Filling the gaps & building up: mobilising climate finance in the shade of the 2015

agreement

Climate Finance Break out group Climate Change Expert Group

OECD\IEA September 16-17, 2014

Paris France

Mariama Williams williams@southcentre.int

Presentation Overview

I. Context & Background • The Convention • COP decisions • Opportunities, Challenges and constraints with current flow of Climate

finance • The Durban Platform • Implications of the framing questions

II. The ADP & the two phases to the 2015 agreement: • Pre 2020: financing needs, options & opportunities • Post 2020: financing needs, options & opportunities

III. Filling the gaps & building Up • The GCF

I. Context & Background 1. The Convention (articles 4 &11) 2. COP decisions: 3/CP.19, 4/CP.18, 1/CP.17 (126-132) and 1/CP.16 (2, 4 and 98-100) 3. Opportunities, Challenges and constraints with current flow of Climate finance 4. Ad Hoc Working Group on the Durban Platform for Enhanced Action: The Durban Platform (ADP) 5. ‘Goal for climate finance that reflects the 2 °C goal’ 6. ‘With USD 100 billion as a floor and leading to enhanced specific commitments by developed countries’ 7. Commensurate with the financing needs of NAI Parties and increasing trend over time 8. Implications of framing questions

II.The two Phases of the 2015 Agreement

The Pre 2020: financing needs, options & opportunities Financing needs: capacity building—including readiness, monitoring systems, policies and measures for adaptation, mitigation, LAD all existing implementation gaps are to be bridged—including financing and all the other legal commitments of AI parties

The Post 2020: financing needs, options & opportunities Financing needs: capacity building—ongoing readiness, NAMAs, NAPAs, NAPs Outcome of NDCs etc. Enhanced actions. Necessitate ‘clarity on the level of financial support that will be provided by DCP to Dvg Ps to allow for enhanced implementation

ADP on Finance thus far • Co-chairs informal note July 2014 • Convergences

• Existing Financial Mechanism will play key role in the new agreement

• Guidance for future operation post 2020 • Underlying issues:

DCs to report on strategies and approaches for mobilising scaled up finance (1/COP 18 para 67) & info on quantitative and qualitative pathways (3/CP19 para 10)

III. Finance & the 2015 Outcome: Possibilites, challenges & constraints • Financing is fundamental to the success of the 2015

outcome • if there is no attempt to enhance action on finance,

there will be little ambition left in the post-2020 period

• in order to enhancing the implementation of Article 4.3, 4.4, 4.5 and 4.7 of the Convention. The

• finance chapter of the 2015 outcome should have the same legal bindingness or legal nature as the other chapters including mitigation.

• The fulcrum of the balance in the Convention lies in Art. 4.7

Post 2015- Possibilities • Reinforcing: thematic & geographic balance • Clarifying Climate finance Definition • Improving MRV & Transparency of support • Recognition of autonomous climate finance by Dvgs

(for adaptation and LAD) • Financing for LAD • Process for improving the efficiency and management

of CF • Greater synergy and complementarity between

instiutional arrangements

Post 2015 &Finance- Challenges • “Flexibility” • Enabling environments • Private sector (MRV, equity, obligations) • Financing for Tech transfer • Other:

Keys to mobilising climate finance I What is to be financed? • The transformation of productive capacity, infrastructure for

essential services, production/export, technology • Adaptation & building resilience. [Capacity building and

Knowledge development] • LAD What are the range of likely financing options & tools and the opportunities, challenges and constraints around each of these for different groups of developing countries? The desirability of public versus private finance or combinations therefo? & the issue of scaling up

Keys to mobilising Finance & 2015 • Quantified commitments for the post-2020 period • Assessed contributions based on an agreed

percentage formula for the calculation of the contributions of Parties included in Annex I to the Convention (Annex I Parties) and differentiating developing country contributions Nature of the commitments (LB or PC) Who to provide: AI • Source: Primarily public (private complementary and

can be leveraged with some public finance & enabling environment in Developed countries.

Enabling Environments 0 • Cooperation, coordination & communication • EEs as means versus EEs as ends • Enabling environments at multiple levels:

• EE in Developed countries for faciliating mobilisation of finance & TT—changing policy frameworks and regulations

• EE in Developing countries (coordination & communication, institutional processess)

-Programme & project levels (accessing to finance & bundling of projects & role of intermediaries)

Enabling Environments 1 Cooperation, Coordination & communication Means versus Ends • Emphasis is on cooperation on enhancing enabling

environments and support for readiness and on NEEDS for support to developing countries… not enabling environment in and of itself

• Emphasis is on facilitating the mobilisation and the effective deployment of climate finance

• Continuity of mobilisation of public finance at increasing levels from FSF

Enabling Environments 3 Push & Pull factors for mobilising Climate Finance Push factors: Target(s) for goal of $100 b by 2020 and beyond 2020 Time frame sources & delivery mechanisms (rationalization and streamlining, increasing efficiency and effectiveness resources for GCF Pull factors Rationalization of in-country process for accessing and using CF: including Fiduciary standards, environmental safeguards, gender equity issues Readiness issues: principles of Country ownership and country drivenness linked to national climate change strategy and sustainable development objective

• Challenges & Constraints: policy conditionalities around policy and regulation;

• Sovereignty and right to sustainable development and ownership of own development process

• Direct access modalities. • Fragmentation of delivery channels. • Limited focus of readiness (accreditation process) • Need for increase level of predictability and

sustainable sources of financing • More space and opportunity for country lead

implementation strategies.

Finance & the 2015 Outcome 0 • Financing is fundamental to the success of the 2015 outcome • if there is no attempt to enhance action on finance, there will be little

ambition left in the post-2020 period • in order to enhancing the implementation of Article 4.3, 4.4, 4.5 and 4.7 of

the Convention. The • finance chapter of the 2015 outcome should have the same legal bindedness

or legal nature as the other chapters including mitigation. • The fulcrum of the balance in the Convention lies in Art. 4.7 • Importance of balancing needs with result based management approach • Linking vision for a paradigm shift, specific actions and financial instruments • Establish more rigorours basis for mobilising finance post 2020:

guiding principles enhanced institutional arrangements goal& time line for pre and post 2020 finance Greater transparency definition of climate finance

Filling the Gap and Building up Why the GCF? • Maintaining national ownership • Aligning fund support with national strategies, policies

and programmes • Significant share of the $100 billion should be through

the GCF • Significant share on new multilateral funding for

adaptation should be through GCF