Climate Public Expenditure and Institutional Review (CPEIR)

Public expenditure reviews (PERs), involve the analysis of allocation and management of public expenditures and may cover all government expenditure or focus on a few priority sectors such as agriculture, water, infrastructure, etc. Information gathered from PERs is used to provide key guidance to strategic planning and budget preparation and to identify ways in which to improve the efficiency and effectiveness of resource allocations. Increasingly, PER processes are applied to expenditure management systems and institutions, since institutional framework, organizational capacity, and everyday expenditure management practice of government determines the allocation and management of public expenditures.

Climate change has become a pressing priority in Asia-Pacific region. The CPEIR will be a key building block for Asia-Pacific countries to develop a climate fiscal framework – which would assess the demand and supply for climate funds and the sources of funds available from domestic and external sources. The concept of a climate fiscal framework was discussed with the key government agencies and development partners.

By reviewing current climate expenditures from both domestic and external sources of finance and identifying ways in which climate related expenditures can be tracked through time, the CPEIR will be a key building block for developing a comprehensive climate fiscal framework. Through time as the CPEIR methodology and approach is improved, a CPEIR will serve as a tool to enable Asia-Pacific countries to improve prioritisation, efficiency and effectiveness of all public resources in support of climate adaptation and mitigation.

cpeir publications
CDDE and UNDP APRC’s works on CPEIRs

The Climate Public Expenditure and Institutional Review methodology was first pioneered in Nepal, with UNDP and UNEP support in 2011. In a context common to many countries in the region, a proliferation of financing mechanisms and various donor-government dialogues on how to address climate change had been emerging. These discussions had often been fragmented and typically taking place amongst environment or climate change specialists, but not yet rooted in key national debates on how the government might best promote the country’s economic and social development.

The CPEIRs were introduced as the very first climate change studies of their kind that sought to move away from a parochial focus on the use of funds that are primarily dedicated to addressing climate change issues. Rather, they aimed to help countries to review how their own stated national climate change policy aims were being reflected in public expenditures more broadly and how institutions might be adjusted to ensure that financing a response to climate change is delivered in a coherent way across government. It was anticipated that CPEIRs would provide a useful starting point for longer term government-led multi-stakeholder dialogue on how the government might utilise increased financing as part of the national response to climate change.

Since the first CPEIR was undertaken in Nepal in 2011, four further countries have followed suit: Bangladesh, Thailand, Samoa and Cambodia. With five CPEIRs now completed, and further CPEIRs already in the pipleline in Indonesia, Timor-Leste and Viet Nam; it is an opportune moment to review this body of work and promote dialogue and learning. The CPEIR process is still evolving: where they have been undertaken, CPEIRs have already played an important role in stimulating more comprehensive and inclusive reflections on climate change than had taken place previously. However, there is still much to be learnt on how this type of analysis can be utilized and built upon to assist delivery of climate change policy goals. There is also scope to further refine and tailor the process to better meet the requirements of countries undertaking CPEIRs.

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