Albania’s Approach to Integrating Adaptation into Domestic Budgeting

Submitted by Cesar Henrique Arrais | published 21st Mar 2019 | last updated 9th Nov 2020

National Adaptation Planning Annotation

Please note that this content is from 2019. For Albania's latest actions on climate change please see the UNFCCC NAP webpage  and the Ministry of Infrastructure and Energy website, leading the NAP process.

Albanian shepherd

Albanian shepherd, from p.4 of the publication.

Introduction

Developing countries require significant financing to support the development and implementation of their national adaptation plan (NAP) processes. This financing is expected to come from a mix of sources, including domestic public finance, international public finance and private finance.

To date, the potential for domestic national budgets to finance NAP processes has received less attention compared to multilateral sources, in part because many of the countries most vulnerable to climate change do not have strong revenue streams from which to finance prioritized adaptation actions. While developing countries are not expected to rely on domestic public finance to meet all of their adaptation needs, this source can help to ensure the reliability of resources available to implement adaptation priorities across different sectors and levels of government. Integration of adaptation into domestic budgeting processes can also support access to international climate finance by showing government commitment, country ownership and counterpart funding. 

Building on an overview brief on domestic public finance options for NAPs, this sNAPshot takes a closer look at how Albania is integrating climate adaptation into its medium-term budget process.

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National Adaptation Planning Context

Albania is actively engaged in the climate change adaptation planning process.

  • In 2014, the government established the Inter-Ministerial Working Group on Climate Change (IMWGCC), which coordinates all institutions involved in climate change mitigation and adaptation processes and facilitates the integration of climate change into relevant new and existing policies, programs and activities. 
  • Albania launched its NAP process in 2015, undertaking a participatory stocktaking workshop to identify and assess institutional arrangements, policies and capacities to improve overall coordination. It also sought to assess existing climate change information and identify gaps and development needs.

Mainstreaming climate change adaptation into relevant sector plans and policies was identified 
as a key principle for the NAP process in Albania. Following the stocktaking exercise, mainstreaming activities were launched by strategically applying a climate lens to incorporate adaptation priorities into the overarching National Strategy for Development and Integration. This process resulted in adjustments of goals, recommendations for further actions and efforts to mainstream climate adaptation into key sectoral strategies, including water, agriculture, energy, biodiversity, tourism, health and emergency response planning.

Albania’s NAP document is currently awaiting approval by all ministries.

Integrating Climate Change Adaptation into Albania’s Medium-Term Budget Process

Albania’s NAP document provides the implementation framework to facilitate the integration of climate change adaptation into development planning by defining overarching objectives, targets and priority actions. Given the scale of financing required to implement its NAP priorities, the Albania government developed a dedicated NAP financing document. It provides guidance as to how to finance prioritized climate change adaptation actions, considering two sources and channels: 1) domestic government revenue and 2) international funds and sources. 

Following Albania’s ratification of the Paris Agreement in September 2016, the Albanian Ministry of Finance issued a requirement for all line ministries to define and identify appropriate and measurable objectives, outputs, activities and costs related to climate change within their budget programs as part of their preparations of the Medium Term Budget Program (MTBP) 2018–2020.

To ensure the successful implementation of the requirement to mainstream climate change adaptation into the MTBP and to identify lessons learned, the Ministry of Finance initiated a pilot exercise. Four ministries managing seven budget programs—the ministries of Agriculture, Interior, Environment and Urban Development—were selected for involvement in the pilot exercise. Following training for representatives from the pilot ministries, budget officers identified and labelled climate adaptation-related measures within their existing budget programs and projects and developed additional adaptation initiatives to be integrated into the MTBP 2018–2020.

In addition to the pilot exercise, the Ministry of Finance aims to improve tracking and reporting of climate adaptation expenditures by upgrading to a new financial management information system. 

Albania’s actions illustrate that integrating adaptation into national budget cycles requires collaboration between various actors, with the Ministry of Finance playing a key role. Budgeting is not only a technical process that requires understanding of budget cycles and identifying entry points, but also a political one that entails engagement of key actors and practical strategies for integration.