Gearing national financial and governance systems for delivering locally led adaptation: The integration of care

Local climate action for gender-just adaptation and resilience

Climate-related shocks and stresses such as heat waves, sea-level rise, shifts in rainfall patterns, and extreme weather events are already undermining well-being and exacerbating resource insecurity around the world.¹ If action is not taken to reduce emissions in the next few years, climate change is projected to further intensify the adverse impacts on human populations.²

Notwithstanding the global nature of climate change, climate impacts are realized and experienced at the local level. This is due to each context’s intersecting characteristics, specific socioeconomic conditions and development, culture, inequity and marginalization linked to gender, ethnicity, income, as well as geography, ecology, institutions, and governance systems.

Often, poor and marginalized populations are affected disproportionately by climate impacts because of their greater exposure, vulnerability, and low adaptive capacity to the impacts of climate change.³ This includes poor women, children, people with disabilities, and displaced people. They are commonly more vulnerable due to their activities and livelihoods (as they often rely on natural resources and so are directly affected by changes to weather patterns) and locations (as their dwellings are often in marginal and climate risk-prone areas). Such populations often have little access to climate information, are frequently not included in formal decisionmaking processes, and have limited financial resources to implement resilience strategies.⁴ Climate change also often exacerbates existing inequalities, such as gender inequalities, including through intensifying the work involved in caring for people, particularly the unpaid care work⁵ that sustains gender inequality.⁶

In many cases, poor and marginalized populations have the local knowledge to identify effective solutions and are often already adapting to changes within their capacities, but their voices are rarely taken into account in policymaking.⁷ Climate adaptation and resilience-building measures need to explicitly target poor and vulnerable people, empower these groups as decisionmakers, and support community-led solutions tailored to specific locations and contexts, accounting for factors such as the need for high-level support and institutional capacity,⁸ which interventions can help strengthen.

In many highly climate-vulnerable countries, addressing climate impacts by supporting local people and actors is increasingly recognized as essential for development in national policies and strategies.⁹ However, manifesting this priority in practice is lagging.

Significant barriers continue to impede resources from getting into the hands of local actors. International Institute for Environment and Development (IIED) research revealed that “less than 10% of finance from global climate funds is dedicated to local action (although adaptation finance to the local level is higher).”¹⁰ It is also rare to see local actors empowered to take forward their own adaptation efforts.¹¹ The Adaptation Gap Report 2023 finds that of the total adaptation finance “allocated between 2017-2021 less than 17 percent was reported to climate change adaptation projects with a specific focus on local communities.”¹² While the majority of adaptation finance flows to the sectors of agriculture and fisheries, water and floods, extreme weather and disaster risk, and government, social infrastructure and civil society, much of this is delivered through top-down approaches and expensive intermediaries, and very little goes toward locally led, owned, and delivered approaches.

The Organisation for Economic Co-operation and Development (OECD) analysis of development finance for gender-responsive climate action¹³ —based on the Development Assistance Committee (DAC) policy marker system—highlighted that of bilateral climate finance allocated in the period 2018-19, only 57% integrated some form of gender equality objective, and 2.4% had gender equality as its principal objective.¹⁴ 60% of climate adaptation official development aid (ODA) integrates some form of gender equality, while mitigation programs show a lower rate of ODA integrating gender equality objectives (46%). Most of the climate ODA integrating gender equality objectives was delivered through central and local governments, as well as other public entities.

Enabling local stakeholders to be at the forefront of climate adaptation efforts allows communities most affected by climate impacts to shape the decisions that significantly affect their lives and livelihoods.¹⁵ Because local contexts are best understood by local actors, adaptation led by them is often more effective than interventions imposed from outside, which remains the predominant mode of delivery. A lack of voice and ownership can lead to ineffective or maladaptive interventions.¹⁶ The lack of adequate funds reaching those on the frontlines and supporting resilience and long-term outcomes poses a significant barrier to addressing the impacts of climate change. IIED reiterates that “while not all adaptation needs to be locally owned or led, countries and local stakeholders are demanding greater efforts and commitment to putting more resources into local hands for local adaptation priorities.”¹⁷

As economies seek to respond to impacts, increasing the volume of climate finance channeled to the local level, in line with the locally led adaptation principles,¹⁸ and particularly through in-economy mechanisms, is increasingly important for governments to be able to effectively address climate impacts. This can be done by introducing adaptive features in social and welfare programs across various sectors, or by strengthening national systems and processes, such as climate-responsive fiscal transfer mechanisms. It can also be done by establishing national climate funds that provide platforms for local coordination and targeting financing for climate actions. Improved national service delivery and public financial management (PFM) at all levels are critical in supporting localized and gender-just adaptation.

