Budgeting for climate essential

Jeffrey Gogo Climate Story
ZIMBABWE last year invested US$326 million in capital assets across the public sector, accounting for just 9 percent of Government’s total expenditures. Capital expenditures by the private sector will be much bigger, but figures are not immediately available. However, Government’s capital investments in recent years have fallen far below its own long-term target of 14,6 percent of cumulative expenditures, as indicated under the Public Sector Investment Programme (PSIP), an infrastructure development initiative.

The international best practice of capex as a percentage of total expenditures is 30.
These financial investments face greater risk from extreme climate and weather events such as tropical cyclones, which have increased in frequency during the last 15 years, causing manifold damage to property and public infrastructure.

Climate change and variability usually impacts directly on capital investments, leading to deep and widespread losses, degradation or destruction of key infrastructure, disruption of supply chains and can lead to serious changes in the availability of important natural resources, according to new research by the American Meteorological Society’s Policy Programme.

“Even small changes in weather can impact operations in critical economic sectors,” said the Society.
“As a result, maximising returns on financial investments depends on accurately understanding and effectively accounting for these risks.”

In Zimbabwe, the Government “accurately understands” the risks created and or worsened by climate impacts on public and private capital investments, but the matter is still regarded as peripheral during national budgets.

Of the US$93 million allocated to the Ministry of Environment, Water and Climate in the 2014 National Budget, only US$8,4 million will go towards environment and climate projects proper.

Even then, the text from the Budget was rather vague and funding appeared set aside mostly for other sub-sectors such as meteorology and forestry, and not adaptation and mitigation.

This is unfortunate. Short-term financial decisions have long-term implications for Zimbabwe’s socio-economic health that partly relies on climate change and variability.

Investments perform much better, and will improve the interests of communities most effectively, “if they are grounded in the best available knowledge and understanding”.

Also, finance was identified under the Bali Road Map as one of the key elements of a climate change response alongside technology, adaptation and mitigation, said Dr Kenneth Odero, a climate change expert and executive director at ClimateXL in Harare.

The Bali Road Map is a package of important outcomes guiding global climate action, which resulted from the annual UN climate talks held in Bali, Indonesia in 2007.

But, looking at Zim-Asset, the country’s guiding economic plan until 2018, it was “clear that climate change has yet to find policy space in the new administration, which perhaps explains both the omission and under-allocation” for particular climate change projects in the Budget.

Zim Asset recognises the dangerous impacts of changing climates on agriculture, Zimbabwe’s economic mainstay but vaguely aims for a broad improvement in the management of natural resources, mainly through capacitating EMA, tougher penalties for environmental offenders and the finalisation of a policy on climate and disasters.

In the absence of adequate and specific climate change budgeting, minimising financial losses on capital investments will be challenging.
Managing climate risks more effectively will depend on improvements in science, early warning, information dissemination and increases in the capacity of financial decision makers to use scientific knowledge among other factors.

Dr Odero said it was a difficult task to budget for climate change at any level, let alone at the national, primarily due to the uncertainties of climate change and variability.

However, if Government had a climate change related programme, then it was more likely than not to attract funding under the Budget.
“There is no doubt that climate finance is critical for adaptation, for which significant financial resources are required to allow communities to adapt to the adverse effects and reduce the impacts of climate change,” Dr Odero explained during an interview last week.

“And while not the only source of climate finance, public resources are nonetheless important in the climate finance mix, especially in Zimbabwe. Consequently, building community resilience and improving coping capacity to climate disasters in the absence of public finance makes is harder not easier.”

The costs of repairs or building new public infrastructure damaged by extreme climate events is huge, usually met only barely, and sometimes not at all.

An important bridge (Gudyanga River bridge) near Birchenough along the Mutare-Masvingo highway destroyed by Cyclone Eline in 2000 was only completely restored a decade later.

Bus operators and motorists using that route were forced to detour. A new rugged road that went under the bridge was created.
Small cars struggled to navigate the new road and the threat of the river filling up, slowing down or completely stopping traffic or washing people away, lingered on forever.

This year Government is planning capital investments of US$492 million in areas of agriculture, roads, bridges, power, health and sanitation among others.

Climate change and variability can either exacerbate existing risks or cause new sources of risk to emerge, which may continuously threaten those investments.

This makes budgeting for climate essential.
In these circumstances governments should identify climate-related risks and opportunities for financial decision making, increase spatial resolution of climate projections in order to provide climate information at the scale most relevant to financial investments as well as improve projections of the societal consequences of climate impacts through integrated assess, according to the American Meteorological Society’s Policy Programme.

Mr Verengai Mabika, director at DRI Africa in Harare, a non-governmental climate change-oriented organisation, said that Government had demonstrated its commitment to climate in many ways, including the recent establishment of a ministry directly concerned with climate and related issues.

“Whilst there is no budget allocated with a climate change tag, resources have been made available to influence aspects related directly and indirectly to climate change. Aspects that enable us to adapt to climate change such as water, we can say a budget has been allocated,” he said.

“We cannot look at climate change budgeting in isolation. We have to consider it within the context of the climate issues that the country is grappling with, which are provided for in the national fiscus under different line items in different ministries. However, the Government may not have sufficiently budgeted for key aspects that influence climate change such as research, capacity building.”
God is faithful.

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