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Issue 16 | March 2023
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Finance climate change for adaptation, mitigation, and resilience

Elizabeth By Elizabeth Nuwaha, Research Fellow, ACODE

The world is in a climate emergency – “a code red for humanity” according to the UN Secretary-General. The concentration of greenhouse gas (GHG) emissions in the atmosphere are wreaking havoc across the world and threatening lives, economies, health, and food.1 Climate change refers to long-term shifts in temperatures and weather patterns. These shifts may be natural, such as through variations in the solar cycle. Since the 1800s, human activities have been the main drivers of climate change, primarily due to burning fossil fuels like coal, oil, and gas and cutting down forests. Burning fossil fuels generates greenhouse gas emissions that act like a blanket wrapped around the Earth, trapping the sun’s heat and raising temperatures. Examples of greenhouse gas emissions that are causing climate change include carbon dioxide and methane. These come from using gasoline for driving cars or coal for heating buildings. Clearing of land and forests also releases carbon dioxide. Also, landfills for garbage are a major source of methane emissions.

In Uganda, Climate change shocks are already impacting all parts of the economy. The shocks include the landslides in Bududa and Bundibugyo, floods in Kasese, and the rising water levels of Lake Victoria that have left many communities devastated and vulnerable to hunger and disease. The country has also experienced unpredictable rainfall patterns which are affecting agricultural production and food security together with frequent and prolonged droughts. Climate change has also registered economic impacts which include; high prices especially food prices, increased food insecurity, high costs of production and low profitability, and Increased vulnerability and inequality. Other climate change effects include; the displacement of persons and the destruction of properties and infrastructure. These disasters have negatively impacted the economy, women and other vulnerable groups considering Uganda ranks as the 13th- most-vulnerable country in the world to climate change and 160th out of 192 nations in readiness to confront the threat according to the Notre Dame Global Adaptation Initiative (2021).

The destruction and degradation of the environment and natural resources like forests and wetlands have also greatly contributed to the climate change crisis. The climate change impact assessment report by the Ministry of Water and Environment estimated that damages due to climate change in the agriculture, water, infrastructure, and energy sectors will collectively amount to 2-4% of GDP between 2010 and 2050.

Over the years, Uganda has instituted legal and institutional frameworks for this cause and they include;

  • The Uganda Vision 2040 calls for the development of appropriate adaptation and mitigation strategies on Climate Change to ensure that Uganda is sufficiently cushioned from any adverse impact brought by climate change.
  • National climate change Act 2021 which governs Uganda's national response to climate change and the Budget framework paper should not be submitted without a certificate of compliance with climate change.
  • The 3rd National Development Plan (NDP III) enshrines climate change issues through Natural Resources, Environment, Climate Change, Land and Water Management Program.
  • Ratification of various international and regional instruments on climate change like the UN Framework Convention on Climate Change, the Kyoto Protocol, and the Paris Agreement.

General observations in Planning and budgeting on Climate Change Program

Whereas the Ministerial Policy Statements recognize climate change as a constraint in the productive sectors, only two sectors (Roads and agriculture) have direct components that address climate change in their budgets. The 2021/2022 Ministerial Policy Statement for the Ministry of Water and Environment recognizes climate change as a major constraint to the productive sectors of the economy such as agriculture, industry, tourism, oil and gas, and water among others.

However, the integration and implementation of the National Climate Change Policy (NCCP) including awareness creation, in all sectors and district development, national coordination, monitoring and reporting on the implementation of international standards and commitments are still inadequate.

Climate change funding trends are not only undesirable but also untraceable and there is limited domestic financing. There is a consistent lack of adequate budget allocation to program interventions specifically on climate change resilience/adaptation. This article, therefore, argues for increased financing towards the Climate Change, Natural Resources, Environment & Water Management Program.

Mainstreaming Climate Change into planning and Budgeting

  • In line with section 30 of the Climate Change Act,2021 and the National Environment Act 2019, all government Ministries, Departments and Agencies (MDAs) should mainstream Climate Change and Environment issues in the detailed annual budget estimate. The Ministry of Finance, Planning and Economic Development and the Ministry of Water and Environment should work together to facilitate the assessment online through the Program Budgeting System.
  • In addition, the Ministry of Water and Environment and the National Management Authority are required to follow up and provide technical support to other government MDAs during implementation.
  • Mainstreaming will be essential to achieve the Paris Agreement (2015), which, in Article 2.1.c., calls for “making finance flows consistent with a pathway towards low greenhouse gas emission and climate-resilient development.” For this reason, climate change should be considered at the beginning across all planning and budgetary processes in developing countries like Uganda that have scarce resources to tackle social, economic, and environmental issues.

