Add: Indicator(s) for climate finance

[jm-rivera]

Following the OECD methodology, create indicator(s) to track climate finance.

Creating such indicators will involve modifying the indicators json file. Please use the branch created for this issue.

Please comment on this issue with details on:

• how do they define allocable aid in the context of climate aid?
• how do they count aid that is specific to climate-relevant sectors? (i.e aid that could be considered related to climate/environment, which may or may not have the climate market)
• do they do multilateral imputations for any bilateral donors?

[Mattie-P]

OECD in the past (2013-2017) has provided the share of expenditure from international organisations flowing to climate related activities, so it may be possible to calculated imputed multilateral ODA to climate if we can find more up to date shares. (See last page here).

[Mattie-P]

Link: "For the aforementioned statistics, the basis of calculation is either total bilateral allocable aid or screened bilateral allocable aid. If the statistic is based on a single marker (e.g., only the biodiversity marker), the denominator is screened bilateral allocable aid. If the statistic is based on a combination of multiple markers (e.g., both the climate change adaptation and mitigation marker), the denominator is total bilateral allocable aid. Environment and Rio marker statistics are only shown for donors with sufficiently high coverage – that is, more than 50% of the donor’s bilateral allocable aid is screened for the marker. Cross-country averages only take into account these donors"

-- confirms the use of total bilateral allocable aid as the indicator.

[Mattie-P]

Link: "Bilateral allocable aid is the basis of calculation used for all markers (gender equality and environmental markers). It covers bilateral ODA with types of aid A02 (sector budget support), B01 (core support to NGOs), B03 (specific funds managed by international organisation), B04 (pooled funding), C01 (projects), D01 (donor country personnel), D02 (other technical assistance) and E01 (scholarships)."

-- confirms we can use the same indicator for total allocable aid as the gender markers

[Mattie-P]

Indicators to be added:

• [x] total climate allocable ODA
• [x] mitigation significant (1)
• [x] mitigation principal (2)
• [x] mitigation not targetted (0)
• [x] mitigation not screened (99)
• [x] mitigation total (1+2)
• [x] adaptation significant (1)
• [x] adaptation principal (2)
• [x] adaptation not targetted (0)
• [x] adaptation not screened (99)
• [x] adaptation total (1+2)
• [x] overlap total (1) --> In theory, we only need to combine the significant indicators as the activities marked as principal should not have any other focus.

[Mattie-P]

Because of the double counting issues raised with the overlap, if you added the total adaptation and total mitigation indicators together you would double count the overlap. Because of this:

• I have not included a climate mitigation and adaptation total indicator
• We need to think about the best way to do the "share_of" element of the indicators, as currently if you were to add the two together without reading the documentation, you would double count the overlap in the shares without realising.

[jm-rivera]

Thank you @Mattie-P, this is great, thorough research.

How should "climate mitigation and adaptation total" be calculated. If possible explain using the indicators you have already created.

Very important point on the shares. When you say the two together, you mean "mitigation and adaptation"? I think that would be further argument to just provide a way to get that indicator so that we can make sure that the right total is produced, including the right share.

[jm-rivera]

And to verify that the work is sound, I would like to test it against the reported OECD numbers. Could you please link whatever the latest statistics they published are? And note whether it is ODA gross disbursements, ODA commitments, or some other type of flow

[Mattie-P]

The simplest way to get a "climate mitigation and adaptation total" indicator would be to add "mitigation total" and "adaptation total" indicators, and subtract the overlap indicator.

Issue: I need to confirm the assumption above that a project cannot be principal mitigation and still be either 1 or 2 for adaptation, as the wording from the OECD is a bit confusing - it could be interpreted as principal for climate change, not specifically adaptation or mitigation. Link: "Aid focused on climate change overall comprises activities classified as “principal” or “significant” by either the climate change mitigation or adaptation marker; projects marked with both Rio markers are subtracted from the total to avoid double counting."

[Mattie-P]

Link: "For the aforementioned statistics, the basis of calculation is either total bilateral allocable aid or screened bilateral allocable aid. If the statistic is based on a single marker (e.g., only the biodiversity marker), the denominator is screened bilateral allocable aid. If the statistic is based on a combination of multiple markers (e.g., both the climate change adaptation and mitigation marker), the denominator is total bilateral allocable aid. Environment and Rio marker statistics are only shown for donors with sufficiently high coverage – that is, more than 50% of the donor’s bilateral allocable aid is screened for the marker. Cross-country averages only take into account these donors"

-- confirms the use of total bilateral allocable aid as the indicator.

