Commonwealth Secretariat Discussion Paper 27 Number 27 • April 2021

Join the Discussion Email us your comments via Earth Observation Technologies [email protected] Published by the Commonwealth for Improved Access to Climate Secretariat. Funded by CommonSensing. Finance* © Commonwealth Secretariat 2021. All rights reserved. This publication may be reproduced, stored in a retrieval system, or transmitted in any form or by The Role of Data and Information any means, electronic or mechanical, including photocopying, recording or otherwise, provided it is not sold or otherwise used for commercial purposes Summary plans for adaptation and mitigation and full acknowledgement is given to the Average global temperature is currently actions. Accessing climate finance, Commonwealth Secretariat as the original publisher. estimated to be 1.1°C above pre- however, can be a significant undertaking

ISSN: 2071-2022 (print) industrial times. Based on existing trends, for countries with limited capacity to the world could cross the 1.5°C threshold produce climate finance proposals in a ISSN: 2310-2322 (online) within the next two decades and the 2°C format that secures funding from the Publications Section Commonwealth Secretariat threshold early in the second half of the major international and regional climate Marlborough House, Pall Mall century.1 The Commonwealth is home to funds. London SW1Y 5HX United Kingdom 2.4 billion people in 54 member countries, There are challenges in producing out of which 32 are small states. Members sufficient evidence, justification that are developing countries and island and climate rationale for proposed nations are the most vulnerable to the interventions. Obtaining the necessary consequences of climate change, for information to identify climate example, through food insecurity, rising vulnerabilities, estimate change and sea levels, exacerbation of floods and monitor the impacts is very difficult. droughts, and deteriorating ecosystems. Quality and unbiased data are therefore To prepare for the threats and address vital for making decisions in these areas. the impacts of climate change, developing Fortunately, advances in technology are countries and island nations require resulting in the emergence of more and climate finance to meet their national enhanced forms of data.

https://www.commonsensing.org.uk/

*This discussion paper was prepared by Clara Gallagher (Commonwealth Secretariat), with significant input The Commonwealth Secretariat through from Anthony Polack, Sharon Ng’etich, Uzoamaka Nwamarah, Unnikrishnan Nair and Bilal Anwar. It was peer its Commonwealth Climate Finance reviewed by Vintura Silva (UNFCCC). Views and opinions expressed in this publication are the responsibility Access Hub (CCFAH) is providing technical of the author(s) and should in no way be attributed to the institutions to which they are affiliated or to the assistance to Fiji, Solomon Islands and Commonwealth Secretariat. Vanuatu in utilising the geospatial based CommonSensing platform for enhanced access to climate finance. https://thecommonwealth.org/climate- finance-access-hub Commonwealth Secretariat Discussion Paper Number 27 • April 2021

Satellite data can be used for calculating observation (EO) data, information and baselines and reference conditions and for applications (see Box 1) as a means to manage measuring the direction and rate of change and address this problem and enhance the for projects relating to sea-level rise, flooding, development of robust climate finance land degradation, fisheries, coastal protection, proposals and enable better access to climate food security, exclusive economic zones finance streams. (EEZs) and marine agreements, for example. However, unless these earth observation (EO) Background data and information are made accessible and The impacts of climate change are evident and understandable for member countries, and there particularly apparent in small island developing is the capacity to utilise the data to source climate states (SIDS), least developed countries finance for projects and programmes, then the (LDCs) and other vulnerable states, with costs most vulnerable nations will remain at risk. to tackle these impacts being very high. It is CommonSensing is an innovative project estimated that by 2100, sea-level rise alone that is assisting the Commonwealth Pacific could incur economic costs of US$14 trillion small island developing states (SIDS) of Fiji, globally.2 Solomon Islands and Vanuatu in making these The decisions these countries make data and information readily accessible, along prior to and during events like cyclones or with the capacity building for technical staff of tropical storms are critical to adapting to, and national government agencies in utilising the surviving, the devastating climate change geospatial-based CommonSensing platform for impacts. Robust preparation for climate related developing bankable climate finance proposals. disaster is aided by satellite data. It aids the The provision of data and technical assistance to understanding of when and where disaster support the design of evidenced-based climate will strike, as well as the swift, co-ordinated change proposals with concrete justifications response needed to initiate recovery. It can can enhance access to climate finance. assist in the assessment of: damage to critical Improved use of data can contribute to turning infrastructure, for example, mapping damaged country priorities and Nationally Determined roads and bridges; landslides, erosion and Contribution (NDC) commitments into climate flooding; and of displaced person/refugee camp finance investment plans and projects, thereby growth/expansion. It can also improve the addressing the financing gap where the speed of reconstruction and recovery, so that implementation of many NDCs is conditional on funds are not delayed and can be more quickly external financing being received. disbursed towards climate resiliency.3 However, countries that are at risk from these extreme Problem statement events are often operating with access to only Access to climate finance is a challenge for many limited climate and weather data, and limited developing countries, including for small island climate observations, projections, impact developing states. Projects remain in the pipeline models and vulnerability assessments, for as they fail to provide sufficient justification for the example. climate rationale to receive funding. Resources Obtaining the necessary information to and capacity to provide the required evidence of identify climate vulnerabilities, estimate change that rationale are often constrained in developing and monitor the impacts is difficult. This countries, resulting in fewer bankable climate increases the risks of decisions being made that finance proposals being successful. are not sufficiently informed or justified, and that This discussion paper proposes the use are generally affected by the need to prioritise of satellite remote sensing (SRS) and earth competing economic development needs or

