1. ecbi european capacity building initiative
initiative européenne de renforcement des capacités
How do we assure means of implementation?
Finance in the 2015 Agreement
Naderev Yeb M. Saño
Husband, father, and peace activist
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

3. Finance Linkages GCF MRV Oversight SBI SCF Mobilization US$
SBSTA
Fast-Start Finance
SBI
Thematic Bodies under the Convention
SCF
Mobilization
LTF
Work Prog
High-level Ministerial
GCF
COP-GCF Arr.
US$
100 B/year by 2020
Financial
Mechanism
Private Sector
Developed countries strategies & approaches
GEF
The climate finance architecture has evolved since COP16 in Cancun to support the scaling up of financing for adaptation and mitigation measures. The architecture is made up of 3 pillars that complement each other: oversight (Standing Committee on Finance), mobilization of finance (e.g. long-term finance, fast-start finance) and delivery mechanism (operating entities, bilateral and multilateral agencies). AF
MDBs
Bilateral AAs
Delivery
Innovative sources

4. Oversight
Standing Committee on Finance (SCF) is currently implementing its work programme from which includes the organization of annual forum on climate finance, the MRV of support and biennial assessment of financial flows, drafting of guidance to the operating entities, provision of expert inputs into the review of the financial mechanism, coherence and coordination of financial mechanism and the mobilization of climate finance. In addition, the SCF was tasked along with the GCF Board, to develop the draft COP-GCF arrangements and to provide expert inputs into the extended work programme on long-term finance.
At COP19, the SCF is expected to report on the outcomes of its first forum which focused on the mobilization of climate finance. It is also expected to provide draft guidance to the GEF and GCF, recommend guidelines for the conduct of the 5th review of financial mechanism and present its work plan on MRV of support, including the biennial assessment of flows.

5. Mobilization of climate finance
Extended work programme on long-term finance
The co-chairs of extended long-term finance work programme are convening two meeting of experts (July and Aug) to discuss the twin issues of pathways to the mobilization of scaled-up climate finance of USD 100 billion by 2020 and the enhancement of enabling environments and policy frameworks to mobilize and to effectively deploy climate finance in developing countries. The outcomes of the experts meetings will feed into the wrap-up event (Sept.) where participants are expected to deliberate on key messages that will be delivered to COP19.
Fast-start finance
Developed countries submitted their final reports in May The secretariat has posted the submissions in its documents web site and the information is currently being incorporated into the search engine of the finance portal. It will also produce an information document compiling all the submissions by Parties. There are important lessons and progress made by donor Parties such as the of mobilization of resources, use of channels, tracking the deployment and use of climate finance and allocation of resources which will not be synthesized as the secretariat does not have a mandate to analyze the submissions.
Replenishment of GEF, GCF and special funds of the Convention
The replenishment of the existing and new funds under the Convention may provide a clue on the direction of climate finance mobilization particularly from the public sector. At the last LDCF/SCCF Council Meeting in June, about USD 130 million and USD 70 million were pledged for LDCF and SCCF respectively. The sixth replenishment of the GEF is currently being discussed which is expected to be concluded at the next meeting of the GEF in November. It is expected that GEF 6 will have the same or higher allocation than GEF 5 for climate focal area which was USD 1 billion.
Different sectors have high expectations that the GCF will overshadow existing climate funds in terms of size and scale of operations. However, donors are only expected to provide clarity on their contributions once operational policies of the funds are in place. The GCF Board is progressing well in the development of the business model framework and other operational policies and is moving towards establishing a permanent secretariat. They expect to further elaborate the provisions of the business model framework and the secretariat arrangements at its next meeting in September 2013.
High level ministerial dialogue on climate finance
COP18 agreed to consider progress in the mobilization of long-term finance in Warsaw through an in-session high level ministerial dialogue on efforts being undertaken by developed country Parties to scale-up climate finance after Important inputs into the dialogue include the information by developed country Parties on their strategies and approaches for mobilizing climate finance to USD 100 billion per year by 2020, the report on extended work programme on long-term finance and inputs from Parties and thematic bodies of the Convention. The in-coming Presidency has been conducting consultations with Parties and other stakeholders to solicit inputs on the design of the high level dialogue. It expressed its intention of ensuring inclusiveness and coming-up with concrete outcomes in order to facilitate a successful outcome on climate finance discussions at COP19.

