that can mediate the implementation process.

Monitoring and evaluations will be particularly important. Over time, it should be possible and indeed

desirable to develop output benchmarks that can help the interactive process of planning and budget

preparation and allocation. For example, sustainable farming practices costs F$x per hectare or

costal protection through ecosystem approaches costs F$x per km of coastline or building 1km if

roads with minimal disturbance to ecosystem function costs F$x. With data collected on loss and

damages from extreme weather events, it should also be possible to link these output benchmark

data with social impacts to begin to develop an adaptation net cost/net benefit curve. This will

ultimately serve to improve the evidential basis of sector development plans and budgets, which

should have a material impact on development results.

55

The learning element is essential. As indicated earlier, budgets in Fiji are currently determined

incrementally based on previous year allocations. The budget therefore does not reflect policy

priorities, even if these were correctly identified in departmental spending plans. As discussed earlier,

there is a great deal of fragmentation in government departments which a poor record of coordination

and joint planning. For improved resilience to climate variability and change planning efforts must be

improved. It is suggested that an improved focus on data and information and greater internal

learning processes about what works and why will help in the process of planning for climate change

resilience.

6. Action plan for establishing the NCF

This action outlines the actions needed to establish the NCF as per the recommended design outlined

in the previous section. These actions are in relation to strengthening the key elements of the

institutional system, as described in Section 3: supportive legislation, policies and strategies and

public financial management, performance management, human capacity and environmental and

social safeguards. It is proposed that this action on the second prong of the NCF relating to

government planning systems should be delivered in one geographical area: a set of Districts relevant

to the effective functioning of a watershed to be selected according to criteria such as a committed

local government leadership and willing communities to participate. The timeframe for this part of the

programme would be over eight years working on the pilot, area-based approach with another two

years dedicated to scaling up to the sector level. This approach is likely to require extensive

institutional reform, e.g. organisational restructuring so that ecosystem and climate change linkages

are more effectively addressed across economic development strategies. This proposed Action Plan

is in line with the Actions scoped in the National Climate Change Policy and the Fiji Green Growth

Framework for Fiji.

This action plan has a tentative budget estimated for it which should be revisited in a detailed design

phase of this Action Plan should this work progress.

The actions are determined as follows.

1. Establish national adaptation targets that are based on addressing exposure and underlying

sensitivity to the risk as well as building adaptive capacity.

Prong 1: Bank-facilitated NCF for climate change responses

2. Determine which share of the national GHG emissions mitigation and adaptation (‘climate

change’) targets can be delivered through the private sector in pure and blended financial

products;

3. Determine the strategy for engaging a partner bank to provide financial services to deliver the

share of the targets. This should include the financial strategy for the government to co-

finance financial products as necessary, reflecting the public benefits share of total benefits

derived from the policy measures;

4. Determine the best mix of policy instruments which could be established to send policy

signals to households and businesses to invest in low carbon technologies and climate

resilience;

5. Develop the strategy to engage with the international private sector and multilateral

development banks;

6. Develop the strategy, funding rules and procedures for engaging with third parties such as

NGOs and academic institutions. The strategy should be designed to contribute to delivering

the national targets on adaptation and GHG emissions mitigation as well as to generate

learning that could inform and progress national policies and plans

7. Set up the Board to oversee the NCF with a Terms of Reference, rules of engagement,

technical guidance and a programme of technical training for Board members.

8. Develop a strategy and campaign to raise public awareness and understanding of climate

change, how it interacts with everyday economic processes in the country and where the

56

solutions to deal with the problem lie. This activity could pick up the idea of supporting

biennial natural resource summits included in the Green Growth Framework for Fiji. The aim

would be to generate demand for the Bank financial products.

Prong 2: Government planning systems to facilitate climate change responses

9. Determine which share of the national adaptation targets can be delivered by a range of

public sector policies and measures. For example, if one of the national targets is achieving

access of 100 litres per person per day throughout the year for all households now and to

2050, then one of the key measures might be effective metering and charging for water at a

price that incentivises water conservation; another measure might be developing dams and/or

watershed protection and/or developing conjunctive surface and groundwater management

systems.