2 Earth Observation Technologies for Improved Access to Climate Finance

Box 1. What is earth observation (EO) and satellite remote sensing (SRS)? SRS is a broad term referring to observations made using any form of remote sensing technology from space. EO, a subset of satellite remote sensing, is ‘the process of acquiring observations of the Earth’s surface and atmosphere via remote sensing instruments’, with the data gathered being typically imagery. There are a variety of digital techniques used to generate images that allow for a range of data to be collected under various circumstances (cloudy, night-time, etc). Typically, EO gathers data on the physical chemical and biological systems of the planet, and space-based observations can be supplemented by ground-based data collection. Source: Newcomers Earth Observation Guide, available at: https://business.esa.int/ newcomers-earth-observation-guide#ref_1

the limited human and financial resources that super cyclones Amphan and Harold, when are available. This can be seen, for instance, manual data collection may be disrupted. where available resources are diverted towards These advances can provide the evidence and overburdened by the ongoing COVID-19 necessary to support and justify effective pandemic and the associated transport, trade climate action. and supply chain interruptions. However, if developing countries, like Pacific If policy-makers, decision-makers, project SIDS, cannot access and benefit from EO designers and technical support staff working data, information and applications to develop in various ministries do not have this data bankable climate finance project proposals, and information, then it is difficult for them to current inequities between these countries and develop the requisite policies, projects and others are likely to continue due to suboptimal actions required to tackle climate change. decision-making. Quality data to form an evidence base are The process of revising and implementing therefore vital for making informed decisions. Nationally Determined Contributions (NDCs) – Fortunately, advances in technology are the climate plans set out by each country under resulting in the emergence of more forms of the Paris Agreement – provides a crucial window data to support this kind of decision-making. for developing countries like SIDS to take on the Satellite EO data can be used broadly and use of EO tools. When the data generated are with other systems and applications, at micro made accessible, this can aid the transformation and macro scales, because it is reliable and of NDCs to investment plans, through which can be standardised, obtained regularly and countries can implement national aims. analysed easily. Data can be acquired with The CommonSensing project is an example different temporal (hourly, daily, weekly, of the innovative use of EO. It focuses on monthly), spatial (metres to kilometres) and developing national capacities for longer-term spectral (multi v hyper) resolutions, and from sustainability and business continuity by a particular period in time. EO data is also providing partner countries with the knowledge the only source for many of the Essential and skills sets for institutionalising evidence- Climate Variables (ECVs) (see Table 2) and based decision-making. This can help to can continue to be collected remotely during co-ordinate financing for implementing NDC times of crises, like during the aftermath of aims, but additionally the project seeks to

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improve evidence-based decision-making in To facilitate discussion, the paper is disaster preparedness and response, as well as structured around guiding questions: assessing climate risks. • What is the current status of accessing and using EO data in climate finance CommonSensing is an example applications? • How do the major climate funds evaluate the of the innovative use of EO. current use of EO data? • How can EO data improve the ‘bankability’ of The project does this by better utilising EO project proposals? technologies and remote sensing data, using • How is EO data able to buttress decision- local and global data sets to deliver an Analysis making? Ready Data (ARD) solution. These products are • How has the role of EO data changed since combined with capacity building to facilitate the global COVID-19 pandemic began? improved access to climate finance. ARD are pre-processed satellite data that have been EO data and technology and successful organised in a format ready for easy analysis climate finance applications through free and open-source data web portals Funds provided for climate action are and mobile applications, without the need for overwhelmingly channelled into mitigation additional processing by the user. Governments, projects, averaging 66 per cent of total reported supported by embedded Commonwealth public climate finance in 2017–18.4 Funding for national climate finance advisers, are able to adaptation – which is typically the priority for then use this data to produce higher-quality SIDS, LDCs and other vulnerable countries as applications to major climate funds. they seek to protect their populations from the impacts of climate change – is constrained. Moreover, within this smaller pool of funding, ‘The striking feature of the CommonSensing project is it has in 2017–18 only an estimated 20.5 per cent well positioned the Pacific islands with the requisite capacity of bilateral climate finance went to LDCs and for effective assessment and monitoring of climate and 3 per cent to SIDS.5 Within the major climate related socio-economic variables which translate in defining funds, projects in SIDS are ‘underrepresented’ and crafting meaningful climate financing projects for the throughout the stages of project pipeline region.’ development, with only 12 per cent of the funding proposal pipeline in the Green Climate Othniel Yila, PhD, Commonwealth National Climate Finance Fund (GCF) by October 2020.6 Adviser (CNCFA), Zambia (July 2020 to present), formerly Climate change and natural disasters are CNCFA, Tonga (April 2018–June 2020) impacting Commonwealth member countries and especially SIDS in many ways, affecting different sectors of national economies This discussion paper examines the current to different magnitudes. Determining the use of EO in accessing climate finance, looking particular vulnerabilities and routes to resilience at the role the major funds think that EO can in those sectors enables countries to seek play. The paper draws out the gaps where targeted climate finance to build capacity and major climate funds see poor use of the address the impacts of climate change.7 To do technology and links this to specific sections so, countries need to be able to identify and of the project cycle where the use of EO can prioritise the risks and provide a measurement buttress other forms of evidence-based of the impact of climate change on different project justification. sectors and levels of vulnerabilities therein. The

