MAINSTREAMING CLIMATE

CHANGE THROUGH THE

BUDGETARY PROCESS

Presentation at the

CIF Partnership Forum

June 23, 2014

Colin F. Bullock

Introduction

• Climate change is a far reaching development challenge for small island developing states.

• The world’s bio-physical systems are in the process of fundamental change affecting weather patterns with implications for addressing the developmental challenge.

• Governments must lead the way in adaptation and mitigation; hence implications for the budget.

Hydro-meteorological Events 2001-2012

EVENT Year Category Lives Lost Cost ($JB) Impact

(% GDP)

Hurricane Michelle 2001 4 5 2.52 0.8

May/June Flood Rains 2002 - 6 2.47 0.7

Hurricane Charley 2004 4 1 0.44 0.02

Hurricane Ivan 2004 3 17 36.9 8

Hurricanes Dennis & Emily 2005 4 7 5. 98 1.2

Hurricane Wilma 2005 5 1 3.6 0.7

Hurricane Dean 2007 4 6 23.8 3.4

Tropical Storm Gustav 2008 12 15.5 2

Tropical Storm Nicole 2010 16 20.6 1.9

Hurricane Sandy 2012 2 1 9.7 0.8

Total 72 115.53 ~ 2.0 p.a.

0.8 0.7

0.002

8.0

1.2

0.7

3.4

2.0 1.9

0.8

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Pe

r c

en

to

f G

DP

COST OF SELECTED NATURAL DISASTERS (2001 - 2012)

Infrastructural Damage and Loss

H. Michelle

2001

May/June Rains 2002

H Ivan 2004

H. Dennis/Emily

2005

H Wilma 2005

TC Gustav 2008

TC Nicole H.

Sandy

2010 2012

Infrastructure

Water & Sewerage

96 78.7 687.7 400 47.4 725 270.00 215.1

Telecom 6.9 4.46 1535.3 42 30

136.90 70

Transport 1577.5 1491.8 3225.9 4272 3199 11530 17041.80 1739.35

Energy & Electricity

6.4 1.2 1397.9 70

108 92.40 644

Airport/Ports

120.1 11.56

1.80 20.6

Total

1576.2 6966.9 4795.56 3276.4 12363 17542.90 2689.05

Estimated Impact on Social Sector 2001-2012

SUB-SECTOR AMOUNT (J$Million)

Housing 21,577.05

Health 2,122.15

Education 2,870.46

Correctional Facilities 88.59

Heritage Sites 20.17

(Source: Impact assessment Reports )

Natural Coastal Resources Lost

Future Exposure and Loss Estimates

• Value of exposure to Wind, Water and Earthquake is US$18.625 billion.

o Road network US$2.352 billion

o Urban areas of KMR and St Catherine exposure of US$4.0 billion and US$3.5 billion respectively.

o Private buildings and construction had dominant share of exposure at national level.

• Average annual loss from hurricane wind estimated at US$105 million with private construction and national infrastructure accounting for largest shares.

Jamaica’s Policy Framework

• Vision 2030 National Development Plan (“to pursue sustainable prosperity”) supported by Growth Inducement Strategy.

• National Outcome #10: Energy, security and efficiency; promoting diversification and expanding renewables to 30% by 2030.

• National Outcome #14: Climate change adaptation and disaster risk reduction.

• Alignment with the budget through the tri-annual Medium Term Socioeconomic Policy Framework, the Public Sector Investment Programme and Corporate Plans of Ministries Departments and Agencies.

Advancing the Climate Change Agenda

• The policy and institutional framework is being put in place.

• Investment in low emission energy solutions for climate change adaptation and mitigation.

• Renewables now account for approximately 10% of the energy mix.

• Public education programmes have led to a high level of public awareness (82.6% in 2013).

• Inclusion in primary school curriculum.• Purchase of catastrophe risk insurance.

Advancing the Agenda contd.

• Significant reforestation (> 400 hectares under EU funded project)

• Watershed rehabilitation and coastal restoration.