On the basis of existing information, the proposal is then to develop the climate change

pathway to deliver the targets aimed at establishing new practices, technologies and

behaviours that is targeted at reducing vulnerability to climate variability and change. This

would need to be based on an agreed land use plan in the given area based on maintaining

or restoring ecosystem function given what is known about the expected range of climate

change hazards and impacts together with the projected socio-economic. The measures that

are net least cost (no regrets options) should be implemented first. The various activities in

the climate change strategy should be costed, have clear resilience benefits estimated for

each of the activities and have indicators and targets attached to it.

10. In relation to a specific area and according to the climate change targets that should be

delivered, improve the information base; determine what is known about the causality of

drivers that lead to the underlying sensitivity to climate variability and change and where the

gaps or conflicting areas of understanding are and design a specific and time-bound and

results-based analytical research programme to obtain data and information. The aim should

be to generate better data that is aligned to Ministry key interest which should help incentivise

coordination and better planning connections between ministries and departments. This

should be developed in close cooperation with the DoE in order to contribute to the National

Resource Inventory. The research programme should, as far as possible, be developed

along action research lines involving civil society organisations, local communities and

schools where possible in order to raise awareness and commitment to the strategy;

11. Determine the legal and policy gaps and inconsistencies to support the strategies identified

above, and develop a work plan and timetable to further develop a supportive legal and policy

framework;

12. Determine how the relevant ministries plans, budgets and performance framework

contribute to or detract from achievement of the climate change targets; engage in a process

of consultation and raise awareness and understanding; refine KPIs so that Ministry plans are

aligned to the climate change strategy;

13. Undertake an analysis of the delivery challenges in each of the relevant ministries working

the given geographical area and determine a work plan to address the challenges. This could

include financial management, project management and planning and contracts management

regarding delegation to third parties. The work plan to address the deficiencies in public

financial management should be aligned to the current financial management reform process

led by the MoE.

14. Determine how well the current institutional structure and staff skills profiles serves the

implementation of the adaptation strategy and proposed action plan for revised staff team

profiles and job descriptions in different ministries and decentralised government structures

and a training programme for delivering the skills and capacity upgrading. This could include

training on the legal framework and understanding what take precedence when as well as

changes underway, technical understanding of environment-economic-social linkages;

financial management, project management, results monitoring and environmental and social

safeguards.

57

15. Develop a knowledge management strategy for the ministries involved and establish the

systems for the effecting functioning of the strategy. This will include IT systems

development. Monitoring should seek to derive answers in relation to baselines and targets

(considering complex contexts and shifting baselines); measuring attribution of project

interventions, explaining how an intervention leads to an effect (causality) and monitoring

direct and indirect effects (including unintended consequences).

Table 16 provides further details on the action plan. The actions together add up to a three year work

plan to get Fiji to the point where it could establish an NCF and a National Climate Facility for support

to ministries. The tentative budget attached to this Action Plan is US$1.44 million.

The estimated and tentative budget indicated in Table 16 is for one selected watershed as a pilot to

be replicated in all other watersheds on the two main islands of Fiji and is therefore on the lower

bound of what would be needed to establish the investment pipeline for the NCF and National Climate

Facility. A great many of the actions contained in the Green Growth Framework for Fiji could be

picked up in the proposed Action Plan, and the costs may vary substantially from the estimates

provided in Table 16. Cost estimates provided here are tentative. The exact details of the design of

each of these measures with a more detailed costing should be carried out.

The main relevant actions from the Green Growth Framework for Fiji that can be picked up in the

establishment of the National Climate Facility include the following:

Thematic area 1: Building resilience to climate change and disasters

Development of a Local Government Self-Assessment Tool for Disaster Resilience by 2016;

Review the town plan regulations to facilitate the enforcement of zoning and bugger zones for

coastal areas, river banks and mangrove areas.