4 Earth Observation Technologies for Improved Access to Climate Finance

data provide an evidence base for justifying an The outcomes of a Pacific Commonwealth application for funding. Where there are gaps in Scientific and Industrial Research Organisation the data, solutions need to be found, along with (CSIRO) workshop on an Earth Observation ensuring that there is sufficient institutional and Platform to Support Pacific Island Nations’ human capacity to utilise the data effectively. Environmental, Climate and Livelihood Needs in 2018 reflected some of these issues at a What is the current status of accessing and using broader regional level.8 During this forum, EO data for climate finance applications? country representatives recognised that In CommonSensing partner countries, there thematic needs in the region could benefit is significant scope to improve access to and from an improved ability to exploit EO data. use of EO data in accessing climate finance. These thematic areas were identified to include Uptake of these tools in other countries is disasters (risk management and response), especially uncommon in low-income countries, planning (infrastructure, land use), environmental as there are many barriers preventing their full monitoring (oceans, terrestrial, biodiversity, utilisation. planning), food security (drought, freshwater), and The issue of capacity to collect or access EO national security (sovereignty, law enforcement). data is an important variable in understanding Notably, the focus remained on accessing and the use of this data. The preliminary baseline using data for monitoring and decision-making, evaluation of the CommonSensing project rather than as a tool to explicitly unlock improved found that, within the project countries, the access to climate finance. expertise in geospatial and remote sensing data EO data have a traditional role in financial collection and analysis was limited to a small products such as insurance and reinsurance: number of people across separate organisations. companies observe the environment of the Furthermore, the equipment being used could insured products to evaluate risk and assess be obsolete and of insufficient capacity. damage after a catastrophe.9 If data supporting In addition, capacity to then process and use climate-linked insurance show that extreme geospatial and remote sensing data is important. weather events are becoming more frequent As found in the same baseline evaluation, and intense, insurance premiums would increase. such data was rarely used for project planning However, using EO in more innovative ways could and decision-making, partially because senior ensure premiums are targeted and customised officials were not adequately engaged, resulting to specific environments and conditions, more in scarce government budget support. This accurately pricing premiums across different limited capacity was also cited in other studies, contexts. EO data are both used to develop more where climate finance fund requirements around granular insurance products as well as fixing the project feasibility, design and management are cost of the products; when used correctly they higher than the capacity of each SIDS. can manage risk and exposure more efficiently.10 In the same way that improved data sources Using EO in more innovative can help to price risk more efficiently, EO data could play a similar role in attracting more ways could ensure premiums blended finance products to a concept. By improving the quality of information available, are targeted and customised risk information asymmetry is reduced, and the private sector may be more willing to participate to specific environments and in climate action. One notable example of the beneficial use of EO conditions. and SRS technology is in Costa Rica’s application

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to the Global Environment Facility (GEF) for … The project developers may want to include a the full-sized project ‘Conserving Biodiversity map that specifies the provisions and demand through Sustainable Management in Production of biodiversity and ecosystem services based Landscapes in Costa Rica’, approved in 2016.11 on their indicators. A spatial distribution of The project sought to mainstream biodiversity the ecosystem services would be beneficial conservation, sustainable land management for monitoring purposes, assessing the value and carbon sequestration objectives into Costa of the ecosystem (for example, demand of an Rica’s production landscapes and urban biological ecosystem service is dependent on its spatial corridors. Costa Rica used EO to:12 characteristics, such as number of downstream water users), and developing policies.’ • provide evidence in justifying the project, precisely explaining land-use change over In this Costa Rican example, the utilisation of EO time and providing data on reduction of data to provide evidence of the country’s needs forest cover in terms of km2 of fragmented and also as a proposed tool for implementing and secondary forest and secondary forest; monitoring programme outcomes, resulted in • support the project as a form of co-financing, appreciation from the STAP at the review stage as the National Territorial Information System and ultimate success in securing approval for this is such a core decision-making tool for land- full-sized project. Costa Rica has invested heavily use planning; in building skills and tools that facilitate the use of • facilitate monitoring of land-use change EO14 and there are many lessons that can be learnt over the duration, which is used to track the in other countries seeking robust tools like EO and success of the project; and SRS to understand and evidence the changing • demonstrate innovation, sustainability and climate around them. scaling up potential. Crucially, the use of EO was appreciated by How do the major climate funds evaluate the the GEF Scientific and Technical Advisory Panel current use of EO data? (STAP) in its review of the proposal13 and it made Major climate funds, such as the Global suggestions for further uses of mapping to Environment Facility, Green Climate Fund and strengthen the application: Adaptation Fund, require strong justification and climate change-focused rationale for ‘STAP is pleased the project aims to improve approving project proposals. These funds have the geo-referencing capacity of the National been explicit about the role of EO in this in the Territory Information System (SNIT) to different ways outlined below. monitor land use change in private land under agricultural production. Major climate funds Satellite imagery will complement ground- based methods and data and help improve require strong monitoring and policies on biodiversity conservation and sustainable forest justification and climate management in the two target sites. STAP encourages UNDP and Costa Rica to continue change-focused sharing their learning on the use of remote sensing methods and data for the purposes of rationale for approving conserving biodiversity and improving forest management. project proposals.

