Rwanda’s Ministry of Finance and central bank are beginning to integrate climate change into their economic modeling, risk assessments, and forecasting, currently relying on external tools and assistance, e.g., from the IMF and World Bank, yet building capacity is challenging.
The dominant challenge for deepening the integration of climate change into analytical frameworks is the lack of staff and skills, which also limits the current potential for in-house capacity-building. There is room for deeper coordination and collaboration within and between government agencies to help mainstream climate in analytical frameworks.
- The key limiting factors in using and further exploring climate-related components in analytical work are the lack of a sufficient number of staff and, relatedly, a lack of necessary skills. Hence, analytical work to support revisions of Rwanda’s Nationally Determined Contribution (NDC) will continue to rely heavily on external consultants.
- Collaboration with external partners, including internationally, is crucial, as Rwanda’s current labor market does not provide the necessary skills in sufficient quantities to build capacity independently. As such, the Banque Nationale du Rwanda (BNR) taskforce for integrating climate change into analytical tools collaborates with other central banks. Building such embedded institutions can be supported technically and financially by, e.g., the CFMCA and the NDC Partnership.
- While building internal capacity (e.g., by placing external experts in relevant teams) is desirable in itself, limited staff capacity currently prevents this from being effective.
- There is room for more coordination between teams and disciplines, e.g., between research and policy teams, and data scientists and economists, both within and across government ministries.
Having already started to integrate climate change into its economic forecasts via qualitative data on food price expectations and the impact of rainfall on crops obtained via local surveys, concrete next steps for the BNR include updating short- or near-term forecasting with quantitative meteorological data from satellites in collaboration with the meteorology agency. A broader issue is that climate-economy models tend to be tailored to advanced economies. The World Bank’s centrally developed and locally calibrated MANAGE model helps overcome this issue, but more work is needed on adapting IAMs to developing-country contexts.
It is unclear whether retrofitting existing models with climate modules or adopting new models with climate modules already built in is preferred. The latter approach is currently prevalent in Rwanda, though a concern is that this is less efficient, as changing models entails adaptation to a new modeling approach.
Keywords
capacity buildinginternational collaborationlocalmodelstechnical assistance