Climate change financing trends in Uganda

Globally, climate change has become a development concern with negative impacts on growth which has increased the need to scale up adaptation and mitigation efforts. However, the previous budget allocations to Climate Change in Uganda for the last 3 Financial years continue to register a downward trend, for instance, the proposed National Budget Framework paper FY 2023/24 budget shows a 0.9% reduction in the budget allocation to the climate change and natural resources program from 2% in FY 2022/23 to 1.1% in FY 2023/24. Furthermore, since the start of the implementation of NDP III in 2020/21, the budget allocation to the Natural Resources, Environment, and Climate Change program has averaged at 1.2%, which is below the recommended 5% in NDP III.

The above observations suggest that climate change financing is not moving in tandem with the development concerns accruing as a result of Climate Change in Uganda. With the rate at which climate change impacts exacerbate development challenges to our economy, prioritizing funding Climate Change, Natural Resources, Environment, and Water Management and adherence to the Climate Change Act 2021 is highly recommended. This notwithstanding, Uganda has made strides toward climate change mitigation and adaptation, especially on the policy and legal framework front.

Figure 1:General trends in the Budget Allocation
Source: National Budget Financial Year’s 2020/21,2022/23 &NBFP FY 2023/24

Conclusions and recommendations

Climate Change is a massive calamity and a development concern which requires interventions from all Stakeholders, Governments cannot handle alone all stakeholders including academia, financial institutions, CSOs, citizens etc. alone. All societal sectors have a role to play. Climate finance is used to spur action that can help reduce greenhouse gas emissions, decrease vulnerability to the threats associated with climate change, and promote adaptability to changes already underway. Fulfilling international and national commitments and adopting to changing climate requires significant financial resources. Also, developing countries like Uganda need to enhance efforts to mobilize domestic resources for climate cause

  • The Government, through the Ministry of Finance Planning and Economic Development and the Ministry of Water and Environment, should improve efficiency in budget execution to minimize wastage and leakages ensure high returns on public investment while prioritizing more funding for the Natural Resources, Environment, and Climate Change program.
  • The Parliament of Uganda should task the responsible Minister to produce the Certificate of Climate Change responsiveness as supported by the Public Finance Management Act, 2015 Section 13 (7), which states that Budget Estimates must be accompanied by a Certificate of Budget Compliance for the Previous Financial Year issued by the National Planning Authority before being laid before Parliament by the Minister of Finance, Planning, and Economic Development. Further, Section 30 of the National Climate Change Act, 2021, requires the Minister responsible for climate change matters in consultation with the Chairperson of the National Planning Authority to issue a certificate certifying that the Budget Framework Paper is responsive and contains adequate allocation of funding to climate change measures and actions.
  • Utilization of existing climate financing frameworks such as the AfDB-Africa Climate Change Fund-(AfDB) should be deliberate to realize full-scale investment and implementation towards the Natural Resources, Environment, and Climate Change program.
  • The ministry of water and Environment should come up with continuous initiatives to build the capacity of District Local Governments in the four regions (Central, Eastern, Northern and Western) in the country in addressing climate change: causes and impacts, and disasters through knowledge enhancement.
  • Irrespective of the debt burden, deliberate efforts should be taken by the government to increase financing for climate change mitigation and adaptation as Uganda’s economy is heavily reliant on the environment because of agriculture.
  • There is a need for deliberate government investment in an appropriate energy mix affordable to the population e.g in solar energy, wind etc.
  • Lastly, the Government through the Ministry of Water and Environment should accelerate reforms aimed at improving the efficiency in climate mitigation and adaptation by promoting continuous integration of climate change and disaster risk reduction in planning, budgeting and reporting.

Even though the cost of tackling this problem is significant, the cost of action is lower than the cost of inaction (Stern, 2009).

1State of Climate


  1. Ministerial Policy Statements (MPS). 2020/21 Ministry of Water and Environment
  2. Ministry of Water and Environment. (2019). Water and Environment Sector Performance Report, Kampala, Ministry of Water and Environment. Ministry of Water and Environment.(2020).
  3. Economic Assessment of the Impacts of Climate Change in Uganda, Kampala, Ministry of Water and Environment.
  4. National Planning Authority. (2015). Uganda National Development Plan III, Kampala, National Planning Authority
  5. National Budget Financial Year’s 2020/21-2022/23
  6. National Budget Framework Paper(NBFP) –Financial Year-2023/24

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