World leaders have opened COP26 this week in Glasgow and negotiations are now underway in earnest. Already, one of the top issues on their agenda is that of climate finance and how to scale up delivery to communities and countries most in need of support. Here’s our case for using local government authorities to channel finance to the ground level using the tried and tested LoCAL mechanism.

The impacts of climate change are most dramatically observed – and experienced – at the local level. Communities in least developed countries and other vulnerable developing countries are on the climate change frontline, yet finance for adaptation action is chronically underfunded. The UN Capital Development Fund (UNCDF) designed the Local Climate Adaptive Living Facility to meet this need in 2010-11, expanding first across Asia before launching it globally in 2014.

LoCAL channels finance to local government authorities in developing and least developed countries (LDCs) for climate adaptation action accompanied with practical capacity-building and technical support. It is a standard, internationally recognized, country-based mechanism which builds climate change– resilient communities and local economies.

Through LoCAL, funds worth over US $ 110 million have been committed to adaption action to date, mostly in LDCs. LoCAL has engaged with more than 300 local governments in 14 countries across Africa, Asia and the Pacific. Over 11 million people have benefited from LoCAL actions. The mechanism as the potential to reach 500 million people once those activities are scaled up to national level.

Participating countries own and steer the future direction of the LoCAL Facility, through the LoCAL Board. While international donors provide the bulk of the funds, approximately 25% of committed resources come from the countries themselves – a reflection of the country-level support for the LoCAL approach.
UNCDF is committed to growing LoCAL with the objective of doubling the size of the facility every five years until 2030. As of early 2021, an additional 13 countries expressed an interest in joining LoCAL and are currently being supported in the preliminary design phase, taking the total number of LoCAL countries to 27.

The LoCAL Facility, designed and hosted by the UN Capital Development Fund, is supporting 27 countries, mostly LDCs, SIDS and African nations, to integrate climate change adaptation into local governments’ planning and budgeting systems, increase awareness of and response to climate change at the local level, and increase the amount of finance available to local governments for locally led adaptation and resilience-building.

Local actions dovetail with the priorities of the LDC 2050 Vision of putting all LDCs on a climate resilient development pathway by 2030 and delivering net-zero emissions by 2050. With collaboration, LDCs have committed to align efforts to realise the commitments of the UN Sustainable Development Goals and Paris Agreement, implementing action at both the national and local level.

High-Level representatives and ministers from countries deploying the LoCAL mechanism earlier this year signed a Ministerial Declaration aimed to provide political guidance and high-level leadership for the efforts on locally led adaptation action in vulnerable countries particularly, LDCs, SIDS and African countries. Their call is a strong message ahead of COP26 for increased climate finance for NDC and NAP-aligned locally led action.

The Ministerial Declaration advocates for the LoCAL mechanism and its recognition as a government led, internationally recognized country-based mechanism for channelling climate finance transparently and effectively for local action. It also urges donor countries to continue providing financial resources to respond to the growing demand from countries that wish to implement the LoCAL mechanism and expand the local governments reached in existing LoCAL countries.

LoCAL Works

LoCAL works because it uses existing national systems to deliver finance for actions that meet local climate change adaptation needs. Local governments are a powerful ally in promoting climate change adaptation and building resilient communities, because they:
• understand local needs,
• have mandate to undertake small and medium-sized adaptation and infrastructure investments across climate sensitive sectors
• and are well positioned to bring a variety of local actors together for action.
LoCAL is aligned with national climate change and decentralization strategies, supporting nationally determined contributions (NDCs) and national adaptation plans (NAPs), thus bringing the Paris Agreement and achievement of climate-related Sustainable Development Goals (SDGs) to the local and community levels.
Furthermore, at the international level, LoCAL aligns with the LDC 2050 Vision, which aims to steer all LDCs to climate-resilient development pathways by 2030 and net zero emissions by 2050,, as recognised in the 2021 LoCAL Board Decision and signed by the signed by Board Chairs H.E. Perks Master Ligoya global coordinator of the Bureau for the Least Developed Country Group, and Ambassador Extraordinary and Plenipotentiary Permanent Representative of the Republic of Malawi to the United Nations and Sonam P Wangdi, Honourable Secretary of the National Environment Commission at the Royal Government of Bhutan and current Chair of the LDC Group of the UNFCCC.

In answering the LDC2050 Vision, a key LoCAL advantage of LoCAL is that it draws on national expertise and builds on national systems and procedures which already exist within a country. The LoCAL approach is based on the tradition of performance-based grant systems (PBGS), but targeted towards climate change adaptation and performance. LoCAL’s system of Performance-Based Climate Resilience Grants uses existing intergovernmental fiscal transfer systems and combines funding for investments or services with capacity building and technical assistance. LoCAL’s PBCRGs include incentives for LGs to improve performance through annual assessments linked with access to and size of the grants.
This approach avoids parallel, project- specific operations, and instead strengthens national systems to facilitate future scale-up and attract additional funding, promoting harmonisation, alignment and sustainability.

Read more on the LoCAL Facility and PBCRGs here.