Guidelines in Tagging/Tracking Government Expenditures for Climate Change in the Budget Process

April 4, 2014 BLGF MEMORANDUM CIRCULAR NO. 015-14 TO : BLGF Central and Regional Directors of This Bureau and All Others Concerned SUBJECT : Guidelines in Tagging/Tracking Government Expenditures for Climate Change in the Budget Process For the information and guidance of all concerned, attached is a copy of the Joint Memorandum Circular No. 2013-01 dated December 27, 2013 of the Department of Budget and Management and the Climate Change Commission regarding the abovementioned subject. The Central and Regional Offices are hereby instructed to take note of the above-Memorandum and disseminate the contents thereof to all Bureau Staff and others concerned. Please be guided accordingly. HIaAED (SGD.) SALVADOR M. DEL CASTILLO OIC-Executive Director ATTACHMENT December 27, 2013 JOINT DBM-CCC MEMORANDUM CIRCULAR NO. 01-13 FOR : All Heads of Departments, Agencies, Bureaus, Offices, Commissions, State Universities and Colleges, Other Instrumentalities of the National Government and All Others Concerned SUBJECT : Guidelines in Tagging/Tracking Government Expenditures for Climate Change in the Budget Process 1.0 Rationale Global climate change, a key development issue for the present and the future, has severe consequences, with the majority of human and economic impacts occurring in developing countries. The Philippines, due to its current and future exposure to climate-related risks, compounded by rapid degradation of the environment and unsustainable development practices, is highly vulnerable to existing and future climate change-related risks as shown by the devastations caused by recent strong typhoons like Pablo and Yolanda. Legal Framework Recognizing the challenges posed and opportunities created by climate change, the Government passed Republic Act 9729, known as the Climate Change Act, which mandates government agencies to mainstream climate change into policies, plans and programs in order to build a more solid foundation for climate resiliency. The Government also formulated the National Climate Change Action Plan (NCCAP), a strategic climate change reform agenda that spans three 6-year phases from 2011-2028 to align and define climate goals and execute agreed-upon actions across national and local agencies. The Disaster Risk Reduction and Management (DRRM) Act was issued involving a paradigm shift from a reactive approach focused on disaster rehabilitation and recovery to a preventive approach focused on prevention and preparedness. Both the NCCAP and DRMM recognize climate change adaptation as the appropriate means for climate disaster prevention. Climate Actions and Inclusive Growth Envisioning a climate resilient Philippines, the government aims to build the adaptive capacities of women and men in their communities, increase the resilience of vulnerable sectors and natural ecosystems to climate change, and optimize mitigation opportunities towards gender-responsive and rights-based sustainable development. ADSIaT Implementing climate change activities supports sustainable development goals by strengthening climate disaster prevention. Adaptation measures will result to a country more resilient to climate impacts by helping to achieve development objectives set by the Philippine Development Plan and the Millennium Development Goals. Small-scale sustainable and climate resilient farming and forest management will create the needed jobs in the rural areas. Similarly, climate change mitigation activities, which often call for the use of new clean technologies, will drive innovation and promote economic growth. Low-carbon measures that increase renewable energy generation and improve energy efficiency will also decrease local pollution. National Government Policy The Cabinet was reorganized into clusters with one cluster focused on Climate Change Adaptation and Mitigation (CCAM). This cluster shall lead in pursuing measures to adapt to and mitigate the impacts of climate change. The Government in its Budget Priorities Framework for FY 2014 has put climate change adaptation and disaster risk reduction and management as a major expenditure priority in the preparation of the FY 2014 Agency Budget Proposals in order to give focus to programs on climate change adaptation and mitigation. 1 Tracking the associated expenditures through the budget management system is essential for identifying them, ensuring their transparency and enhancing their effectiveness. Following the Typhoon Yolanda disaster, the Government is already putting in place measures to better track and account for the recovery and rehabilitation expenditures. This initiative, focused on climate change adaptation and mitigation programs, provides a means for tracking the resilience enhancing component of the build-back-better campaign. 2.0 Purpose / To identify, tag and prioritize climate change-related activities for all government agencies; and, TcIaHC / To take stock of relevant climate change programs, projects and activities to enable oversight and line department managers to track and report climate change-related expenditures. 3.0 Definition of Terms 1. Climate Change a change in climate that can be identified by changes in the mean and/or variability of its properties and that persists for an extended period typically, attributed directly or indirectly to human activity that alters the composition of the global atmosphere and is in addition to natural climate variability observed over comparable time periods. 2 2. Climate Change Adaptation adjustments in human and natural systems in response to actual or expected climate signals or their impacts, that moderate harm or exploit beneficial opportunities. 