Mainstream cost-benefit analysis into decision-making processes in disaster mitigation and

preparedness measures by 2017.

Encourage collaboration with development partners and tertiary institutions in conducting

research on priority areas with climate change and disaster risk reduction by 2017.

Develop hazard maps and models for all potential hazards by 2020.

Partner with civil society in undertaking capacity building at divisional and community level on

building resilience including through incentivising performers/performance.

Undertake vulnerability assessment for all communities by 2019.

Develop climate and disaster resilience plans for urban and rural communities by 2019.

Capacity building provided to communities which need to be relocated.

Thematic area 3: Sustainable island and ocean resources.

Develop a natural resource management system which is inclusive and integrated.

Build community-based integrated resource management initiatives and replicate in all

Provinces by 2016 in partnership with community, NGO, private sector and development

partners;

Improve coordination of all resource management activities by legislating coordination

functions of the Divisional Commissioners Offices by 2015;

Capacity building and awareness programme with all communities, with emphasis on

resource owners, on the importance of environmental stewardship.

Strengthen environmental education in schools through more practical hands on learning.

Undertake results oriented awareness programmes that provide practical demonstration of

impact of development on ecological services;

Undertake awareness and capacity building with communities, district, provincial and

government to strengthen understanding and appreciation of marine ecosystem services by

2016.

Encourage data sharing among key stakeholders under the National Environmental Council

structure by 2015.

58

Formalise partnerships with tertiary institutions and regional and international organisations in

undertaking research by end 2015.

Strengthen the capacity of the Fiji Bureau of Statistics to collage and report on natural

resource and environment related data.

Develop a framework to establish a land use plan for the whole of Fiji by 2015.

Strengthen partnerships between government, civil society and communities by establishing

forums at district and provincial level to discuss environmental issues and share experiences

and good practice.

Conduct awareness for resource owners on legislation governing resource management and

the environment, in particular on their roles, responsibilities and obligations under law;

Increase the capacity of line agencies in relation to resource management.

Thematic area 6: Freshwater resources and sanitation management

Adoption of watershed management plans using integrated water resources management

principles for major rivers, waterways and drainage systems;

Build capacity for resource owners to incorporate the notion of environmental stewardship in

their community project proposals.

Develop an integrated database on national water use, extraction and replenishing rates and

disseminate widely for water resource planning;

Thematic area 7: Energy security

Establish economically justified feed in tariffs or pricing framework to incentivise renewable

energy generation;

Undertake a study to develop an independent power producer framework;

Establish a transparent process for procurement of new large scale capacity from IPPs,

pricing and other principles to be applied in all new power purchase agreements and grid

connection standards.

Increase public education and awareness of energy efficiency options;

Extend the current labelling system and minimum energy efficiency standards;

Providing financing and economic incentives to increase energy efficiency and decrease

energy intensity.

Update the energy efficiency codes and standards for buildings.

Review of current biofuel standards to facilitate development of indigenous biofuel resources.

Improve the effectiveness and sustainability of management models for off grid rural

electrification;

Establish a framework for encouraging off-grid rural electrification projects by NGOs and

CSOs and private sector.

Table 15 Action plan for establishing the NCF

Action area Activity Time (months)

Cost (000 US$)

1. Establish national targets Carry out a consultancy study to identify resilience and adaptation indicators and targets based on national strategies.

Hold participatory workshop to agree on the targets.

5 30

2. Develop the policy and measures pathway to reach the target and the corresponding business plan

Second part of the consultancy.

Hold a participatory workshop to agree on the policy and measures pathway.

5 30

2b Develop partnership agreement with the Bank to administer the NCF and the financial strategy to deliver

Procurement

Development partnership agreement

Consultancy to develop the financial strategy

Bank to develop financial products.

