On the margins of the 2024 ICAT Community Meetings (27-29 February 2024), we discussed  climate finance transparency with Dr. Lennox Gladden, the former Chief Climate Change Officer at the National Climate Change Office within Belize’s Ministry of Sustainable Development, Climate Change and Disaster Risk Management.  Dr. Gladden was recently appointed as the Director of the ICAT regional climate action transparency hub in Central America. ICAT is supporting Belize to establish a climate finance tracking framework, based on methodological guidance currently under development by ICAT, with the support of the Center for Clean Air Policy.

• On identifying the need to set up a climate finance tracking framework: Investments were being made, sometimes in similar initiatives, and of course we try to avoid duplication in investments as much as possible. Therefore, the government led a process to plan how best to track finance – specifically climate finance – flows. Not only as a reporting obligation, but also to enable meaningful implementation and action.
• On the ICAT climate finance tracking methodology: The methodology is welcome because it offers a level of structure and standardization. It also offers the flexibility to tailor to your national circumstances. It is agile and flexible enough to make the necessary adjustments, which developing countries require.
• On stakeholder engagement: Now we have a stronger relationship with the Ministry of Finance and the private sector. It was a welcome bonus that we were able to get another avenue to promote awareness of climate change and climate action.
• On the challenge of defining climate finance: If we want to have meaningful action on the ground but our definitions differ, it makes us inefficient in resource mobilization. When we developed a common definition and understanding of what climate finance is really about, it helped with mainstreaming and improving coordination between ministries, and also with civil society and local and indigenous communities.
• On integrating national transparency frameworks: Once the climate finance module is embedded into the current national MRV system, it will reduce duplication. With our national MRV system, now coupled with the climate finance MRV component, you can not only identify the activities that are climate change related, but also filter an estimated cost, and link that estimated cost to the NDC. 

Q: Climate finance is crucial for developing countries in their efforts against climate change. Climate finance tracking helps countries to accurately assess and efficiently manage the financial resources dedicated to achieving their climate objectives. Belize is currently working on establishing a climate finance tracking framework. What was the situation that led you to look into climate finance tracking? Why did Belize have this need? 

LG: I think that Belize’s situation is not foreign to other countries in the region, and internationally. We are doing a lot when it comes to resilience building. However, when we did a policy landscape, we couldn’t clearly articulate and quantify the level of investment at all levels, national and subnational. Investments were being made, sometimes in similar initiatives, and of course we try to avoid duplication in investments as much as possible. Therefore, the government led a process to plan how best to track finance – specifically climate finance – flows. Not only as a reporting obligation, but also to enable meaningful implementation and action. That was the genesis of our interest. And that interested not only state actors, but non-state actors as well, who wanted a tabulation of the costs of implementation. 

Q: Once you realized that climate finance tracking was a need and priority for Belize, how did you proceed? What did you do to meet this need?

LG: Acknowledging it’s a need is one thing, but mobilizing the resources to actually meet that need is something else. We did a stocktake. We’ve had a quite fruitful collaboration with ICAT for some time now. And surprisingly, that was the next item in ICAT’s pipeline – to develop a climate finance tracking framework. The modality that ICAT provides is a stepwise approach. We appreciate that because it is important for us to build our capacity in tracking climate finance, rather than just having something put to use without explaining how each step works, why it is important, how it feeds into the next step, etc. So, we started that engagement with ICAT and, luckily, we are one of the participating countries to help spearhead this framework. 

Q: What results have you seen so far, and if this is still a work in progress, what are the preliminary results? Was it more or less what you expected, or did you encounter any unexpected implications? 

LG: We need to look at both the technical and administrative aspects, taking into consideration the political appetite to look at climate finance and climate finance tracking. What was something quite unexpected, but quite meaningful was the level of stakeholder engagement. We – the Ministry of Environment – are responsible for climate change. When we started to discuss climate finance, we tried to engage the Central Bank. But they were not receptive, because finance was not our area, even though we are responsible to track all climate change action, economic, social and environmental. Through the process of building a climate finance framework, we also got feedback from the private sector, who were interested as well. There is a level of sensitization and awareness that wasn’t there. We’ve tried for years to get that participation from these stakeholders, and through this process we finally achieved it. They were engaged. For example, they wanted to do some climate tagging within the national budget, but they did not know how to go about that process, so they appreciated the framework. Now we have a stronger relationship, not only from the environmental perspective, but also from the financial perspective, and a good level of engagement from the Ministry of Finance and the private sector. In this context, when discussing climate finance, we also had to touch on the climate rationale and nomenclature. They are making investments and doing some level of capacity building, but they cannot explain if it is on adaptation, mitigation, etc. It was a welcome bonus that we were able to get another avenue to promote awareness of climate change and climate action.

Q: Did you encounter any challenges along the way and how did you approach them? 

LG: I mentioned before that it was a plus, but the major challenge I would say was the governance structure. We have a robust governance structure, but to operationalize the climate finance tracking framework, we first had to collectively come up with a singular definition for climate finance. From the climate change perspective, we would define climate finance from our vantage point. Whereas for the ministry responsible for human development or the social sector, or the ministry responsible for finance or national planning, the definition of climate finance might be different. This becomes a challenge. If we want to have meaningful action on the ground but our definitions differ, it makes us inefficient in resource mobilization. Not only financial resource mobilization, but also technical resource mobilization. When we developed a common definition and understanding of what climate finance is really about, it helped with mainstreaming and improving coordination between ministries, and also with civil society and local and indigenous communities. All of us have this singular understanding of climate finance. It was a challenge that we had to take that approach, of first standardizing the definition in order to have a common language going forward.

Q: What does this work mean for Belize in the future? What are your plans and what developments do you anticipate? What impacts and changes would you wish to see? 

LG: This is our third project with ICAT. We started off with creating a national MRV system. The climate finance aspect is a module that is going to be integrated into that existing system. We have quite a robust institutional arrangement and governance structure, coupled with climate change legislation that was again supported by ICAT. We have that legal mandate. Once the climate finance module is embedded into the current national MRV system, it will reduce duplication, because it also has the facility to track the location of the respective programs. It’s a very granular system in its design. The current national system looks at a project on the whole. It doesn’t necessarily break down that a certain aspect of the project is related to climate change mitigation or adaptation. But with our national MRV system, now coupled with the climate finance MRV component, you can not only identify the activities that are climate change related, but also filter an estimated cost and link that estimated cost to the NDC. This is because some of the indicators within the platform are similar to those of the nationally determined contributions. It is all linked within an effort to have meaningful impacts on the ground. There is the IT and technological aspect of MRV, but we also have to take into consideration the human capital involved in this process, the sector leads who are responsible to input the data as part of their mandate. This is then translated to more efficient use of the funds for climate action. It all builds on existing initiatives that we’ve undertaken.

Q: Belize is one of the first countries to apply the ICAT methodology on tracking climate finance. The feedback from the first country applications will be used to adjust and finalize the methodology, which will then be available to all countries. What was your experience with the methodology? 

LG: The methodology, and especially the phases of the framework, is welcome because it offers a level of structure and standardization. Historically, the approach to climate finance has been a bit ad hoc. It’s a struggle to see which methodologies are applicable to your national circumstances. The methodology that is being proposed offers the flexibility to tailor to your national circumstances. It is agile and flexible enough to make the necessary adjustments, which developing countries require, because we have our own challenges in this process. When looking at the framework’s indicators, you might question why choose one indicator over another. But overall, the future of the framework is its flexibility. This also helps in sensitizing all stakeholders in the usage of the framework.