This chapter looks at how national financial and governance systems can contribute to the delivery of localized and gender-just adaptation and resilience. Looking at climate and gender budgeting, country platforms, and intergovernmental fiscal transfers, the paper points to six good practices that countries can adopt.

Why local agency matters

A critical element in supporting local actors is in facilitating local ownership over solutions, rather than simply “delivering” at the local level. According to the IIED, local climate action can be categorized along a spectrum of localization, ranging from no localization (where international actors control decisions) to full localization (where local actors lead, with international organizations offering support).¹⁹ Local agency increases when local people have been empowered to build on their knowledge and systems and design projects. Enabling such empowerment requires careful attention to the flow and governance of finance across the chain of the national system, to ensure that at each stage, processes are working to support decisionmaking from local actors (subsidiarity of decisionmaking) and provide resources, such as technical expertise or capacity building, as useful for local actors.

A 2024 OECD report finds that a key challenge “to strengthen climate funds’ adaptation support is aggravated by the fact that local adaptation actors have no representation at the funds and the lack of direct delivery capacity of the climate funds.”²⁰ Decisionmaking in climate funds is often undertaken at the board level, with inputs from technical panels that seldom include the voices of local actors. Representation in funds and funding mechanisms of local actors is crucial to ensuring their perspectives are heard, and in local agency.

Local agency is also important in working toward gender-just solutions. Fostering local agency can provide local actors, who are best-placed to identify and address care work and related needs. Increasing the representation of carers and enabling their active participation and leadership is important for redressing the gaps in recognition and support for care work.²¹

Strengthening national public financial management systems for local action

Moving towards climate finance that supports greater agency for local actors requires the strengthening of national systems and processes. The operation and delivery of national PFM systems need to integrate climate objectives across its operations in order to realize actual flows that deliver for adaptation and resilience building.²² Often, while climate response can be a political priority, the quantity of finance available can be very low, the quality of the finance being delivered can be low (e.g., as described by IIED in the “Good climate finance guide,” but also in other aspects by the World Resources Institute—see “Principles for Locally Led Adaptation”),²³ and the finance can be hard to access for those who need it the most. This section looks at some tools and approaches that can help strengthen PFM systems in relation to efficiency and effectiveness of flows for more inclusive and impactful local action.

1. Climate and gender budgeting

One tool that can strengthen PFM systems is climate and gender budgeting. Climate and gender budgeting is the “technical task of investigating to what extent the government budget provided the resources to implement [climate and] gender-responsive policies and programmes.”²⁴ The approach tags and tracks funds allocated for climate and gender equality outcomes through the budget, and can help raise awareness across ministries, departments, and actors, improve management and accountability, evaluate impact, and ultimately improve planning and implementation.²⁵

Climate and gender budgeting and the information it produces, including on paid and unpaid care work, can support improved integration of emerging priority areas like climate adaptation and actions to close gender gaps—for instance, in the time spent in unpaid care—into the public budget. Recognizing and valuing the work of caring helps to highlight where burdens—especially in unpaid care—are greatest and where support is most needed. Climate and gender budgeting can provide evidence-driven information that facilitates accountability and transparency to national stakeholders (such as local communities).²⁶

However, implementing climate and gender budgeting is a complex process that requires investment in the systems and capacities of all actors involved in the budget process, which necessitates proactive national leadership and large amounts of resourcing. When done passively—as a check box exercise, and without sufficient investment and leadership, studies find little benefit from the exercise. For example, Chakraborty (2022) points to the case of incorporating gender-responsive policies at the local level in the Philippines. As the Philippines strengthened their fiscal decentralization processes, “devolution of basic functions like health, social welfare, and agricultural extension to local government units (LGUs), created more space for the LGUs to incorporate the gender needs at the local level”. These devolved functions were however “largely unfunded mandates and the intergovernmental transfers and budgetary process at the local level were largely politically determined”, limiting the ability of LGUs to undertake gender budgeting and policy initiatives in practice.²⁷

2. Country platforms

Another aspect of strengthening national financing for locally led adaptation is through ensuring climate is considered across government departments and sectors, including health, education, and other social sectors, and by ensuring inclusive and coordinated responses to address climate impacts.