18 20

59

the adaptation and GHG emissions strategy

2c Develop the strategy for engaging with the international finance institutions and developing the financial product offering to consumers and engagement strategy with third parties

Procurement

Stakeholder consultation workshop

6 30

2d Develop NCF Board rules of engagement and technical training

Government consultations

Training

3 20

2e Develop the strategies for improvement of the enabling environment for private sector financing of climate change responses.

Consultancies;

Consultation workshops;

Standards development

Policy revisions

18 200

2f Develop strategy and campaign to raise public awareness and understanding of climate change and solutions.

Consultancies

6 50

3b. Identify gaps in the legal and policy framework and develop a prioritised work plan to address the gaps.

Consultancy

Workshop

3 30

3c Develop updated laws, regulation and policies to support the climate change responses pathway identified above.

Consultancies;

Government coordination processes

Leadership and technical training

24 200

3d. Realign Ministry plans and performance frameworks to be aligned to the climate change strategy.

Consultancies

Consultation processes;

12 50

4a. Organisational and training needs assessment and training programme development

Consultancies;

Government coordination processes;

Training budget

12 200

4b. Analysis of delivery challenges and work plan to address the needs

Consultancy

Training

4 30

4c. Work plan to address implementation challenges implemented

Consultancy

Training

Systems development

12 50

4d Establish knowledge management systems in the key ministries

Consultancy

Training

Systems development

12 50

5. Targeted analytical work to address contested areas in developing a climate change strategy,

Consultancies

Workshops/consultations

Exposure visits

18 250

6. Public awareness strategy 24 200

Total cost (US$) 1,500.000

Figure 7 provides a schematic representation of the timing and sequencing of the activities contained

in the Action Plan. The activities for the establishment of the NCF are grouped into three distinct

categories: i) establishing the national climate change targets and policy pathways ii) developing the

country systems approach: a legal, policy and institutional problem analysis and action plan to

address the gaps iii) developing the strategy for the NCF. With no delays, investment flows could

being from year 3 onwards.

60

Figure 7 Sequencing and timing of activities in the Action Plan

61

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Annex 1 Details of consultation mission for the preparation of this report

Schedule of meetings and informants

73 stakeholders participated in 30 bilateral interviews during the two week mission. This contains the

names and designations of the key informants and most of the names and designations of other

stakeholders present in the meetings. The table will be completed for inclusion in the feasibility

assessment report.

Date Agency Time # Participants Name of Participants Positions

UNDP and GCF team 8.30-12.30 3 Winifereti Nainoca/Nanise Boginivalu/Jeremy Hill

Dep. TL UNDP/ National Coordinator GCF readiness

programme/ Consultant, GCF readiness programme

Fiji Development Bank 2-3 2 Navitalai Cakacaka, Mr. Toganivalu GM & CEO

Prime Ministers Office 9-10 3 Yogesh Karan/ Edward Tunidau/ Peniana Lalabalavu

Permanent Secretary/Deputy Secretary, Development

Cooperation and Facil itation Division/??

Ministry of Finance 10.30-12.30 4 Makereta Konrote/Ledua Vakaloloma/??? Permanent Secretary/Head of ODA Unit/???

The Solicitor General 2-3 2 Glenys Andrews & Timaima Vakadewa

Live and Learn (NGO) 3.30-4.30 2

iTaukei Affairs 9-10 3 Josefa Toganivalu/?? Principal Administration Secretary/??

Rural and Maritime Development and

National Disaster Management 10.30-11.30 4 Permanent Secretary/??

Agriculture 12-1 4 Jitendra Singh/?? Permanent Secretary/??

Trade & Industry 3.30-4.30 3 Shaheen Ali/?? Permanent Secretary/??