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The Global Environment Facility (GEF) The Green Climate Fund (GCF) has not has recently increased the guidance provided produced explicit guidance on the use of EO data to GEF implementing agencies and their and technology, unlike other funds. However, in partners to make best use of EO data and various stages of the project development cycle, technology. This builds on a change in fund the climate rationale underpinning a project application requirements in 2017, when the must be evidenced. In adaptation projects, this Project Information Form (PIF) began to require means identifying the climate impacts, exposure that project proponents provide a map and and hazards resulting in climate risks.18 geo-coordinates of the project’s location. The GCF Independent Evaluation Unit Since then, the GEF has recognised that a PIF (IEU) has noted the need for strong baselines, map could benefit from being integrated with as it has found it difficult to evaluate some information derived from Earth observation, projects due to weak baseline data. These but there remains limited guidance on how weaknesses include incomplete, inconsistent this information should be provided. In 2020, or unclear baseline information, such as the Scientific and Technical Advisory Panel the unpredictability of flood frequency and (STAP) developed a primer and technical guide magnitude.19 It also noted the benefits of to illustrate how these data and tools could be collecting data from monitoring and evaluation used, and guidance on how to meet the PIF systems, such as EO, in that it is less resource requirements.15 intensive compared to stakeholder consultation. As noted in the evaluation of the use of EO The IEU identified, as an example of their technology and data in GEF implementing application, that satellite data can be used agencies, the application of such technology to analyse the effect of the rehabilitation of tends to be ‘one-off’ and project specific, mangroves on storm buffering.20 with a variety of approaches taken to The IEU uses Geographic Information System address similar environmental assessment (GIS) data to improve evaluations by immediately and monitoring challenges.16 STAP notes and independently collecting and validating that where GEF agencies (as opposed to information from projects for environmental national entities) have a centralised system and socioeconomic analysis on the ground. that systematically captures and stores For instance, it uses GIS data to carry out project information, the use of geospatial hotspot analysis (a spatial analysis and mapping data has increased. Regularising use of EO technique), and inverse distance weighting data and improving understanding of which interpolation (which estimates unknown approaches work well in different scenarios values).21 could enhance the pool of evidence available The IEU has recommended that the GCF for justifying finance proposals, as well as consider the establishment of an internal potentially reducing the time spent under innovation hub focused on early-stage climate review as common methods to address familiar innovations to support high-risk investments challenges emerge. in small and untested, but innovative, concepts The Independent Evaluation Office has that have the potential to scale up and/or recommended that the GEF makes greater be transformational.22 The use of EO and use of spatially explicit data for projects the CommonSensing project could provide addressing protected areas, biodiversity lessons or serve as a test case for this type of and land degradation, and more precision in innovation. recording and reporting project location for The Adaptation Fund’s own Second Phase monitoring and evaluation of progress, results evaluation, published in 2018, found similar and sustainability.17 weaknesses in using data and evidence to

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provide a strong climate rationale for the intervention. The evaluation found that ‘more The ‘bankability’ of than half of the proposals presented climate change scenarios broadly without clearly linking proposals is becoming proposed interventions and specific risks or climate drivers, and one-third of proposals more relevant as lacked evidence and baselines relating to local climate risks and impacts. While applicants may the proportion of be constrained by the lack of available data, these gaps were not systematically identified grant-based financing and acknowledged in the proposals’.23 The evaluation identified that ‘there is room for reduces. projects to further strengthen the adaptation climate finance. Box 2 provides brief resources rationale by improving the presentation of explaining how individual sections of the evidence (or gaps in evidence) more clearly and application forms to the major funds can benefit demonstrating how the proposed adaptation from using EO data. Across the various template measures address risks associated with relevant formats for climate finance applications and climate drivers’.24 proposals, there are commonalities in terms of Without explicitly referencing EO data or evidence and justification required. technology, the application of these techniques At a surface level, EO data support could fill evidence gaps relating to baselines, applications by generating maps that can climate rationale and the provision of robust pinpoint intervention locations. However, such evidence. data are most valuable in informing the decision- making process that leads to identification of How can EO data improve the ‘bankability’ of those project locations. Satellite remote sensing proposals? and EO tools can provide unbiased evidence The ‘bankability’ of a project originated as a for selecting an intervention in one community term in the finance referring to a return on over another, by providing data justifying why investment. However, within the international one area would benefit more. The literature on climate finance space, the term is also often used digital financial inclusion supports this idea, with interchangeably with words like ‘fundability’ and positive examples of using EO data to develop ‘eligibility’, especially in the context of grants rather models that could predict poverty in Ghana and than investments. Different funds have different Uganda, when used in conjunction with phone meanings of ‘bankability’.25 However, organisations call detail records and validated by ground-truth like the NDC Partnership understand this to surveys.28 mean producing convincing project feasibility The ‘bankability’ of proposals is becoming assessments and project financial structuring, more relevant as the proportion of grant- and accessing international sources of finance based financing reduces amid an increase in through the development of successful project volume of blended finance and purely loan- concept notes and proposals.26 based financing, whether on concessional or In a working paper explicitly looking at the commercial terms. The provision of climate idea of ‘bankability’ in the climate finance sphere, finance in grant or grant equivalent form barely access to data and information was found to changed between 2015 and 2018 (from US$11 be critical in developing project proposals.27 At billion to US$12.5 billion), yet the provision of various stages throughout the project cycle, EO concessional, non-concessional and other non- data can enhance the strength of a proposal for grant finance has increased significantly.29

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Box 2. EO Data in applications forms of the GEF and GCF GEF In applications to the GEF, EO data can enhance the concept development, project preparation, implementation and monitoring and evaluation phases: • Concept development: In the PIF, EO can be used in the provision of data for mapping the project location and interventions, to assess the baseline and trends, to quantify core indicators, and to review environmental safeguards. • Project preparation: at the stage of CEO endorsement, EO can improve project location specificity, following discussion with stakeholders, and can help finalise core indicators. • Implementation and monitoring: in the mid-term review or evaluation process, EO can provide a tool to monitor progress against indicators, visualise status and trends for adaptive management, and can refine project location and interventions. • Evaluation: during the terminal evaluation, EO can be used to review results against indicators, pinpoint final project locations and intervention areas (if changed), and can analyse project impact (including long-term, intended and unintended consequences).

