This paper describes an approach to measuring the effectiveness of the national systems that underpin public climate finance delivery. It assesses three interlinked elements of government administration:
the policy environment that supports climate change expenditures,
the institutional architecture that determines relevant roles and responsibilities
the public financial system through which climate change-related expenditures are channelled.
It identifies key principles of effective climate finance delivery for each of these three elements, and formulates criteria and indicators that reflect a progression towards compliance with those principles. These indicators are not intended to reflect an ideal state, but provide a means by which current practice can be interpreted and highlight important areas for progress.
Four principles of policy development and implementation are relevant to the effective delivery of climate change finance: ease of implementation, legitimacy, coherence and transparency. A further three principles relate to institutional performance: coordination, innovation and local anchorage. In terms of public expenditure, the four principles relate to the execution of the budget cycle: planning, execution, reporting and external audit. Collectively, these principles, criteria and indicators offer an explicit framework by which the strength of a national climate finance delivery system can be assessed, and from which its effectiveness can be considered.