As part of the Cancun Agreement, reached on December 11 in Cancun, Mexico, at the 16th Conference of the Parties (COP 16), Parties decided to establish a Standing Committee on Finance (SCF) to assist the COP in relation to the financial mechanism of the Convention. The SCF is to assist the COP in exercising its functions with respect to the financial mechanism of the Convention in terms of 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 (MRV) of support provided to developing country Parties.

At COP 17, Parties further defined the roles and functions, as well as the composition and working modalities, of the SCF. The SCFwill report and make recommendations to the COP, for its consideration, at each ordinary session of the COP on all aspects of its work.

The SCF will assist the COP in exercising its functions with respect to the financial mechanism of the Convention through activities, such as:

• Organizing a forum for communication and continued exchange of information among bodies and entities dealing with climate change finance in order to promote linkages and coherence;
• Maintaining linkages with the Subsidiary Body for Implementation (SBI) and thematic bodies of the Convention;
• Providing to the COP draft guidance for the operating entities of the financial mechanism of the Convention, with a view to improving the consistency and practicality of such guidance, taking into account the annual reports of the operating entities as well as submissions from Parties;
• Making recommendations on how to improve the coherence, effectiveness and efficiency of the operating entities of the financial mechanism;
• Providing expert input, including through independent reviews and assessments, into the preparation and conduct of the periodic reviews of the financial mechanism by the COP;
• Preparing a biennial assessment, overview of climate finance flows, to include information on the geographical and thematic balance of such flows, drawing on available sources of information, including national communications and biennial reports of both developed and developing country Parties, information provided in the registry, information provided by Parties on assessments of their needs, reports prepared by the operating entities of the financial mechanism, and information available from other entities providing climate change finance;
• Additionally, the SC will perform any other functions that may be assigned to it by the COP.

The SCF will meet at least twice a year, or more if necessary.  The COP will conduct a review of the functions of the SC in 2015.


Update

At COP 18, Parties welcomed the operationalization of the SCF and the progress achieved by the SC. Furthermore, Parties endorsed the work programme of the SCF. COP 18 adopted the revised composition and working modalities of the SCF and decided that the Chair and Vice-Chair of the SCF shall serve as Co-Chairs of the SCF.

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. The COP requested the SCF, in preparing the first biennial assessment and overview of financial flows, to consider ways of strengthening methodologies for reporting climate finance.

At COP 19, Parties welcomed the continued transparency and openness in the conduct of the work of the SCF and took note of the report on the initial forum of the SCF. The SCF was invited to consider focusing its second forum on mobilizing finance for adaptation from both public and private sectors. The workplan of the SCF for 2014-2015 was also endorsed by Parties.

The SCF was further invited at COP 19 to consider ways to increase its work on the MRV of support beyond the biennial assessment. Parties also called on the SCF to further enhance its linkages with the SBI and the thematic bodies of the Convention. Furthermore, the SCF was requested, in the context of the preparation of its biennial assessment and overview of climate finance flows, to consider ongoing technical work on operational definitions of climate finance, including private finance mobilized by public interventions, to assess how adaptation and mitigation needs can most effectively be met by climate finance.

The SCF was also requested to consider, in its work on coherence and coordination, inter alia, the issue of financing for forests, taking into account different policy approaches.  In this context, it was further requested to focus its soonest possible forum on issues related to finance for forests, including the implementation of the activities referred to in decision 1/CP.16, paragraph 70, inter alia, ways and means to transfer payments for results-based actions as referred to in decision 1/CP.18, paragraph 29; and the provision of financial resources for alternative approaches. The SCF was requested to invite experts on the implementation of the activities referred to in decision 1/CP.16, paragraph 70, to said forum.

It was also decided by COP 19 that two representatives of the SCF will, on an interim basis, represent the SCF in the executive committee of the Warsaw international mechanism for loss and damage.


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