GCF The GCF project development cycle involves three key stages: (i) GCF project identification, (ii) concept note development and (iii) funding proposal elaboration. EO can assist with each stage. For instance, in Section B.1 of the GCF funding proposal form, the adaptation needs must be described and justified. This includes providing data on the target region of the proposed intervention(s), including information on the demographics, economy, topography, etc. The baseline scenario and the methodologies used to derive this information in the feasibility study (detailed at Section H.1, Annex 2 of the application) must also be referenced. While geospatial information and tools are increasingly more accessible, simple annexes with project location maps are frequently missing from funding proposals in Section H.2, Annex 16, which requires a map(s) indicating the location of the proposed interventions. This might be indicative of poor overall map literacy, but also poses challenges to transparent and independent project monitoring and evaluation. EO can provide support in this area. EO can also assist with application Sections D.1, impact potential, D.2, scaling up and replication potential, D.4, needs of the recipient (scale and intensity of vulnerability), F, risk assessment and management, and the environmental and social analyses at H.1, Annex 6. EO can assist in conceptualising country ownership of GCF projects in Section D.5. This can be done by building local capacity of the national designated authority (NDA)/focal point/key staff, the development of decision-making tools and national systems, and by allowing countries to collect, store and manage their own data and information. This can demonstrate that projects are locally driven and aligned with national climate strategies and programmes. In Section D.3, sustainable development, EO can assist with improving the identification, estimation/ quantification, and monitoring of environmental and social co-benefits of a project. Furthermore, data on specific indicators must be collected during the monitoring, reporting and verification (MRV) of the project to demonstrate that the GCF core, fund-level impacts and outcomes and project performance results have been met. EO is valuable in supporting this process. Sources: STAP (2019), GCF (2019), GCF IEU (2020a), GCF IEU (2019), GCF IEU (2020b).

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When accessing blended or loan-based results of the GEF Independent Evaluation Unit, finance, a proposal must demonstrate both outlined in Section 3.2 above, uptake of EO credit worthiness and then additionally secure data has been heterogenous across projects realistic terms. For instance, interest rates and countries. For instance, the GCF project in should be appropriately low and risk profiles Vanuatu (‘Climate information services for resilient must be accurate. Information asymmetry development in Vanuatu’) involves the collection can distort these components, resulting in of climate data through EO. The Adaptation Fund barriers or higher costs to climate action. EO projects in Solomon Islands (‘Enhancing resilience can provide valuable evidence in assessing of communities in Solomon Islands to the adverse the risks associated with any given project and effects of climate change in agriculture and food financial viability. In presenting the case for credit security’ and ‘Enhancing urban resilience to climate worthiness, EO data can support instances change impacts and natural disasters: Honiara’) where, for instance, revenue generation is based used, respectively, EO data and satellite sea- on natural processes, like electricity generation level rise data in their supporting background from hydropower. EO can provide justification information. Many other proposals mention the for expected power generation (and thus need for more utilisation of EO data, but do not income) based on rainfall trends, flow rates, explicitly use the tools in supporting the proposal etc., across the year. This data can support the (for instance, Fiji’s readiness application to the financial arrangements section of a proposal to Carbon Fund of the Forest Carbon Partnership justify the financial exit strategy. Facility). In a similar vein, demonstrating realistic and There is significant scope to improve and evidence-based expectations on rates of return, assist climate finance project submissions by cost-benefit ratios and the general investment using EO and capacity building to strengthen potential of an intervention can be supported the supporting information for the climate through satellite remote sensing and EO data, finance requirements. For instance, in Vanuatu, especially in mitigation projects. the utilisation of EO data for project design Producing bankable proposals, without delays and implementation has been undertaken in spent adjusting time-consuming iterations of an ad hoc manner, with higher utilisation in an original submission, is key in progressing the energy, forests and land-use, disaster risk projects from the pipeline to implementation. reduction, agriculture and water sectors.30 As, for instance, the GCF Board only meets Should Vanuatu seek to access climate finance periodically, there is a risk of climate actions to support adaptation in the transport sector, for being delayed, as poor project proposals that instance, increased uptake of EO could enable lack convincing supporting information fail to the government to provide data on the impacts progress at a given board meeting. It is critical of climate change stressors or hazards (heavy to make full use of accurate and relevant data rainfall and sea-level rise, and associated coastal to improve these proposals, so ensuring that and inland flooding, as well as landslides and soil quality project proposals are received and erosion) on road networks and bridges over time. approved in a timely manner. This information can be used to inform policy- makers of transport infrastructure that is most at Projects accessing climate finance and EO risk and in need of maintenance, and can provide uptake in the CommonSensing project partner important baseline data for funding applications countries to address the infrastructure improvements. Fiji, Solomon Islands and Vanuatu have accessed Provision of such data could inform the climate funds from a range of climate finance sources, rationale, reference conditions, baseline, impact, as shown in Table 1. However, aligning with the scaling up and replication potential, needs and

10 Earth Observation Technologies for Improved Access to Climate Finance 1.93 0.55 6.73 8.25 27.07 14.17 19.53 30.71 137.26 246.20 Total sum Total of amount funding of approved millions) (USD 3 4 2 2 4 8 7 4 1 35 Total number of projects 9.93 3.59 3.49 19.26 16.36 13.77 66.40 Sum of amount funding of approved (USD millions) 2 1 2 5 4 2 16 Vanuatu Number of projects ) 31 9.93 2.64 3.14 0.95 0.55 14.35 13.30 86.00 130.86 Sum of amount funding of approved (USD millions) 2 1 1 1 1 3 2 1 12 Solomon Islands Solomon Number of projects 9.60 2.12 0.98 4.24 32.00 48.94 Sum of amount funding of approved (USD millions) 1 2 1 1 2 7 Fiji Number of projects

Climate funds accessed February to (data: 2020 Climate Update Funds Fund Name Fund (AF) Fund Adaptation Partnership Carbon Forest Facility – Readiness Fund (FCPF–RF) Global Climate Change Alliance (GCCA) Facility Environment Global (GEF4) Facility Environment Global (GEF6) Green Climate IRM Fund IRM) (GCF Least Developed Countries (LDCF)Fund Scaling Up Renewable Energy Program (SREP) UN-REDD Programme total Grand Table 1. Table