• Retrofitting public assets• Facilitating research• Establishment of a National Disaster Fund to

assist in post disaster recovery.• Establishment of a Ministry of Water Land

Environment and Climate Change

PRIORITY GROWTH INDUCING CLIMATE CHANGE-RELATED PROJECTS SUPPORTED BY THE GOJ FY2013/14, 2014/15

PROJECT NAMEBUDGET J$M FY2013/2014

REVISED ESTIMATES FY2013/14

BUDGET J$M FY2014/2015

% Change in Expenditure - Budget FY2014/15/ Revised

Estimates FY2013/14

Enhancing the Resilience of the Agricultural Sector and Coastal Areas (Adaptation Fund) (MOA) 30.0 27.8 64.9 133.1

Enhancing the Resilience of the Agri Sector and Coastal Areas (Adaptation Fund ) (MOTE) 11.8

Enhancing the Resilience of the Agri Sector and Coastal Areas (Adaptation Fund) (MOF) 18.0 17.3 18.4 6.5

Enhancing the Resilience of the Agri Sector and Coastal Areas (Adaptation Fund) (WLECC) 114.4 29.4 143.0 386.8

Community Based Landslide Risk Reduction 159.0 52.3 73.0 39.5

Climate Change Adaptation & Disaster Risk Reduction Programme (CCADRRP) 169.5 146.8 -

CCADRRP - EU/UNEP (MOF/PIOJ) 25.7 24.3 24.3 0.0

Pilot Programme for Climate Resilience (PPCR) I 7.0 7.2 -

Jamaica Rural Economy & Ecosystems Adapting to Climate Change (JAREEACH) (NEW) 19.5 7.5 30.4 304.9

PPCR II 18.0 10.2 25.3 148.7

Mitigating Threats of Alien Species in the Insular Caribbean 41.0 37.4 2.5 -93.4

IDB Road Rehab Programme - Transportation Infrastructure Rehabilitation Programme 1378.4 691.0 689.7 -0.2

Support for Design of Decentralized Road Maintenance 19.7 41.7 -

IDB Road Improvement Programme 330.0 273.1 273.9 0.3

Palisadoes Shoreline Protection & Rehab 1318.9 1194.1 50.0 -95.8

Northern Jamaica Development Project - OECF/IADB/EU/GOJ 2286.5 2301.7 2445.0 6.2

Washington Boulevard Corridor Widening - completed 0.0 42.6 -

Rural Road Rehabilitation Project II (OPEC) 402.0 79.3 494.1 522.8

Rural Road Rehabilitation Project II (Kuwait) 289.6 0.0 33.0

Major Infrastructure Dev Programme (China EXIM Bank/GOJ) - (NEW) 2500.0 422.3 4000.0 847.3

Sandy Gully/KMA Drainage Project - TS Nicole Rehabilitation 1288.9 935.8 883.5 -5.6

Strengthening the Operational and Financial Sustainability of the National Area Protected System 47.6 42.0 46.6 10.9

Emerging and Sustainable Cities Initiative - - 25.0

Riverton Landfill Access Road Concrete Pavement Project - - 20.0

Total - Building Resilience 10475.5 6383.8 9342.6 46.3

Constraints and Challenges

• An imperative to adjust out of debt limiting fiscal space.

• Balancing priorities across different time horizons. (Immediacy vs Sustainability).

• Perception of high initial capital costs for renewables.

• Vulnerability from ageing and less than adequately maintained infrastructure.

• National disaster fund may not be adequately resourced.

Specific Budgetary Issues

• To stay within IMF fiscal parameters MOFP has determined , as a rule, that only signed project agreements can be included in the budget

• Budget approved project spending curtailed by the monthly Warrant, which is the permission to spend, even with resources in hand. This affects projects financed by grants as well as those by loans.

• Perception that resources cannot be absorbed apace. To meet government targets very stringent disbursement ceilings introduced which lengthens bureaucratic process, slow project implementation and contribute to both time and cost overruns

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Charting the Way Forward

• Staying the course with resolving the fiscal constraint.

• The need to build from awareness to functional/constructive engagement.

• To foster dialogue on balancing between “man made infrastructure” and environmental preservation.

• To address social and lifestyle issues that impinge on the environment (e.g. sanitation and use of environmentally friendly fuel options).

• Addressing the cost of electricity (fossil fuel and renewables).

CONCLUSION

• Jamaica is committed to making transformational investment in climate change adaptation and disaster risk reduction

• This is a commitment with challenges:– It is expensive to retrofit aged social and economic

infrastructure and to introduction wide scale renewable technologies

• Our commitment and its actualization is tempered by the country's tight fiscal constraints

• As increased fiscal space becomes a reality overtime resilience building should be seen as budgetary priority.

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THANK YOU

Discussion