3. Climate Change Mitigation activities that are aimed at reducing greenhouse gas emissions (GHG), directly or indirectly, by avoiding or capturing GHG before they are emitted to the atmosphere or sequestering those already in the atmosphere by enhancing "sinks" such as forests. 4. Vulnerability the degree to which geo-physical, biological and socio-economic systems are susceptible to, unable to cope with the adverse impacts of climate change. 5. Resilience the ability of social or ecological system to absorb disturbances while retaining the same basic structure and ways of functioning and capacity for self-organization and to adapt to stress and change. 6. Risk the concept combines the magnitude of the impact (a specific change in a system caused by its exposure to climate change) with the probability of its occurrence (IPCC 4th Assessment Report, Working Group II, Appendix I). 7. Preparatory activities shall include but not be limited to vulnerability and impact assessment studies, climate change and variability researches, climate modeling, capacity building, policies, other related activities. ITaCEc 8. P/A/Ps refers to programs (GAS, STO, operations)/activities and projects of the agency as presented under their budgets in the General Appropriations Act (GAA). 4.0 Guidelines 4.1 To minimize the risks associated with climate change, strategies and investments for adaptation and mitigation are necessary. All climate change related strategies and investments of the government shall be identified as follows: 4.1.1 Adaptation responses 4.1.1.1 Measures that address the drivers of vulnerability. Vulnerability is the result of the magnitude of exposure of humans and ecosystems to climate-related hazards. Some of the drivers of vulnerability are poverty, lack of economic assets and lack of knowledge on the risks since they limit the capacity of the exposed population to cope properly to climate change. Some of the expenditure programs that fall under this category include poverty reduction, income and livelihood diversification, and health programs that are specifically designed to respond to climate change risks and variability. 4.1.1.2 Measures that directly confront climate change impacts. These types of expenditures are those that directly address the impacts or potential impacts of climate change variability, such as infrastructures that incorporate climate change risks in their design and/or their implementation to minimize impacts from climate change risks. 4.1.1.3 Measures that build resilience to current and future climate risks. Building resilience means increasing the capacity of the social or ecological system to reach or maintain an acceptable level of functioning or structuring while undergoing changes. Expenditure programs under this category shall include but not be limited to reducing land degradation, reforestation programs, climate resilient crop varieties or farming techniques, effective early warning systems and other investments specifically designed to respond to projected climate changes and variability. cTEICD 4.1.2 Mitigation responses 4.1.2.1 Measures to reduce greenhouse gas (GHG) emissions such as but not limited to improved energy efficiency, renewable energy projects, reforestation/improved forest management, and improved transport systems. 4.2 Climate change adaptation and mitigation expenditures in the budget of national governments encompass or cut across the five (5) key result areas of the President's Social Contract. To classify climate change-related expenditures to be tagged in the Online Submission of Budget Proposal (OSBP), the following shall be undertaken: 4.2.1 Identify P/A/Ps with climate change-related adaptation and mitigation expenditures; 4.2.2 Determine the climate change component/s within the P/A/Ps using the Climate Change Typologies (Annex A); 4.2.3 Specify the amount of climate change component/s consistent with Items 4.2.1 and 4.2.2. 5.0 Roles and Responsibilities 5.1 Departments, Agencies, Bureaus, Offices, Commissions, State Universities and Colleges, Other Instrumentalities of the National Government and all Others Concerned shall: 5.1.1 Identify and tag in the OSBP, the climate change-related expenditures shown in the Climate Change Typologies (Annex A); 5.1.2 Submit to CCC and DBM the list of tagged climate change per P/A/P during the annual submission of budget proposal as prescribed in the National Budget Call (NBC) for review/evaluation; and, TDcEaH 5.1.3 Seek the approval of CCC for typology proposals which do not fall under the existing Climate Change Typology. 5.2 The Department of Budget and Management (DBM) shall: 5.2.1 Ensure that the submission of the concerned Departments, Agencies, Bureaus, Offices, Commissions, State Universities and Colleges, Other Instrumentalities of the National Government and all Others Concerned is consistent with the above Section 5.1.2; and, 5.2.2 Provide CCC with the list of tagged climate change-related sub-activities per P/A/P after the printing of the National Expenditures Program (NEP) and General Appropriations Act (GAA). 5.3 The Climate Change Commission (CCC) shall: 5.3.1 Evaluate agency proposal of climate change components against the existing typology; 5.3.2 Review and approve new typology proposals of the agencies; and, 5.3.3 Attend and participate in the Technical Budget Hearings (TBH) of concerned agencies, when necessary. 6.0 For immediate compliance. (SGD.) FLORENCIO B. ABAD Secretary Department of Budget and Management (SGD.) MARY ANN LUCILLE L. SERING Secretary Climate Change Commission Footnotes 1. NBM 118 dated April 25, 2013. 2. As defined in the United National Framework Convention on Climate Change (UNFCCC). Attachments available upon request. Published in the Official Gazette, Vol. 110, No. 14, page 2109 on April 7, 2014.