Climate Finance in the negotiations

Introduction
Climate change is a global problem. The contributions of different countries and their ability to cope with and prevent its effects are vastly varied. Parties who have more resources are expected to provide financial support for those with less and greater vulnerability. The developed country Parties (Annex I Parties) will offer financial resources to developing country Parties to implement the Convention. The Convention created a Financial Mechanism for the provision of funds to developing countries’ Parties.

Article 11 of the Convention states that one or more international entities will operate the Financial Mechanism. Global Environment Facility is partially responsible for the operation of the Financial Mechanism. The Parties at COP 17 decided to designate the Green Climate Fund as the operating entity of the Convention’s Financial Mechanism, according to Article 11 of the Convention. The Financial Mechanism reports to the COP, which determines its climate change policies and program priorities, as well as eligibility criteria for funding.

Article 11 of the Kyoto Protocol recognizes the need for a Financial Mechanism to finance activities by developing countries’ Parties.

The Parties, in addition to guiding GEF, have established four special funds. These include the Special Climate Change Fund and the Fund for Least Developed Countries (LDCF). GEF manages both.

The Standing Committee on Finance was established at COP16 to help the COP with its responsibilities in relation to the Convention’s Financial Mechanism.

The work program on Long-Term Finance was launched at COP 17 in Paris and extended by one year to COP 18 in Warsaw, and it concluded its activities at COP 19. In decision 3/CP.19 of COP 19, activities for long-term climate financing were included. This covered the period from 2014 to 2020. The activities include biannual submissions from developed countries Parties about their strategies and methods for scaling up climate financing between 2014 and 2020, workshops in session to facilitate discussions on long-term finance, and biennial high-level ministerial conversations on climate finance beginning in 2014. For more information, click here.

Provides more information about funding for climate change activities.

Climate Finance and the Paris Agreement

In Article 9 of the Paris Agreement, countries’ Parties are required to provide financial resources in order to assist countries’ Parties both with mitigation and adaptation as part of their obligations under the Convention. Other Parties should be encouraged to continue or provide this support on a voluntary basis.

As part of the global effort, developed countries’ Parties must continue to lead the way in mobilizing finance for climate change from a range of sources, instruments, and channels. They should also recognize the important role played by public funds and take a number of measures, such as supporting country-driven strategy, while taking into consideration the needs and priorities of developing countries’ Parties. This mobilization of climate financing should be a step forward from previous efforts.

The provision of increased financial resources is also stated in Article 9, which states that it should be aimed at achieving a balance between mitigation and adaptation while taking into consideration the country-driven strategies and the needs and priorities of developing countries Parties. This includes those who are most vulnerable to adverse climate changes and have significant capacity constraints, like the least developed and small island developing states, as well as those who need public and grant-based adaptation resources.

In relation to the ex-ante disclosure of information, developed countries’ Parties will communicate biennially quantitative and qualitative indicative information relating to paragraphs 1, 3, and Article 9 as applicable. This includes, if available, projected levels for public financial resources that are to be provided to developing countries’ Parties. The other Parties who provide resources are encouraged by the UN to share this information biennially on a voluntary basis.

The global stocktake, referred to in Article 14 (of the Agreement), shall take into consideration the information provided by developed countries Parties or Agreement bodies regarding efforts related to climate financing.

In order to ensure transparency, the developed countries’ Parties must provide consistent and transparent information about the support provided and mobilized for developing country Parties through public interventions. This is done biennially. The other parties are encouraged to follow suit.

The Standing Committee on Finance and the Financial Mechanism of the Convention (including its operating entities) will serve as the financial mechanisms of this Agreement. Article 9 also states that institutions serving the Agreement, such as the operating entities, will aim to provide efficient access to economic resources by simplifying approval procedures and enhancing readiness support to developing country parties, especially for the small island developing countries and the least developed nations, within the context of national climate strategies and plans.

The COP 21 also decided that the developed countries will continue to pursue their collective mobilization goals through 2025 in the context of meaningful actions to mitigate climate change and transparency regarding implementation. Prior to 2025, the Conference of the Parties acting as the Meeting of the Parties to the Paris Agreement (CMA) shall establish a new quantified collective goal starting at a minimum of USD 100 billion annually, taking into consideration the needs and priorities of developing countries.

The COP also decided to conduct a facilitative dialogue in conjunction with the twenty-second session of the Conference of the Parties. This was to assess the progress in implementing decision 1/CP.19, paragraphs 3 and 4, and identify relevant opportunities to enhance financial resources, including for technology development and transfer and capacity building support. Parties decided to hold a facilitative dialog in conjunction with the Twenty-second Session of the Conference of the Parties in order to assess the progress made in implementing paragraphs 3 and 4 of decision 1/CP.19 and to identify opportunities for enhancing the provision of financial resources. This includes technology transfer, capacity-building, and other forms of funding.