How supporting climate action on a local level can transform the world

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum. Author: David Jackson, Director, Local Development Finance Practice, United Nations Capital Development Fund & Sophie De Coninck, Programme Manager, LoCAL, United Nations Capital Development Fund

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Fighting Climate Change is Everyone’s Task is the tagline for the COP25 Climate Conference in Chile in December. ‘Everyone’ will surely be understood to mean national governments, the private sector, non-governmental organizations, communities and individuals. But effectively fighting climate change includes the participation of a type of actor often overlooked as a driver of climate adaptability and resilience – authorities at the local, city and municipal level, specifically those in developing countries.

The Paris Agreement represented a milestone for recognizing the importance of local climate adaptation. Until the accord, such efforts were paid little attention by many governments and climate change practitioners. But the Paris Agreement recognizes the importance of subnational governments – authorities at the local, city and municipal level, specifically those in developing countries – as key drivers in strengthening local resilience to climate change and as contributors “to the long-term global responses to climate change to protect people, livelihoods and ecosystems”.

This sentiment was amplified in the Intergovernmental Panel on Climate Change’s (IPCC) Special Report on Global Warming of 1.5°C, which noted that “cities and regions may also be powerhouses of ambitious mitigation and adaptation measures that are hard to legislate and implement at the national level”.

Complementary to central governments, local authorities have a clear understanding of the priority needs of their communities from a climate action standpoint, as well as the convening power to translate goals into actions. Just as importantly, they typically have the mandate to undertake the small and medium-sized investments that are required to build climate resilience and adaptation responses at the local level, investments that would otherwise be difficult or impossible to implement through national legislatures.

Yet local governments cannot fulfil their potential for climate change adaptation. Evidence shows that due to restricted financial flows, most local governments in least developed countries (LDCs) are not able to contribute effectively to climate change adaptation and resilience-building, due to a lack of appropriate finance and budgetary allocation to the local level.

As a recognition of the importance of the subnational level in driving climate action, the United Nations Capital Development Fund (UNCDF) designed the Local Climate Adaptive Living Facility (LoCAL) to promote climate change adaptation by establishing a standard, internationally recognized country-based mechanism to channel climate finance to local government authorities in LDCs. It combines performance-based climate resilience grants (PBCRGs) – which ensure programming and verification of climate change expenditures at the local level, while offering strong incentives for performance improvements in enhanced resilience – with technical and capacity-building support.

The lesson we unearthed is that these climate resilience grants can also be used to incentivize good governance practices, both as a direct catalyst and through secondary effects. This is a lesson that can be applied by any actor in the public, private and non-government organization spaces looking to utilize such grants to drive appropriate climate action.

Good governance can be integrated in the performance measurements for these grants, incentivizing local governments to maintain baseline practices. These include gender equality, transparency and the participation of vulnerable groups, as well as environmental and social safeguards. Governance as a performance measurement can also be tailored to each country on the basis of specific needs or factors involving government partners. Under the LoCAL mechanism, the weight of good governance indicators varies from 30% of a given performance assessment matrix to 50% of the performance measurement.

Additionally, once performance grants catalyse climate mainstreaming into local planning and budgeting, local authorities are then motivated to train up on resiliency measures, from learning vulnerability assessment methodology to acquiring understanding on how to cultivate and implement strategic resilience planning. Performance grants ultimately do more than spur climate resilience. They give rise to more resilient governments generally, enabling and empowering sub-national authorities and driving better public service delivery.

Finally, performance grants can drive improvements in public financial management at various levels. A successful performance grant programme requires a sound intergovernmental transfer system to ensure that the grants are reaching the local governments. This kind of system also relies on effective public financial management, including transparent and rules-based systems relating to transfers from the central government; timeliness of reliable information to subnational governments on their allocations from the central government for the coming year; and the collection and reporting of fiscal data. In this regard, performance grants are designed for local authorities as well as for scaling up better governance on the national level.

This leads to a critical point. The many local authorities that are unable to contribute effectively to confronting climate change may not only be left behind in terms of climate resilience, but also in terms of good governance, including the kind needed to drive achievement of the United Nations’ Sustainable Development Goals (SDGs). The potential of performance-based grants to localize the SDGs in an integrated manner addresses not only SDG13 (“Climate Action”) but also SDG 5 (“Gender Equality”), SDG 8 (“Inclusive and sustainable economic growth, employment and decent work”), SDG 11 (“Sustainable cities and communities”) and SDG 17 (“Partnerships”).

As we approach the milestone of COP25, let’s remember that appropriate climate action and good governance are intrinsically connected. Supporting local climate action will have impacts beyond the climate. And the same is true if such action is ignored.