By fostering multi-stakeholder and multi-sectoral nationally led mechanisms that are coordinated with priorities from the local level, governments can “bring together diverse finance sources behind programmatic and unified investment approaches rooted in national strategies.”²⁸

These mechanisms, that are also coming to be known as “country platforms,”²⁹ have developed in different ways across countries, and have manifested through broad national programs, such as Zambia’s Pilot Program for Climate Resilience;³⁰ national climate funds, such as Rwanda’s Green Fund;³¹ sector-specific partners, such as South Africa’s Just Energy Transition Partnership;³² or comprehensive multi-sector platforms, such as Bangladesh’s Climate and Development Platform, BCDP.³³

These mechanisms or platforms have the potential to support financing reaching local actors in a way that supports national and local objectives and ownership. For example, national climate funds can create “community windows” that earmark financing for the local community actors (such as for female-headed households and single mothers), and shape access procedures in a way that makes the financing more accessible for those actors.³⁴

3. Intergovernmental fiscal transfers

Strengthening the flows of finance from the national to the local level through intergovernmental fiscal transfers is another key dimension of strengthening PFM systems. Such transfers enable subnational governments to respond to needs in their jurisdictions in a more involved way. The devolution of fiscal responsibilities aligns with many countries’ drive for decentralization of government.³⁵ However, the rollout of decentralization reforms has been very uneven within countries in relation to fiscal, administrative, and political aspects.³⁶ Commonly, administration decentralization occurs faster than fiscal and political administration, causing strain on subnational authorities, who then have limited abilities to raise income and make decisions, while being asked to deliver from an administrative perspective. Improving the quality of decentralization processes, particularly by enabling subnational authorities to devolve fiscal and political power as well as administrative, can improve the ability of the subnational government to deliver.

Climate finance can be sent through such decentralized mechanisms to be directed and managed at the local level, to empower local governments and communities to make decisions about how to address climate impacts. Such an approach has been piloted, for example, in Mali, Senegal, Kenya, and Tanzania through the Devolved Climate Finance Alliance (DCF Alliance).³⁷ In these pilots, local governments have established climate adaptation funds that pool pots of funding for adaptation. Governance and decisionmaking processes have been carefully strengthened and enable local communities to choose how the funds are distributed to investments in public goods. The prioritization is done through inclusive planning processes that are embedded in local government systems.

Case study: “Scaling up locally led climate actions in Cambodia”

The Royal Government of Cambodia launched the first phase (2010-2020) of its decentralization and deconcentration reform program, known as the national program on subnational democratic development, which transferred some service delivery responsibilities to subnational administrations. The program established decentralized systems for local development planning and financing, which provide the opportunity to incorporate resilience planning into local development, enhance awareness and behavioral change within communities, and support national climate mitigation and adaptation goals. In the second phase (2021-2030), the government seeks to expand these efforts by embedding climate and disaster resilience into public service delivery and local development interventions. The goal is to enable the subnational administrations to effectively address climate change vulnerabilities, disaster risks, and major infectious disease outbreaks.³⁸

These reforms pave the way for improved decisionmaking capacities at the local level. Decentralizing and deconcentrating power to local authorities closes the distance between the authority and beneficiaries, and this can provide local actors more voice in planning and decisionmaking, which would then improve access to resources in systemically underserved areas and to systemically underserved groups—such as better targeting of marginalized women, or a better understanding of the local authority of the impact on unpaid care work of policy and program change—when designed and implemented with a focus on these objectives.³⁹

Case study: Empowering local institutions and actors

The Forest Investment Program’s $80 million Dedicated Grant Mechanism (DGM) is a dedicated window that devolves grants to Indigenous Peoples and Local Communities (IPLCs) organizations, who then subgrant to local initiatives run by local communities, who identify, design, implement, and report back.⁴⁰ The mechanism was designed by IPLC representatives, reflecting their priorities and interests—and illustrating how better representation of IPLCs in fund structures has a large impact on how those funds are delivered.⁴¹ The mechanism’s procurement guidelines stipulate that “sub-projects must engage women in proposal design and include them as co-implementers.” A number of women-led sub-projects have been funded. For example, in Burkina Faso, sub-projects related to women’s livelihood activities (soumbala seed production and weaving) were implemented that would otherwise not have had the attention and funding, and in the Democratic Republic of Congo, women’s groups used the mechanism as a platform to raise specific concerns they face as Indigenous women. CIF’s learning review of the DGM found that “sub-projects under the DGM better met community needs, promoted better inclusion of marginalized groups, delivered outcomes more efficiently, promoted better constituency representation [including of women] and led to greater recognition of IPLC issues at country and global-level, among other outcomes … [identifying] that intangible dimensions of trust, ownership and transparency went a long way in supporting the achievement of substantive outcomes.”⁴²

4. Delivering for informality

Given the large informal sectors across countries, particularly in relation to women who work and provide care informally, national and local financing mechanisms need to carefully consider how to reach and support informal workers.