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vulnerability, risk assessment and management, Tools can be developed, using EO data for environmental and social analyses, and MRV improved risk and vulnerability assessment, that processes of a funding application. observe the direction and rate of environmental and climatic change over time, make future How is EO data able to buttress decision- projections, and then compare and analyse making? the data to determine the significance of any Responding to climate and natural disasters potential climate risks. The use of satellite EO, a form of remote It is for these reasons that satellite sensing,32 is growing quickly because of its EO data are critical in supporting the being able to: observe the dynamic changes management of, and response to, climate and in the environment and the climate, better disaster events, especially as they operate assess risk and understand vulnerability, and continuously and are located at a great support evidence-based decision-making when distance from any possible damage during addressing climate change at the global level. crises like cyclones or landslides. In addition, For instance, it was invaluable in tracking Tropical EO data are becoming more and more available Cyclone Harold (Figure 1). and reducing in cost over time, increasing their EO provides broad climate and environmental accessibility.33 coverage, from micro to macro scales, allowing Technically, EO can provide data on significant the monitoring of isolated and inaccessible variables and specifically to nearly half the locations. Furthermore, EO allows the rapid Essential Climate Variables (ECVs) – as marked in provision of precise and comparable data for bold in Table 2. improved analysis, whether these events occur These data can be applied to decision-making in the Pacific, Caribbean or Indian Ocean, for across several themes: example. • Land surface use, change, climatology, geology, vegetation and ecosystems EO provides • Disaster and risk hazard preparedness, response, and management broad climate and • Environmental assessments • Volcano monitoring environmental coverage, • Public health • Climate and disaster risk and resiliency allowing the monitoring communication and investment • International agreements, migration and of isolated and security inaccessible locations. • Renewable energy potential Often, needs within these themes are prevalent across national jurisdictions in EO can also be used in tandem with other different ways. EO can support justification technologies like GIS, for instance, for post- for domestic decision-making in identifying disaster situational analysis. It can be used with specific areas for investment – for example, other forms of remote sensing, environmental by providing evidence-based justification modelling, artificial intelligence (AI) and for selecting one town over another for an algorithms to establish comprehensive decision adaptation project. EO can inform these support systems to justify why a particular kinds of decisions by providing validation, bias climate action may be needed. correction and incremental improvement.

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Figure 1. Tropical Cyclone Harold – Solomon Islands, Vanuatu and Fiji (2–8 April 2020)

Responding to other shocks, like health disasters measures. Hence, the ability to access climate The COVID-19 pandemic is creating high finance effectively is becoming increasingly costs worldwide, both in terms of human relevant. suffering and economic damage. LDCs and SIDS are especially vulnerable to the economic LDCs and SIDS are impact of COVID-19, due to the lack of domestic financial resources, high debt levels especially vulnerable to and fragile health systems. UN Department of Economic and Social Affairs modelling the economic impact suggests that growth of per capita income in LDCs and SIDS may need about four to five of COVID-19, due to years to be able to return to the projected path under the baseline scenario without the the lack of domestic COVID-19 crisis, based on the slower recovery felt in LDCs and SIDS after the 2008 global financial resources, financial crisis.34 In combatting the economic downturn high debt levels and around the world, leaders are faced with investment decisions that will either entrench fragile health systems. our dependence on fossil fuels or put us on a path to achieve the Paris Agreement and Vulnerable countries are not able to postpone the Sustainable Development Goals (SDGs). climate spending while managing the impacts In the context of investment decisions in of COVID-19 on other sectors of the economy. developing countries, LDCs and SIDS must be Using all the evidence available, including EO able to access long-term affordable finance data, is one route to preventing investment in to develop and implement green stimulus maladaptive projects or sectors.

13 Commonwealth Secretariat Discussion Paper Number 27 • April 2021

Table 2. Satellite EO makes a major contribution to the ECVs in bold

Domain Essential Climate Variables Atmospheric Surface: Air temperature, Wind speed and direction, Water vapour, Pressure, (over land, Precipitation, Surface radiation budget sea and ice) Upper-air: Temperature, Wind speed and direction, Water vapour, Cloud properties, Earth radiation budget (including solar irradiance) Composition: Carbon dioxide, Methane and other long-lived greenhouse gases, Ozone and Aerosol, supported by their precursors Oceanic Surface: Sea-surface temperature, Sea-surface salinity, Sea level, Sea state, Sea ice, Surface current, Ocean colour, Carbon dioxide partial pressure, Ocean acidity, Phytoplankton Sub-surface: Temperature, Salinity, Current, Nutrients, Carbon dioxide partial pressure, Ocean acidity, Oxygen, Tracers Terrestrial River discharge, Water use, Groundwater, Lakes, Snow cover, Glaciers and ice caps, Ice sheets, Permafrost, Albedo, Land cover (including vegetation type), Fraction of absorbed photosynthetically active radiation (FAPAR), Leaf area index (LAI), Above-ground biomass, Soil carbon, Fire disturbance, Soil moisture

Source: ESA (2015), Satellite Earth Observations in Support of Climate Information Challenges, available at: https:// catalogue.unccd.int/577_ESA_CEOS_EOHB_2015_COP21.pdf

