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In accordance with the principle of common but differentiated responsibility and
respective capabilities set out in the Convention, developed country Parties (Annex
II Parties) are to provide financial resources to assist developing country Parties
in implementing the objectives of the UNFCCC. It is important for all governments and
stakeholders to understand and assess the financial needs developing countries have
so that such countries can undertake activities to address climate change.
Governments and all other stakeholders also need to understand the sources of this
financing, in other words, how these financial resources will be mobilized.
Equally significant is the way in which these resources are transferred to and
accessed by developing countries. Developing countries need to know that financial
resources are predictable, sustainable, and that the channels used allow them to
utilize the resources directly without difficulty. For developed countries, it is
important that developing countries are able to demonstrate their ability to
effectively receive and utilize the resources. In addition, there needs to be full
transparency in the way the resources are used for mitigation and adaptation
activities. The effective measurement, reporting and verification of climate finance
is key to building trust between Parties to the Convention, and also for external
actors.
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Standing Committee on Finance
The Standing Committee on Finance was created by Parties to the Convention with the
aim of assisting the COP, with regards to, for example, transparency, efficiency, and
effectiveness in the delivery of climate finance. Furthermore, the Standing Committee
on Finance is designed to improve the linkages and to promote the coordination with
climate finance related actors and initiatives within and outside the Convention.
The committee consists of twenty members, with ten members from developing
countries and ten members from developed countries, who work together to assist the
Conference of the Parties (COP) with regards to the financial mechanism of the
Convention. Currently, the Standing Committee on Finance has been assigned four
specific functions by Parties to allow it to meet its goal. Firstly, the committee has
the function of assisting the COP to improve coherence and coordination in the delivery
of climate change financing. Secondly, the committee has the function of working to
assist the COP in a rationalization of the financial mechanism of the UNFCCC. The third
function of the Standing Committee on Finance is to support the COP in the mobilization
of financial resources for climate financing. Finally, the fourth function is to
support the COP in the measurement, reporting and verification of support provided to
developing country Parties. The Standing Committee on Finance meets at least twice a
year, and has been assigned a series of activities by the Parties in relation to its
four functions.
Long-term Finance
The financial resources required to assist developing countries in undertaking
mitigation and adaptation activities will become more and more significant in the
future as such countries take on more responsibilities to mitigate greenhouse gas
emissions and as the impacts of climate change become more prevalent.
Long-term finance refers to climate finance that is required to allow developing
countries to undertake mitigation and adaptation activities in the long term. It
includes an understanding that the sources of this finance will be public, private
and alternative sources, and that a significant scaling up of resources will be
required to allow for developing countries to be able to effectively undertake these
activities to meet the objectives of the Convention. The funding that will be
provided to developing countries will have to take into account their urgent and
immediate needs, especially of those countries which are particularly vulnerable to
climate change. Additionally, in order to allow developing countries to respond to
climate change, this funding also needs to be predictable and adequate.
Finance Portal
The Finance Portal comprises three modules, each of which includes information made
available by Parties to the Convention and the operating entities of the financial
mechanism of the Convention. The first module is the 'National Communications
Module' and presents information communicated by contributing countries on the
provision of financial resources, in the context of regular reporting to the
Convention. The second module, the 'Fast-start Finance Module', includes
information on resources provided by developed countries in the context of their
commitment to provide approximately USD 30 billion over the period 2010 – 2012.
The third module, the 'Funds Managed by the GEF' is a joint effort between
the secretariat of the UNFCCC and the secretariat of the Global Environment Facility
(GEF), and contains information on climate finance flows of the GEF in its role as
one of the operating entities of the financial mechanism of the Convention.
Additionally to the three modules, information on projects and programmes of the
Adaptation Fund can be found in the Finance Portal. This fund was established under
the Kyoto Protocol of the Convention to finance concrete adaptation projects and
programmes in developing countries that are Parties to the Kyoto Protocol.
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