European Capacity Building Initiative for Climate Change Negotiations and Financial Transparency

initiative europenne de renforcement des capacits european capacity building initiative ecbi ecbi european capacity building initiative The 2015 Paris Agreement III. Finance Benito M ller Director ecbi, Head of Fellowship Programme for sustained capacity building in support of international climate change negotiations pour un renforcement durable des capacit s en appui aux n gociations internationales sur les changements climatiques

III. Finance ecbi european capacity building initiative 3.1. Commitments/contributions How to ensure transparency of financial commitments/contributions? What legal forms of financial INDCs should be made available in the Agreement? Should there be a collective aim, and if so, how should it be determined? Should there be differentiation , and if yes what type? 3.2. Institutional arrangements, cooperation and coordination How should existing institutional arrangements (e.g. the GCF, the Convention/KP Funds, the Standing Committee) be related to the Agreement? Should South-South and triangular cooperation be promoted, and if so how?

3.1. Commitments/contributions How to ensure transparency of financial commitments/contributions? ecbi european capacity building initiative 3. 4. 7. Biennial assessment and overview of climate finance flows. Fifth review of the financial mechanism. Coherence and coordination: the issue of financing for forests, taking into account different policy approaches. MRV of finance beyond the biennial assessment and overview of climate finance flows. 8.

3.1. Commitments/contributions How to ensure transparency of financial commitments/contributions? SCF.8 Annotated Agenda ecbi european capacity building initiative Background: COP 17 decided that the SCF shall assist the COP in exercising its functions with respect to the FM of the Convention in terms of MRV of support provided to developing countries. At COP 19, Parties invited the SCF to consider ways to increase its work on MRV of support beyond the BA in accordance with its work plan for 2014-20154 and its mandates. In decision 5/CP.18, developed country Parties were invited to submit to the secretariat, by May 2014, information on the appropriate methodologies and systems used to measure and track climate finance.0 ecbi SCF Caucus Comment on Methodological Issues on MRV of finance The exposition of the idea of MRV of support received does not do justice to the discussions we had on this matter at the last meeting As Seyni mentioned at this meeting in his verbal report to the SCF plenary on the break-out discussions of the Working Group on agenda item 8 (MRV of finance beyond the biennial assessment and overview of climate finance flows) There was an idea of having donors notify the [UNFCCC] focal points so that just the information exists . The idea Seyni refers to was very simple: require any Party who wishes to claim a payment as climate change support for a developing country to notify a designated authority (for example the UNFCCC focal point) in that country that they have done so. The idea thus stops short of requiring a certification by the recipient that the funding conform to some criteria (which I personally would advocate), but it simply means that the recipient countries are actually aware of what is being claimed as having been provided to them.

3.1. Commitments/contributions What legal forms of financial INDCs should be made available? ecbi european capacity building initiative External allocation ratio Use an existing formula for the allocation of expenses e.g. the UN scale of assessment. Burden-sharing agreement Quantified burden-sharing of financial commitments listed in an Annex. Contribution reference level Contribute at least X% of Gross Domestic Product Subsequent decisions Decision by the Meeting of Parties on total and individual contributions based on recommendations by the Standing Committee on Finance.

3.1. Commitments/contributions Should there be a collective aim, and if so, how should it be determined? ecbi european capacity building initiative

3.1. Commitments/contributions Should there be differentiation , and if yes what type? Political Realities ecbi european capacity building initiative GDP/cap $90,000 Group of 77 and China $80,000 OECD $70,000 $60,000 $50,000 $40,000 Qatar $30,000 $20,000 $10,000 $- Given OECD capability levels, it has been argued that some of the better off G77 + China countries should contribute to the GCF. It has also been argued that this would contradict the CBDR Principle, which should be the only relevant principle in terms of obligations to contribute to the GCF.

3.1. Commitments/contributions Should there be differentiation , and if yes what type? Options ecbi european capacity building initiative Variant Option:: Promotion of South-South cooperation

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3.2. Institutional arrangements, cooperation and coordination How should existing institutional arrangements be related to the Agreement? ecbi european capacity building initiative 3. 4. 7. Biennial assessment and overview of climate finance flows. Fifth review of the financial mechanism. Coherence and coordination: the issue of financing for forests, taking into account different policy approaches. MRV of finance beyond the biennial assessment and overview of climate finance flows. 8. Background: In decision 1/CP.16, Parties decided to establish the SCF to assist the COP in exercising its functions with respect to the FM, including in terms of improving coherence and coordination in the delivery of climate change financing. In decision 7/CP.19, paragraph 11, Parties requested the SCF to consider, in its work on coherence and coordination, inter alia, the issue of financing for forests, taking into account different policy approaches.

3.2. Institutional arrangements, cooperation and coordination Should South-South and triangular cooperation be promoted, and if so how? ecbi european capacity building initiative South-South cooperation a complement to North-South cooperation continues to grow rapidly, more than doubling between 2006 and 2011. While data on concessional South-South flows is incomplete, they are estimated at between $16.1 and $19 billion in 2011, representing more than 10 per cent of global public finance flows. Report of the Intergovernmental Committee of Experts on Sustainable Development Financing 2014] $90,000 Qatar $80,000 Group of 77 and China : GDP/capita $70,000 Kuwait $60,000 Singapore $50,000 UAE $40,000 $30,000 $20,000 China India Saudi Arabia $10,000 Brazil $-

3.2. Institutional arrangements, cooperation and coordination Should South-South and triangular cooperation be promoted, and if so how? ecbi european capacity building initiative

3.2. Institutional arrangements, cooperation and coordination Should South-South and triangular cooperation be promoted, and if so how? ecbi european capacity building initiative Excursion: South-South Solidarity in Climate Finance: A GCF operated Southern Solidarity Fund

The Issue: Sources of Funding for the Green Climate Fund ecbi european capacity building initiative 29. The Fund will receive financial inputs from developed country Parties to the Convention. 30. The Fund may also receive financial inputs from a variety of other sources, public and private, including alternative sources. The question which has proven to be most controversial is whether (certain) developing countries could or even should contribute.

A Southern Solidarity Fund (operated by the GCF) Precedent The UNFCCC Climate Funds operated by the GEF (SSCF and LDCF). ecbi european capacity building initiative The COP decides in Paris that A Southern Solidarity Fund (SSF) is established to receive voluntary contributions from developing country Parties with appropriate national circumstances [ capable developing countries ]. The Green Climate Fund, as operating entity of the financial mechanism, is requested to operate the SSF. Developed country Parties will contribute to the GCF Trust Fund. Capable developing country Parties are encouraged to contribute to the SSF.

Background Material ecbi european capacity building initiative

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