6. Delivery of climate finance
The main channels for the delivery of climate finance are the bilateral and multilateral/regional agencies. The operating entities of the Convention (GEF and GCF) and the Adaptation Fund are the main vehicles for the delivery of financing. It is this context that the COP, with inputs from the SCF, will provide guidance mainly on programme priorities and eligibility criteria to the operating entities. SCF is expected to recommend to COP19 draft initial guidance to the GCF. In developing the draft guidance to the GEF, SCF will take into account the replenishment process to ensure that the priority adaptation and mitigation programmes of the Convention will be funded under GEF6.
Other channels such as the bilateral and other MDBs/RDBs figured prominently in the report on fast-start finance of donor Parties as they served as the main vehicle in delivering financial resources. In this regard, OECD has intensified its technical work in tracking climate finance provided bilaterally through its Rio Markers. Multilateral development banks, particularly the World Bank, have adopted the OECD methodology. OECD is currently working on tracking climate finance of the private sector and in assessing the effectiveness of the deployment of climate finance.
Developing countries expressed concern of the dwindling resources of the Adaptation Fund due to reduction in the value of CERs. The Trustee projected that the annual income of AF from sales of CERs and donor contribution will only amount to about USD 20 million annually from This amount will not be able to support funding decisions of the Board. It is expected that the issue of sustaining the Adaptation Fund will dominate the discussions on the review of Adaptation Fund in Warsaw.

7. Work in earnest
Enabling informed decisions (through SCF)
Implementation of decisions under the finance architecture
Building confidence in the ability of the Convention to deliver support
• Enabling Parties to make informed decisions through technical work and recommendations by the Standing Committee on Finance.
• Implementation phase of the climate finance architecture to ensure effective mobilization, delivery and deployment of climate finance.
• Confidence-building in the ability of the Convention to deliver concrete support to enhanced actions on mitigation and adaptation.
• Expansion and engagement of key players in the mobilization and deployment of climate finance is a work in progress
Broader participation and engagement

8. Components critical to 2015 agreement
Abundant clarity on finance commitments by developed country Parties
Robust MRV system
Clear definition of climate finance
Need new set of financial commitments by developed country Parties (link to LTF pathways and enabling environments conversation)
--Design of an effective, fair, equitable MRV system to build trust and confidence in the system and enhance transparency (we have technical work on this for both donor side and climate finance received which you can draw from; will forward)
--Critical to further strengthen the capacity and effectiveness of the institutions we established in Cancun (such as the GCF, SCF and continuing Convention Funds) before we create new ones.
One of the main conclusions of the 2012 Long-Term Finance Work programme was that lack of clarity on how much climate finance is actually being spent, and where, is an impediment to delivering finance efficiently and in a way which helps build trust.
Strengthen capacity and effectiveness of established institutions (GCF is key)

9. Components critical to 2015 agreement
Mitigation-Adaptation ambition nexus and balance
Loss and damage?
Role of National climate finance institutions/ National Funding Entities
Need to integrate the role of market and non-market mechanisms
Lack of climate finance ‘readiness’ is opportunistically touted by some developed countries as a reason for not scaling up climate finance. To the contrary, it underlines the need for developed countries to more effectively resource capacity building in developing countries so that they can access and utilise climate finance to best effect.
Need to integrate the role of market and non-market mechanisms as part of the future agreement. Obviously a stronger more robust regime should help trigger a global carbon price. Need to facilitate mitigation ambition by putting a high price tag on carbon in all participating countries to in the new agreement. This hopefully will generate new and additional revenue streams. (there are some analytical work on this by Benito and Billy Pizer and on Methane Financing with a small group of countries).
Right price tag on carbon

10. Key Questions – Finance & ADP
How do we mobilize scaled-up finance that matches 2°C imperative? (scale & ambition, GCF operationalization)
What will come from public sector? (pathways and sources)
How do we separate pre-2020 from post-2020?
(Again) How do we ensure Adaptation finance?
What is an effective MRV system for finance?
What constitutes readiness?
How do we distribute finance?