Finance

10/16 Taketo Muroya

Contents

• Cancun Agreement

• Bangkok & Bonn Conference of AWG

• Panama Conference of AWG

• What is expected in Durban?

Cancun Agreement

What was decided about Finance in Cancun Agreement?

• Green Climate Fund ,Transitional Committee and Standing Committee were established.

• By 2012 developed countries should provide $30 billion to developing countries as Fast Start Funding.

• By 2020 developed countries should provide $100 billion per year to developing countries as Long-term Finance.

The Finance System

• But Cancun Agreement says nothing about funding source.

• The economic situations of developed countries are worse than last year. So the discussion of funding source becomes more and more difficult.

What was not decided in Cancun Agreement?

Cancun Agreement

• 95. Takes note of the collective commitment by developed countries to provide new and additional resources, including forestry and investments through international institutions, approaching USD 30 billion for the period 2010–2012, with a balanced allocation between adaptation and mitigation; funding for adaptation will be prioritized for the most vulnerable developing countries, such as the least developed countries, small island developing States and Africa;

Cancun Agreement

• 96. Invites, in order to enhance transparency, developed country Parties to submit to the secretariat for compilation into an information document, by May 2011, 2012 and 2013, information on the resources provided to fulfil the commitment referred to in paragraph 95 above, including ways in which developing country Parties access these resources;

Cancun Agreement

• 98. Recognizes that developed country Parties commit, in the context of meaningful mitigation actions and transparency on implementation, to a goal of mobilizing jointly USD 100 billion per year by 2020 to address the needs of developing countries;

Cancun Agreement

• 99. Agrees that, in accordance with paragraph 1(e) of the Bali Action Plan, funds provided to developing country Parties may come from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources;

Cancun Agreement

• 100. Decides that a significant share of new multilateral funding for adaptation should flow through the Green Climate Fund

Cancun Agreement

• 102. Decides to establish a Green Climate Fund, to be designated as an operating entity of the financial mechanism of the Convention under Article 11, with arrangements to be concluded between the Conference of the Parties and the Green Climate Fund to ensure that it is accountable to and functions under the guidance of the Conference of the Parties, to support projects, programmes, policies and other activities in developing country Parties using thematic funding windows;

Cancun Agreement

• 103. Also decides that the Fund shall be governed by a Board of 24 members, comprising an equal number of members from developing and developed country Parties;

Cancun Agreement

• 109. Also decides that the Green Climate Fund shall be designed by a Transitional Committee in accordance with the terms of reference contained in appendix III to this decision; the Transitional Committee shall have 40 members, with 15 members from developed country Parties and 25 members from developing country Parties as follows;

Cancun Agreement

• 112. Decides to establish a Standing Committee under the Conference of the Parties to assist the Conference of the Parties in exercising its functions with respect to the financial mechanism of the Convention;

Cancun Agreement

• 112. Standing Committee– improving coherence and coordination in the

delivery of climate change financing; – rationalization of the financial mechanism; – mobilization of financial resources, and; – Measurement, reporting and verification of

support provided to developing country Parties;

Bangkok & Bonn Conference

4/3-4/8, 6/6-6/17

What was discussed in two conferences?

• In Bangkok, there was only agenda fight and the outcome was almost nothing.

• In Bonn, Medium-term (=2015) Funding was suggested by EU. It was caused by high possibility that the agreement of new framework will be not decided in Durban.

One of hopeful funding sources

• Taxes on international aviations, ships, currency transactions are desirable.– International aviations and ships now emit

4% of world CO2 emissions.– The principle of common but differentiated

responsibility– Imposing taxes on only developed countries

is very difficult.

• Rebate mechanism is suggested for the solution.– Taxes are imposed on all countries but tax

revenue from them is distributed to developing countries larger than developed countries. This has not been supported yet.

• In third phase of EU-ETS, EU decided to impose tax on all flights whose arrival and departure are in EU.

One of hopeful funding sources

Panama Conference

10/1-10/7

The power of Standing Committee

• (Option 1) The Standing Committee should be a Subsidiary body of the UNFCCC. It should not be a decision making entity but should report directly to the COP in accordance with Article 11.1 of the Convention.

• (Option 2) Decides that the Standing Committee shall report to the Subsidiary Body for Implementation.

The member of Standing Committee

• Option 1 – 2 representatives from each of the 5 UN

regional groups – 1 representative of the small island

developing States – 1 representative of the least-developed

country Parties – 2 representatives from Parties included in

Annex I to the Convention – 2 representatives from Parties not included

in Annex I to the Convention

• Option 2 – Six members from developed country Parties; – Six members from developing country Parties; – Two members from civil society; and – Two members from the private sector;

The member of Standing Committee

• Option 3 – Decides that the Standing Committee

should consist of 24 members, comprising an equal number of members from developing and developed country Parties;

– representation from developing country Parties shall include representatives of relevant United Nations regional groupings and representatives of small island developing States and the least developed countries;

The member of Standing Committee

Sources of Long-term Finance

• (Option 1) Invites parties, international financial institutions and relevant UN agencies to submit their views by the March 31st 2012, on preferred sources of long-term financial resources, including innovative sources; their technical feasibility, applicability and potential incidence on developing country Parties;

• (Option 2) Invites parties, observers, international financial institutions and relevant UN agencies to submit their views by the May 15th 2012, on the financial needs of developing countries, public and private sources, and other sources of long term financial resources, and their technical feasibility, applicability, and adequacy;

Sources of Long-term Finance

Negotiation of Long-term Finance

without finance, there would be no mitigation, adaptation-

nothing for MRV

the issue has been adequately

addressed elsewhere, there was no mandate to discuss it here

Developing Countries

Developed Countries

What is expected in Durban?

11/28-12/9

What is expected in Durban?

• Stable Funding Source– International Taxes– Introduce Rebate Mechanism– The deadline of decision

• Finance System of UNFCCC– The details of GCF & SC– Various opinions should be involved