Looking forward states to the changed climate and mitigate Satellite remote sensing and Earth observation further increases in global warming. Yet, without technology can be used in many innovative funding, these national plans will be unachievable ways to support access to climate finance, for many SIDS and LDCs. beyond the typical uses of the technology EO technology as a standalone tool cannot in disaster risk reduction and adaptation fill the evidence-gap in proposals for climate planning. finance. This takes interpretation, correct As competition increases to access limited identification of which variables impact a given climate funds and the global push to ‘build back project’s sustainability and financial viability, as better’ from the economic shock of COVID-19 well as the communication skills to translate this grows, using data to make evidence-based technical information into relatable justification decisions becomes more important than for an intervention. There is a pressing need ever. Demonstrating the climate rationale in a to invest in the skills of technical practitioners proposed intervention, calculating baselines based in climate-vulnerable and low-income and reference conditions, and measuring the countries to leverage this technology for the direction and rate of change for key project betterment of access to climate finance in the variables can all be supported by EO data places that need it most. (see Box 3). The cross-over between satellite remote The CommonSensing Project seeks to sensing and EO data specialists and those with address the problem of converting concepts a keen understanding of the requirements of of climate action into proposals and bankable bankable climate financial proposals is exciting projects by using EO technology to provide the territory, and one which must be expanded to required evidence base. Nationally Determined increase the flow of finance to the most climate- Contributions outline ambitious plans to adapt vulnerable states on Earth.

14 Earth Observation Technologies for Improved Access to Climate Finance

Box 3. EO data as a tool for progress during COVID-19 • Value chains have been severely impacted by COVID-19: the observation of airports, maritime transportation, road and industrial sites using EO data and technology contributes to our understanding of the economic impact of the pandemic around the world. • Travel has been disrupted: EO provides data in geographical areas that are currently hard to reach due to travel restrictions. • Norms on social gatherings have been disrupted: EO can provide unbiased evidence for project MRV, where independent verification through focus groups is currently unfeasible. • Food production has been disrupted: under lockdowns, producers may struggle to mobilise labour to plant, tend and harvest crops. EO data supported an evaluation of rice crops in China during the early phase of the pandemic. • Planning for resilience: COVID-19 has demonstrated how unprepared the world is for disruptive shocks. Preparedness, response and resilience to better manage risks must drive recovery plans, national investments and response measures that are not immediately directed at the health crisis. EO data can provide evidence, justification and support the rationale for sound investment decision-making. Source for bullet point 4: Guo 202035.

Notes 4 Carty, T, J Kowalzig, and B Zagema (2020), 1 Bayat-Renoux, F, et al. (2020), ‘Tipping Climate Finance Shadow Report 2020: Assessing or Turning point: Scaling up climate progress towards the $100 billion commitment, finance in the era of COVID-19’, Oxfam, available at: https://www.oxfam. GCF Working Paper No.3, October, org/en/research/climate-finance-shadow- available at: https://www.greenclimate. report-2020 (accessed 22 March 2021). fund/sites/default/files/document/ 5 Carty et al. 2020 Op. cit. note 4. gcf-working-paper-tipping-or-turning-point- 6 GCF Independent Evaluation Unit scaling-climate-finance-era-covid-19.pdf (2020), ‘Independent Evaluation of the (accessed 22 March 2021). Relevance and Effectiveness of the Green 2 IOP Publishing (2018), ‘Rising sea levels could Climate Fund’s Investments in the SIDS cost the world $14 trillion a year by 2100’, Science (SIDS2020)’, October, available at: https:// Daily, 3 July, available at: www.sciencedaily. ieu.greenclimate.fund/evaluation/sids2020 com/releases/2018/07/180703190745.htm (accessed 22 March 2021). (accessed 22 March 2021). 7 The IPPC defines vulnerability as the propensity 3 Although satellite imagery has some or predisposition to be adversely affected. limitations in that it is not detailed enough Vulnerability encompasses a variety of to map sub-metre features and cannot concepts and elements, including sensitivity penetrate cloud cover, for example, in or susceptibility to harm and lack of capacity assessing damage to buildings, it is adequate to cope and adapt. IPCC (2014), ‘AR5 Climate for flooding, erosion and landslides, along Change 2014: Impacts, Adaptation, and with associated damage to roads or bridges. Vulnerability Annex II’, available at: https://www. Where there are clouds obscuring images, ipcc.ch/site/assets/uploads/2018/02/WGIIAR5- images can be fused from multiple images, AnnexII_FINAL.pdf (accessed 22 March 2021). from cloud-free days and from orbital 8 Steven, A, et al. (2019), An Earth Observation satellites to provide one clear image. Platform to Support Pacific Island Nations

