LACCW 2021: Building the Economy of Tomorrow, using NDCs to Inform Green Recovery

As governments take urgent action to address COVID- 19 and its related impacts, the process offers an unprecedented opportunity to accelerate transition to green and resilient economies that keeps warming below 1.5oC, while also advancing the goal of more equitable and inclusive societies. No doubt that COVID-19 also adds complexities to the fight against climate change, increasing structural inequalities and vulnerabilities of societies that are not fully prepared to address global crises. At the same time, a response to the pandemic through large-scale investments to jumpstart economies can provide an opportunity to invest in a cleaner and more resilient future. Under this context, the role of Finance Ministries is fundamental.

The mitigation effort required is -on average- 7.6 percent of global emissions per year before 2030, to be in line with desired scenarios of midcentury net zero emissions. In this context the transformation of socio-economic structures will require careful planning to “address transition to a low carbon and climate-resilient global economy, mitigating climate-related financial risks, and pursuing pathways towards decarbonization” (Minister-Level Meeting - Coalition of Finance Ministers for Climate Action. April 2021)1.

Nationally Determined Contributions (NDCs) and other related climate change plans (e.g. National Adaptation Plans, Long-Term Strategies, 2050 Neutral Pathways) can serve as lighthouse to guide countries’ recovery efforts supporting national policy development fully considering climate related threats. Countries’ climate pledges have already outlined how to transition towards resilient pathways in ways that can help spur economic growth, job creation, using fiscal policies as one of the most powerful tools to combat climate change in line with national development objectives and the Sustainable Development Goals (SDGs).

Mobilizing finance for the implementation of national climate plans, National Determined Contributions (NDCs) or even for Long Term Strategies (LTS) implementation remains one of the most challenging issues as countries grabble with turning their intentions into actions. A major initial step towards this challenge is being able to get a grasp on the domestic financial landscape and expenditures related to climate action. This critical step will help to clarify the national base scenario and engage all relevant players.

In Latin America, countries like Chile, Colombia, Peru, Ecuador, El Salvador, and Honduras, have already embarked on an ambitious journey to determine public expenditures related to climate change and preparing specific climate finance strategies.

Objectives

Analyze how the initiatives around green recovery, NDC/LTS finance strategies, green budgeting and climate finance tracking are being considered in LAC region. Particularly the session will open a space for discussion on:

• Sharing regional experiences defining public spending/flows on climate related issues.

• Sharing regional experiences defining green recovery strategies.

• Sharing regional experiences green budgeting and inform with success and challenges that the governments have faced

• Provide/share critical information on how a climate budgeting/spending reviews and monitoring can provide insights on NDCs/LTS implementation strategies and aligned to the sustainable development agenda planning.

1 https://www.worldbank.org/en/news/press-release/2021/04/07/minister-level-meeting-of-the-coalition-of-finance-ministers-for- climate-action