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Financing Local Resilience

Giving Full Ownership of Resilience Programming to Local Governments and Communities

May 2022/Rizqan Fadhillah for JGC

Janine Grant Consulting’s Director for Partnership Development, Mr. Fakri Karim, recently participated in the 7th Global Platform for Disaster Risk Reduction in Bali, Indonesia. Below is the transcript of his remarks to the Local Leaders’ Forum, held on 23 May 2022.

‘I would like to use my time today to highlight three key points related to the localisation of resilience programming.

First, resilience initiatives and intervention should start from the local level. Development and humanitarian risks, whether caused by natural or manmade disaster, are global issues which happen locally, impacting communities collectively and people individually. Take for example COVID-19 – it was a global pandemic, but the cases happen locally at household level, where individuals lost their lives, and families lost their livelihoods, which in turn impact local economies. Similarly, climate change it is global issue, but the impact is only felt by communities who are dealing with drought, flooding, or any other severe impact of the changing climate. This is why efforts to increase resilience should be locally led AND locally owned.

Picture 1. Basic supplies donation distribution from Janine Grant Consulting

Related to our topic today, this means that local governments, local leaders and communities need to be at the centre of all efforts to increase resilience, with support from regional and global actors.

The role of local governments in risk reduction management has been recognized as a key factor to build resilient communities since the first International Strategy for Disaster Reduction. The Hyogo Framework for Action 2005-2015 has already considered the need for both communities and local authorities to be empowered to manage and reduce disaster risk by having access to the necessary information, resources, and authority to implement actions. The Sendai Framework for Disaster Risk Reduction highlights local governments and stakeholders as key actors in strengthening resilience. And of course, I remember well the long negotiation process and how many different institutions worked tirelessly to ensure that the important role of local government was included in the Paris Agreement.

Second, when it comes to financing resilience, if we have already agreed the important role of local governments, local authorities, and all other local actors in increasing the resilience of their communities and their economies, then the important question to ask is “Do they have capacity - do they have enough resources - to allow them to fulfil their role as the key actor?”

We all understand that available public finance is just not enough. ODA is drying up. So, we need to ask ourselves if local governments and local actors have the necessary capacity to mobilize private invesment as guided by the Addis Ababa Agenda to fund their interventions, infrastructure, and business to improve their community and local economic resilence. For subnational governments in developing countries this is still a challenge, and it is even worse in least developed countries. In this case, the decentralisation of climate finance is one important solution. Recently, I read a report released by the SIAP SIAGA program, funded by the Australian Government, entitled “Resilience is Local”, which interestingly lays-out a strong case for the localisation of disaster risk management which is inline with the need to decentralise climate financing or other sources of finance to increase local resilience.

My third point today is about how we finance local resilience. Will the finance provided transform local capacities to increase their resilience? As we all know, project-based intervention will generate much less impact and fewer opportunities for local authorities or subnational governments to improve their capacity in the long run compared to a system change approach.

Based on the facts and questions above, in 2010, UNCDF together with the Governments of Bhutan and Cambodia, designed a mechanism to finance the local adapation to climate change to increase resilience at the local level. The programme is called the ‘Local Climate Adaptive Living Facility (LoCAL)’, which is at its core a financing mechanism to promote climate resilient communities and economies. It combines both the Performance Based Climate Resilient Grant System (PBCRGS) built on top of the government’s existing fiscal transfer mechanism and includes technical and capacity building support to both national and subnational governments. The programme facilitates the integration of climate change adaption into local government planning and budgeting systems, increases awareness of and response to climate change at the local level, and expands the amount of finance available to local governments for climate change adaption.

Since the programme was established in Bhutan and Cambodia with a budget of USD 800,000 it has grown to include 18 countries in Asia, Pacific and Africa with a total budget of USD 125 million.

The LoCAL Facility offers a standard and internationally recognized country-based mechanism to channel climate finance to local government authorities for adaptation efforts. The LoCAL mechanism combines Performance-Based Climate Resilience Grants (PBCRGs) that ensure programming and verification of climate change expenditures at the local level. At the same time, LoCAL offers strong incentives for performance improvements in enhanced resilience through technical and capacity-building support, as well as monitoring and quality assurance. It is a tested and proven approach to supporting the localisation of resilience efforts, in line with international agreements and country commitments.

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