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June 2, 2010

UNFCCC Bonn Climate Change Talks

Things are looking up a bit in Bonn.  The AWG/LCA (Working Group on Long Term Cooperative Action – just noticed that I mis-typed it yesterday as LPA) started in on consideration of financing mechanisms which are key to success here.  The Chair seemed to have considerable success in getting the parties together on the financing modalities.  The US started out obstreperously insisting that a new finance board be created as proposed in the Chair’s text, but later seemed to back down in the face of universal disagreement.  We definitely are the black sheep here again, unwilling or unable to make commitments or policy provisions that are helpful. The mood of the delegates definitely has picked up though re the prospects for progress here.

The IUCN delegation head prepared an excellent summary of the session, part of which I attended, so I thought I would copy her excellent summary for you which includes the positions of the principal parties.

IUCN NOTES FROM AWG LCA 10

Discussion on Financial Resources - 2nd June 2010
The Chair requested Parties to consider a set of questions, specifically around: sources of financing; relationship between financial mechanism and proposed thematic institutional arrangements; which entity should disburse funds; matching action with support; registry – stand alone or under financial mechanism and how it would work; coherence; governance; existing institutional arrangements. The Chair’s questions were well received and seemed to help reinvigorate discussions and general atmosphere. Countries and groups largely reiterated their positions with regards to finance, although there were some modest attempts to start identifying synergies between positions.
Key debates:
• Sources of financing: 1.5% GDP (G77) vs. USD 100 billion annually (Annex 1)[of the Copenhagen Accord]
• What is the role of the UN SG Advisory Group on Finance and its outcomes?
• New Finance Board to be established (G77) vs. Establishing Green Climate Fund (Annex 1)[ditto]
• What types of arrangements to be established around thematic issues such as: adaptation, mitigation, REDD+ [United Nations Collaborative Programme on Reducing Emissions from Deforestation and Forest Degradation in Developing Countries +  conservation, sustainable management of forests and enhancement of forest carbon stocks]?
• Functions and inter-relationship between e.g. Finance Board; New Fund; thematic entities; existing institutions
G77[developing countries + China] remained divided on who would disburse new funds and what the functions were of the proposed Finance Board and the proposed thematic bodies. LDCs [Less Developed Countries] supported a Registry under a Finance Mechanism, AOSIS [Association of Small Island States] as stand alone.   Africa Group was the only G77 group to refer to a Green Climate Fund [proposed in the Copenhagen Accord] specifically (which in their position would be under a Finance Board). BASIC countries Brazil, South Africa, India & China] made mainly general statements, although Brazil and South Africa did refer to a “new Fund” (presumably Green Fund) and clarified their view that different boards would be needed for: a Finance Board; a new Fund; thematic funds. Umbrella Group supported a Registry, EU only made reference to a matching platform. US made an earlier statement opposing any new boards or committees, but returned in the afternoon to clarify the Green Fund would have a new board and thereby appeared to aim to “accommodate” some G77 concerns (e.g. this board being under COP, representative etc.).
Several interventions stated there was convergence amidst all Parties over the need for some type of coherence and oversight of all international climate funds. However, there is no agreement on how and by whom this would be delivered.
A break out group to discuss institutional arrangements was supported by Australia, Canada, Guatemala. The Chair said she would consider the establishment of “spin off groups”.
3rd June discussions will continue on shared vision in the morning, in the afternoon on MRV of Annex 1 mitigation. Questions for both sessions will be posted on the web.
ANNEX – country and group specific positions on finance
G77
- Call for 1.5% GDP contributions; non-public funds only as supplemental
- Establish a Finance Board under the COP
- Direct relationship between proposed Finance Board and thematic technical bodies (adaptation, mitigation, technology transfer) – thematic funding windows for each issue
- Finance Board to: carry out matching of funds with proposals; form governing body; decide on allocation and disbursement; provide overall coherence to funds
- Thematic technical bodies: technical recommendations and advice
Some additional views from within G77:
- LDCs: Disbursement of funds by existing funds (e.g. LDCF and SCCF); role of supervision to Finance Board
- LDCs: Registry under the Finance Board
- Africa Group: new Green Fund would be under the Finance Board
- Africa Group, AOSIS and Brazil: need to MRV financial support
- AOSIS: each technical body would have its own body and governance structure
- AOSIS: Registry would be stand alone (would match funding and actions, once actions have been assessed by Finance Board or operating entities)
- COMIFAC [Central Africa Forest Commission]: a specific REDD+ window
- Brazil: NAMAs [Nationally Appropriate Mitigation Actions (for developing country voluntary emission reductions)] must be matched with support and guaranteed funding
- Indonesia: Finance Board mobilizes resources and disburses them; Thematic bodies ensure effective use of funds and achievement of targets
- South Africa: Registry is a mitigation mechanism
- Brazil and South Africa: separate boards for Finance Board, New Fund, Thematic Funds
Umbrella and EU [Umbrella countries are non-EU developed countries]
- Refer to UDS 100 billion a year by 2020 as per CPH Accord [CPH = Copenhagen]
- Support Green Climate Fund referred to in Copenhagen Accord
- Support waiting for the outcomes of the UN Secretary General High-Level Advisory Group on Climate Financing to advise on sources of financing and modalities
- Build on existing institutional arrangements
- Define functions first, then decide on institutional structure 
- Support a voluntary Registry for matching (Umbrella Group)
US:
- Emphasized the role of GEF and the increase in contributions to GEF 5
- Maintained the importance of bilateral flows
- Against establishing new Committees or Boards – this would not support country-driven processes nor coherence
- Does however new Board for Green Fund, with equal representation of non/Annex 1; take funding decisions; under COP
- Spoke of “operating entities” – presumably those referring to e.g. adaptation and REDD
- Green Fund would provide finance for large-scale adaptation and mitigation; GEF provide finance for e.g. capacity building
- Registry to provide access to finance and facilitate matching – in later statement clarified matching could take place by either the Green Fund or operating entities
Norway:
- Specific windows and institutional arrangements for adaptation, REDD and tech transfer
Australia:
- Finance primarily adaptation, mitigation and REDD+; tech transfer and capacity building as cross-cutting
- Refer to a “facilitative platform”
EU:
- Matching via a “platform”
- “other bodies” (presuming this refers to adaptation, REDD+ etc.) would be advisory in nature
- Open to discuss MRV of developed country financing
- Interested in proposals of AOSIS and South Africa regarding functions of a registry
All the best.  Dick