In undertaking climate and gender budgeting, the information produced needs to ensure that it is highlighting flows, or lack thereof, to informal sectors and activities, and on paid and unpaid care work. Doing so can improve the integration of these areas into the budget. Similarly, delivery through intergovernmental fiscal transfers and local governments requires attention to delivering for informality. Representation of and delivery to informal activities is also an important area of support under country platforms.

In Chapter 5, Gallien and van den Boogaard discuss taxing informal economies, arguing that greater policy attention should be paid to areas where greater revenue gains may be made rather than focusing on taxing informality.⁴³ The informal economy encompasses a wide range of economic activities that are not regulated or protected by the state, and as such, workers are often the most marginalized and vulnerable to financial and other shocks. As well as not taxing informality, governments can seek out opportunities to support informal workers adapt to climate change and reduce their vulnerability through ensuring that there are financing mechanisms that can reach and support informal workers, that there is representation of informal workers on funding bodies and management, and that data is being collected about informal as well as formal workers—and through a partnership rather than extractive approach.

Six good practices for delivering local climate finance that includes support for care work and workers

To move toward stronger national financial and governance systems for delivering locally led adaptation that integrates care, the following good practices are highlighted:

1. Collect data and information to make evidence-based decisions on policy and program directions. Using tools and approaches, such as climate and gender budgeting, to generate information about how much finance is going to which areas of need is important for transparency and analysis. Such data and information generated in a proactive and transparent way can support increased sensitization and convergence across actors on ways forward. Gathering such data necessarily requires dialogue with local actors, including organizations that represent informal women workers or producers, to understand their realities and an approach that works in partnership between national and local actors, rather than as an extractive or tick box process. Similarly, integration of climate and gender data and information, such as the integration of the outcomes of climate modelling and scenarios in partnership with local communities and actors is important in making informed plans and decisions (see for example, the Regional Integrated Multi-Hazard Early Warning System (RIMES) initiative).
2. Foster multi-stakeholder and multi-sector dialogue to ensure coverage of support across sectors and actors, particularly including the social sectors that are often overlooked, including health, education, and social welfare sectors. Supporting such dialogue, particularly through a country platform mechanism as appropriate for the country, is important in highlighting voices and experiences from across areas that are often left out—such as the impact of climate and the impact of solutions to addressing climate on women and care responsibilities, as well as in helping to bring together financing behind programmatic and unified approaches.
3. Ensure focus on strengthening the governance, capabilities, and capacities of systems and organizations. Financing for climate and development remains focused on short-term outputs over long-term outcomes, often at the detriment of building the governance, capabilities, and capacities of systems and organizations that can help set up the pathways for long-term delivery. The DCF approach is showing how investing in national and local PFM and governance systems can change the way that funds are managed and delivered, particularly through enabling more inclusive and transparent planning and delivery processes.⁴⁴
4. Provide support for social networks and organizations. A critical aspect of engaging non-governmental actors in national and local planning and delivery processes is supporting those actors and their networks and organizations to have the capacity to engage. Groups and networks, such as women’s groups, can be small, grassroots, and organic structures that can be supported to engage in local planning and delivery. For example, the Forest Investment Program’s DGM in the Democratic Republic of Congo took an “empowerment” pathway, which focused on building the local community network’s capacities to identify priority projects and develop a shared vision.⁴⁵ IIED reports that “this was a result of observing that most of the subgrantees would have had too little capacity for a competitive grant call, which would have favored the fewer, more capacitated Indigenous peoples’ organizations but may not have necessarily produced better subprojects.”⁴⁶
5. Ensure that support is targeted to the poorest and most vulnerable people and communities. Targeting interventions to those that require the support the most—such as marginalized women, workers in the informal sectors, Indigenous Peoples, people with disabilities, older people, and youth—require proactive direction from the start—having the voices of these groups elevated in planning spaces, and ensuring interventions are designed on terms and mechanisms that can reach those groups. A tool that can be integrated into subnational government processes is vulnerability and risk assessments that bring quantitative data and mapping together with bottom-up local knowledge and qualitative data to identify target groups (see also the application of the assessment in Namibia).⁴⁷
6. Strengthen monitoring, evaluation, and learning (MEL) processes and systems, particularly upwards accountability, to hear the feedback and voices of local people and communities on barriers and challenges. Investing in MEL systems is an important aspect of strengthening national financing and governance systems, particularly for climate adaptation and resilience building, which requires the management of complexity, uncertainty, and context-specificity. Learning from delivery, particularly through approaches that help to “balance power, promote mutual accountability, value local knowledge and priorities, and create value for local actors.”⁴⁸ Taking 360-degree feedback—hearing from all actors involved in an activity, to understand persisting issues is important in an iterative approach to strengthening delivery.