Fisheries & Forests 9-10 3 Samuela Lagataki/Eliki Senivasa/George Madden

Permanent Secretary/Deputy Conservator of

Forests/Acting Director of Fisheries

Land & Mineral Resources 10.30-11.30 4

Malakai L. Nalawa/ Teke Kaake/Raijeli Taga/Lia

Tuivuya

Deputy Secretary/Acting Assistant Director

Lands/Acting Director Mineral Resources/Senior

Lands Officer

USAID funded project: ISSAC 12.30-1.30 1 Vuki Buadromo Project Manager

Public Enterprises 2-3 7 Kolitagane/Sujeet Chand/Laisa Bolalevu/

Permanent Secretary/Acting Director Policy &

Divestment /Acting Director Monitoring

JICA 4.30-5.00 2

Health 9-10 4

Dr. Eric Rafai /Vasiti Taylor /Vimal Deo /Robert

Sovatabua

Deputy Secretary Public Health/GM GMU/National

Health Emergency & Disaster Management

Coordinator /National Health Relations & Business

Development Officer

Local Government, Housing & Environment 10.30-11.30 1 Aminiasi B. Qareqare Director of Department of Environment

EU Funded project PAC TVET 12-1 2 Helene Jacot Des Combes/Leigh-Anne Buliruarua Senior Lecturer/Regional Coordinator

German Technical Cooperation 2-3 1 Christine Fung Land Use Planning & Facil itation Specialist/Dep. TL

 International Union for Conservation of

Nature (IUCN) 3.30-4.30 2 Taholo Kami; Andrew Foran

Regional Director Oceania/Head, Pacific Centre for

Environmental Governance

Climate Change Division, Ministry of Finance 5 1 Ovini Ralulu Head of Climate change Division

University of South Pacific/Pacific Centre for

Environment & Sustainable Development

(PACE) 9-10 1

Dr Morgan Wairiu Deputy Director

European Commission 1-2 1 Thierry Catteau

Development Cooperation Coordinator Natural

Resources and Infrastructure

Infrastructure & Transport 2.30-3.30 4 Paul D. Bayly/?? Permanent Secretary/??

New Zealand aid 3.30-4.00 2 Brendan Sherry/Willy Morrell

First Secretary - Development/ Development

Manager - Climate Change

UK Foreign & Commonwealth Office 8.30-9.00 1 Daniel Lund Head of Climate Change and Regional Affairs

World Wildlife Fund 9-10 3 Sarah Bailey/Alfred Ralifo Conservation Director/Policy officer

Pacific Islands Forum Secretariat 11-12 1 Exsley Taloiburi

Climate change Finance Adviser, Strategic

Partnerships and Coordination Programme

Conservation International 1-2 1 Susana Waqainabete-Tuisese Programme Director

AusAid 3-4 1 Christina Munzer Counsellor, Development Cooperation

14-Jun

10-Jun

07-Jun

06-Jun

08-Jun

09-Jun

13-Jun

65

Agenda for stakeholder consultation workshop

Time Session Time slot Content

Registration and coffee: 8.00 to 8.30am

8.30am 1. Opening and

introductions

1 hour Introductions

Presentation on the benefits and challenges

of an NCF

Discussion

9.30 – 11.15am 2. The current situation:

accessing and manage

funds for climate

change-relevant

investments

45 mins

preparation

Presentation on GCF performance framework

SWOT analysis of current situation

Wrap up

10.15-10.30am TEA BREAK

Session 2 cont’d 30 minutes

feed back

15 minutes

wrap up

11.15 -2.15pm 3. Future scenario:

Design of the NCF.

1 hour

preparation

Proposed objective of NCF;

Proposed design for the NCF;

Main barriers, risks and solutions for:

1. Attracting funds 2. Delivering through country systems; 3. Performance management: outcomes

and impacts; 4. Fund management and governance; 5. Integrated investment plan development

Breakout groups

Discussion

12.15 – 1.15pm LUNCH

3. Design options

cont’d

30 minutes

feedback

30 feedback

2.15 -3.45pm 4. The roadmap to

transition to an NCF

1.5 hour

45 minutes

preparation

30 mins

feedback

30 minutes

wrap-up

Stock-taking: core processes, tools, systems

that can be used as the basis for an Action

Plan to establish the NCF.

Wrap-up

3.45-4.00pm TEA BREAK

4.00-4.15pm 5. Conclusions and final remarks