UNDP and the Ministry of Environment and Physical Planning (MoEPP) are implementing the project “Strengthening institutional and technical Macedonian capacities to enhance transparency in the framework of the Paris Agreement” (CBIT PROJECT). As the project title indicates, the immediate objective of the project is to meet enhanced transparency requirements as defined in Article 13 of the Paris Agreement by strengthening institutional and technical capacity for measuring and reporting on emissions, mitigation and adaptation activities, and support received. The UNFCCC, the Kyoto Protocol and the Paris Agreement call for financial assistance from parties with more financial resources to those that are less endowed and more vulnerable. Climate finance is needed for mitigation, because large-scale investments are required to significantly reduce or sequester emissions. Climate finance is equally important for adaptation, as significant financial resources are needed to adapt to the adverse effects and reduce the impacts of a changing climate.

As a non-Annex I Party to the UNFCCC and a developing country Party to the Paris Agreement, North Macedonia receives financial assistance to support reporting. Tracking and monitoring climate finance in the country refers to local, national or transnational financing, drawn from public, private and alternative sources of financing, that seeks to support mitigation and adaptation actions addressing climate change, gives information on how much climate finance has the country received and how much has the it invested in climate actions.

The Third Biennial Update Report on Climate Change provides an overview of the support received in 2018 and 2019. The “Finance, technology and capacity building needs and support received” (2019) report gives an overview of the support received in many respects, the channels through which it has been received (bilateral, multilateral or other), the type of funding (grant, credit, capital, etc.), the sectoral structure in which the assistance is targeted, the purpose of funding (mitigation, adaptation or mixing), and how much is climate-specific (CS) or climate-relevant (CR).

Climate Budget Tagging (CBT) is a tool for monitoring and tracking of climate-related expenditures in the national budget system, accepted and recognized by the constituent bodies of the OECD (OECD Research Collaborative on Tracking Private Climate Finance; and OECD Development Assistance Committee). It provides comprehensive data on climate-relevant spending, enabling government to make informed decisions and prioritize climate investments. CBT enables public scrutiny on government and donors’ spending on tackling climate change issues strengthening accountability and transparency.

With the entry of North Macedonia into the EU, the country will automatically assume obligations to provide climate action support to under-developed countries and to apply stricter reporting criteria. An international consultant shall be contracted to set-up and operationalize national climate budget tagging system based on the recommendations provided in the Macedonian 3rd BUR, thus assisting the country to collect and report data on domestic resources allocated for climate change. In addition, the consultant will be expected to establish criteria for determination of climate change related programmes / projects / activities and the most adequate methodology for regular collection of data and information on national / local resources allocated for climate change, utilizing a CBT tool for monitoring and tracking of climate-related expenditures in the national budget system.