UNDP first developed the Climate Public Expenditure and Institutional Review (CPEIR) methodology in 2011. The following document presents lessons learned from over twenty Climate Public Expenditure and Institutional Reviews. CPEIR exercises have served as a key tool for country decision-makers to improve their understanding of how and how much they are spending on their national climate change responses. They also help us identify the public programmes with climate change objectives or co-benefits in which governments are investing. Importantly, they have provided more robust data and evidence upon which to base policy recommendations and future spending decisions – whether in the domain of mitigation or adaptation. Specifically, CPEIR and follow-up analyses, such as reviewing fiscal policies or developing national climate change financing frameworks, have been instrumental in helping decision-makers to better:
- understand the resource levels required, as well as the gaps, to finance their national response to climate change;
- monitor and track climate finance flows – whether from domestic or foreign sources;
- assess the cost effectiveness and impact of existing and potential expenditures;
- reprioritise or reallocate, as necessary, scarce public resources in order to achieve more climate-compatible national development; and
- increase transparency over resource allocation and management.
UNDP’s experience supporting countries on CPEIRs has validated that both the process and the outcomes, in terms of findings and lessons, deliver a host of benefits. First, they initiate a process that catalyses new thinking on how to more effectively integrate climate change programming into “routine” planning and budgeting processes. Secondly, they help reinforce existing national climate change policy development and implementation. Thirdly, CPEIRs have helped countries to better appreciate the role of sub-national actors and mechanisms in climate change finance governance, by highlighting the pivotal role of delivering climate change-related activities at subnational levels. Fourth, CPEIRs can strongly bolster country and institutional ownership over climate change related finance by national authorities. Fifth, CPEIRs can serve as a tool to track the achievement of mitigation targets as well as adaptation responses, which enables countries to better attract and utilize global climate change related finance.