@jm-rivera , Does this not mean actually that we need to be using screened bilateral allocable aid for the singular totals (mitigation and adaptation), and then "total bilateral allocable aid" for the combined totals (mitigation + adaptation - overlap)?

[jm-rivera]

The simplest way to get a "climate mitigation and adaptation total" indicator would be to add "mitigation total" and "adaptation total" indicators, and subtract the overlap indicator.

Issue: I need to confirm the assumption above that a project cannot be principal mitigation and still be either 1 or 2 for adaptation, as the wording from the OECD is a bit confusing - it could be interpreted as principal for climate change, not specifically adaptation or mitigation. Link: "Aid focused on climate change overall comprises activities classified as “principal” or “significant” by either the climate change mitigation or adaptation marker; projects marked with both Rio markers are subtracted from the total to avoid double counting."

How can you verify that? And yes please do!

[jm-rivera]

Link: "For the aforementioned statistics, the basis of calculation is either total bilateral allocable aid or screened bilateral allocable aid. If the statistic is based on a single marker (e.g., only the biodiversity marker), the denominator is screened bilateral allocable aid. If the statistic is based on a combination of multiple markers (e.g., both the climate change adaptation and mitigation marker), the denominator is total bilateral allocable aid. Environment and Rio marker statistics are only shown for donors with sufficiently high coverage – that is, more than 50% of the donor’s bilateral allocable aid is screened for the marker. Cross-country averages only take into account these donors" -- confirms the use of total bilateral allocable aid as the indicator.

@jm-rivera , Does this not mean actually that we need to be using screened bilateral allocable aid for the singular totals (mitigation and adaptation), and then "total bilateral allocable aid" for the combined totals (mitigation + adaptation - overlap)?

In theory but I don't agree with the OECD on this. And we don't follow their guidance on gender either. It creates a disincentive to screening. You can increase the share of aid to a specific policy marker by reducing how much you screen, or by not screening aid that you know definitely doesn't target the area covered by the policy marker.

[Mattie-P]

OECD in the past (2013-2017) has provided the share of expenditure from international organisations flowing to climate related activities, so it may be possible to calculated imputed multilateral ODA to climate if we can find more up to date shares. (See last page here).

We can get 2013-2020 imputed shares in this excel file available on the climate change page.

[Mattie-P]

Link: "For the aforementioned statistics, the basis of calculation is either total bilateral allocable aid or screened bilateral allocable aid. If the statistic is based on a single marker (e.g., only the biodiversity marker), the denominator is screened bilateral allocable aid. If the statistic is based on a combination of multiple markers (e.g., both the climate change adaptation and mitigation marker), the denominator is total bilateral allocable aid. Environment and Rio marker statistics are only shown for donors with sufficiently high coverage – that is, more than 50% of the donor’s bilateral allocable aid is screened for the marker. Cross-country averages only take into account these donors" -- confirms the use of total bilateral allocable aid as the indicator.

@jm-rivera , Does this not mean actually that we need to be using screened bilateral allocable aid for the singular totals (mitigation and adaptation), and then "total bilateral allocable aid" for the combined totals (mitigation + adaptation - overlap)?

In theory but I don't agree with the OECD on this. And we don't follow their guidance on gender either. It creates a disincentive to screening. You can increase the share of aid to a specific policy marker by reducing how much you screen, or by not screening aid that you know definitely doesn't target the area covered by the policy marker.

Interesting ok. Do most organisations follow this methodology? Slightly concerned about saying we follow official OECD methodology if we have slightly changed the denominator in these calcs

[Mattie-P]

And to verify that the work is sound, I would like to test it against the reported OECD numbers. Could you please link whatever the latest statistics they published are? And note whether it is ODA gross disbursements, ODA commitments, or some other type of flow

Latest data available here. However, you were right, looks like these are commitments, not disbursements. Although, these figures are slightly inflated on the graph Sara wants duplicating, so need to figure out why that is the case too.

