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for sustained capacity building in support of international climate change negotiations

pour un renforcement durable des capacités en appui aux négociations internationales sur les changements climatiques

The 2015 Paris AgreementIII. Finance

Benito MüllerDirector ecbi, Head of Fellowship Programme

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III. Finance

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?

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cbi3. Biennial assessment and overview of climate finance flows.

4. Fifth review of the financial mechanism.

7. Coherence and coordination: the issue of financing for forests, taking into account different policy approaches.

8. MRV of finance beyond the biennial assessment and overview of climate finance flows.

3.1. Commitments/contributionsHow to ensure transparency of financial commitments/contributions?

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SCF.8 Annotated AgendaBackground: 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

3.1. Commitments/contributionsHow to ensure transparency of financial commitments/contributions?

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.

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3.1. Commitments/contributions

What legal forms of financial INDCs should be made available?

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.”

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3.1. Commitments/contributions

Should there be a collective aim, and if so, how should it be determined?

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Qatar

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OECD

GDP/cap

• 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/contributionsShould there be differentiation , and if yes what type?

Political Realities

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3.1. Commitments/contributionsShould there be differentiation , and if yes what type?

Variant Option::Promotion of South-South cooperation

Options

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cbiThank You!

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3. Biennial assessment and overview of climate finance flows.

4. Fifth review of the financial mechanism.

7. Coherence and coordination: the issue of financing for forests, taking into account different policy approaches.

8. MRV of finance beyond the biennial assessment and overview of climate finance flows.

3.2. Institutional arrangements, cooperation and coordinationHow should existing institutional arrangements be related to the Agreement?

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.

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• “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]

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Saudi ArabiaBrazil

ChinaIndia

Group of 77 and China : GDP/capita

Should South-South and triangular cooperation be promoted, and if so how?

3.2. Institutional arrangements, cooperation and coordination

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Should South-South and triangular cooperation be promoted, and if so how?

3.2. Institutional arrangements, cooperation and coordination

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Excursion:South-South Solidarity in Climate

Finance: A GCF operated Southern Solidarity Fund

3.2. Institutional arrangements, cooperation and coordinationShould South-South and triangular cooperation be promoted, and if so how?

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cbi29. 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.

The Issue: Sources of Funding for the Green Climate Fund

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A Southern Solidarity Fund (operated by the GCF)

Precedent

• The UNFCCC Climate Funds operated by the GEF (SSCF and LDCF).

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.

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Background Material

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cbiEnd of Excursion

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cbiThank You!