15 Commonwealth Secretariat Discussion Paper Number 27 • April 2021

Environmental, Climate and Livelihood 16 STAP (2019), ‘Earth Observation and the Needs – Consultation Workshop – Final Report, GEF’, GEF/STAP/C.57/Inf.06, December, Commonwealth Scientific and Industrial available at: https://www.thegef.org/sites/ Research Organisation, available at: https:// default/files/council-meeting-documents/ research.csiro.au/cceo/wp-content/uploads/ EN_GEF.STAP_.C.57.Inf_.06_Earth%20 sites/252/2018/10/Final-report-EO4Pacific. Observation%20and%20the%20GEF.pdf pdf (accessed 22 March 2021). (accessed 22 March 2021). 9 Innovate UK and Catapult Satellite Applications 17 Ibid. (2018), Routes to Market Report 18 – Satellite 18 Fayolle, V and M Dhanjal (2020), ‘Green Technologies for Insurance Services, available Climate Fund Proposal Toolkit 2020’, at: https://sa.catapult.org.uk/wp-content/ Acclimatise and Climate and Development uploads/2018/12/18-Insurance-Services1.pdf Knowledge Network, London, available at: (accessed 22 March 2021). http://www.acclimatise.uk.com/wp-content/ 10 Barry, N, (2020), ‘Space for Finance in uploads/2020/06/GCF-Funding-Proposal- Developing Countries’, UK Space Agency Toolkit-2020.pdf (accessed 22 March 2021). International Partnership Programme, 19 DeCoste, S, and J Puri, (2019), ‘Complexity, available at: https://assets.publishing. climate change and evaluation’, IEU Working service.gov.uk/government/uploads/ Paper No. 02, GCF Independent Evaluation system/uploads/attachment_data/ Unit, available at: https://ieu.greenclimate. file/858971/118601_UKSA_Finance_ fund/document/complexity-climate-change- Report_2019_EL_v9_WEB.pdf (accessed 22 and-evaluation (accessed 22 March 2021). March 2021). 20 Ibid. 11 GEF (2016), ‘PDF: PIF Document for WPI 21 GCF IEU, Datalab, available at: https://ieu. (Revised)’, Costa Rica Project ID 9416, greenclimate.fund/ieu-datalab (accessed 22 available at: https://www.thegef.org/ March 2021). project/conserving-biodiversity-through- 22 GCF IEU (2019), ‘Forward-Looking sustainable-management-production- Performance Review of the Green Climate landscapes-costa-rica Fund, Final Report’, available at: https:// 12 Ibid. ieu.greenclimate.fund/evaluation/fpr2019 13 GEF (2016), ‘PDF: STAP Review (PDF)’, Costa (accessed 22 March 2021). Rica Project ID 9416, available at: https://www. 23 Adaptation Fund (2018), ‘Second Phase of thegef.org/project/conserving-biodiversity- the Overall Evaluation of the Fund’, AF Board through-sustainable-management- Ethics and Finance Committee, 22, 15 March, production-landscapes-costa-rica (accessed available at: https://www.adaptation-fund. 22 March 2021). org/wp-content/uploads/2018/03/AFB. 14 Monge, R, et al. (2020), ‘Combining Earth EFC_.22.9_Evaluation-of-the-Fund-Phase-II. Observation and Policy to Put Ecosystems pdf (accessed 22 March 2021). at the Heart of Resilient Development in 24 Ibid. Costa Rica’, available at: https://unfccc. 25 Ellis, C and K Pillay (2017), ‘Understanding int/sites/default/files/resource/EID%20 “bankability” and unlocking climate finance Poster%20T2_Costa%20Rica.pdf (accessed for climate compatible development’, CDKN, 22 March 2021). available at: https://cdkn.org/wp-content/ 15 GEF (2019), ‘Earth Observation and the GEF’, uploads/2017/06/CDKN_unlocking-climate- December, available at: https://www.stapgef. finance.pdf (accessed 22 March 2021). org/resources/advisory-documents/earth- 26 Morton, S, and S Bee (2020), ‘Understanding observation-and-gef (accessed 22 March 2021). NDC Financing Needs’, April, available

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at: https://ndcpartnership.org/sites/ changes. It enables an interoperable access default/files/Understanding%20NDC%20 and processing of Big EO Data repositories. It Financing%20Needs%20Insight%20Brief.pdf increases the data value chain by facilitating (accessed 22 March 2021). the generation of EO products. It is a scalable 27 Ellis, C and K Pillay 2017, Op. cit. note 25. and efficient framework that can be used in 28 Heitmann, S and S Buri (2019), ‘Poverty various disciplines. It helps users access and Estimation with Satellite Imagery at process large volumes of targeted EO data; Neighborhood Levels: Results and Lessons and iii) Light Detection and Ranging (LiDAR) for Financial Inclusion from Ghana and technology. Airborne survey LiDAR measures Uganda’, IFC, available at: https://www. distance (height or depth), maps coral reefs, ifc.org/wps/wcm/connect/2cae89ee- plans construction sites, monitors land dea3-4a7e-ba79-77c9011cbd0f/ subsidence, detects changes in vegetable IFC_2019_Poverty+Estimation+with+Sa growth and is valuable for calculating tellite+Imagery+at+Neighborhood+Leve inundation levels, drainage, catchment ls.pdf?MOD=AJPERES&CVID=mHZhcxB boundaries, water flow and water sinks. (accessed 22 March 2021). 33 Ng’etich, S (2019) ‘Leading the fight from 29 Carty et al. 2020 Op. cit. note 4. above: Space technologies for enhanced 30 Tonkin and Taylor (2020), ‘Vanuatu Overview climate action, Part 1 and Part 2’, Blog, Phase 1: CommonSensing Climate Finance Commonwealth Secretariat, available at: Overview’, CommonSensing Project, 10 https://thecommonwealth.org/media/ [currently not in public domain]. news/blog-leading-fight-above-space- 31 Overseas Development Institute (ODI) and technologies-enhanced-climate-action HB Stiftung (2020), Climate Funds Update, and https://thecommonwealth.org/media/ February 2020, ‘Data Dashboard’, available news/blog-leading-fight-above-space- at: https://climatefundsupdate.org/data- technologies-enhanced-climate-action-2 dashboard/#1541245745457-d3cda887-f010 (accessed 22 March 2021). (accessed 24 December 2020). 34 Kim, N (2020), ‘How long will it take for LDCs 32 Other forms of remote sensing include and SIDS to recover from the impacts of the following: i) Shuttle Radar Topography COVID-19?’, DESA Working Paper No. 170, Mission (SRTM), which is an international October, available at: https://www.un.org/ research effort that obtained digital elevation en/desa/how-long-will-it-take-ldcs-and- models on a near-global scale from 56° S sids-recover-impacts-covid-19 (accessed 22 to 60° N, to generate the most complete March 2021). high-resolution digital topographic database 35 Guo, H, (2020), ‘Blog: Big Data Platforms of Earth prior to the release of the ASTER for a Global Pandemic’ UN Sustainable GDEM in 2009; ii) Live Monitoring of Earth Goals Knowledge Platform, https:// Surface (LiMES), which is a framework for sustainabledevelopment.un.org/?page=view spatio-temporal monitoring of land-cover &nr=1656&type=230&menu=2059.

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