[jm-rivera]

Latest data available here. However, you were right, looks like these are commitments, not disbursements. Although, these figures are slightly inflated on the graph Sara wants duplicating, so need to figure out why that is the case too.

How do you mean "slightly inflated"?

Interesting ok. Do most organisations follow this methodology? Slightly concerned about saying we follow official OECD methodology if we have slightly changed the denominator in these calcs

On gender, barely anyone is calculating gender figures independently. As we've seen some organisations have even put numbers out where they don't even figure out you can't just add up an entire column of the CRS without narrowing it down to just allocable aid.

On gender we definitely don't have the OECD methodology, but we're very clear about it.

On climate, it's an important question to take back to the full group. How much do we care about alignment vs how much do we want to focus on comparable numbers to our other ODA analysis. For example, focusing on commitments when we don't assess commitments (and when the OECD itself has noted that they are of questionable data quality), doesn't make much sense. But if we don't do commitments, our numbers won't match what the OECD is saying. Same with shares. Do we follow our practise for internal consistency (and because frankly the OECD methodology is questionable), or do we align with the OECD but put out numbers which are dubious?

[Mattie-P]

How do you mean "slightly inflated"?

Inflated in that looking at the latest data available which I linked above and again here, the figures in the graph Sara sent are slightly lower. e.g. 2020 the graph shows a value below the 45bn line, whereas the spreadsheet total gives £45.6 billion. Having a look at the other versions of the data (recipient perspectives and provider perspectives) as these offer more of a breakdown.

On gender, barely anyone is calculating gender figures independently. As we've seen some organisations have even put numbers out where they don't even figure out you can't just add up an entire column of the CRS without narrowing it down to just allocable aid.

Wonder who you're talking about! But happy to leave that then, makes sense to keep it consistent with the gender analysis.

On climate, it's an important question to take back to the full group. How much do we care about alignment vs how much do we want to focus on comparable numbers to our other ODA analysis.

• In terms of doing the checks, do we want to check our new indicators against the commitments provided by the OECD (i.e. adapt them to take the "USD_commitments" column), but then use these indicators on the disbursements column instead?
• At the very basic level, it is quite misleading to report commitments as "ODA supporting climate objectives" as the OECD appears to do here, as this implies the money has actually been disbursed.
• I think in terms of this analysis, the UK team is more interested in the disbursements anyway, not the commitments, but I will double check with Eden, Romilly and Sara.

[Mattie-P]

I need to confirm the assumption above that a project cannot be principal mitigation and still be either 1 or 2 for adaptation, as the wording from the OECD is a bit confusing - it could be interpreted as principal for climate change, not specifically adaptation or mitigation.

Looking at the Recipient Perspective and Provider Perspective (more years available here), it looks like an activity can be principal across both adaptation and mitigation at the same time. Hence, it makes sense to follow your suggestion for the "overlap" indicator to filter as follows: "climate_mitigation": ["1", "2"], "climate_adaptation": ["1", "2"]

[jm-rivera]

Thanks @Mattie-P. Do we need to change anything to the version you submitted for review then?

[Mattie-P]

Yes, we need to adjust the overlap indicator to match this:

"climate_mitigation": ["1", "2"], "climate_adaptation": ["1", "2"]

[jm-rivera]

Yes, we need to adjust the overlap indicator to match this:

"climate_mitigation": ["1", "2"], "climate_adaptation": ["1", "2"]

Please make the changes and commit to this issue's branch (so modify #38)

[Mattie-P]

Rio markers should be applied to all bilateral allocable ODA. Allocable ODA excludes general budget support (development cooperation modality A01), imputed student costs (E02), debt relief (F01) except debt swaps (purpose code 60061-Debt for development swap and 60062-Other debt swap), administrative costs (G01), development awareness (H01) and refugees in donor countries (H02).

We need to adapt the indicators to include the purpose codes 60061 and 60062 while the rest of aid_type/cooperation modality F01 (debt relief) is excluded. Seeing as we currently filter on the aid_type column, will we need to remove the filter on F01 to include these purpose codes? If so, we need to understand the make up of F01 i.e. can we just exclude other purpose codes if they are all only part of F01 - unless there is an easier way i.e. a line that "excludes F01 except 60061 and 60062". I was not aware that purpose codes mapped onto aid_types, but the wording above suggests they are. Is this the case?