Administrative and Financial Matters
Background
Budget matters
In line with Article 7.2(k), COP 1 adopted, by consensus, financial rules for
itself, the secretariat and the SBs (“financial procedures”, contained in Annex I of 
decision 15/CP.1). These rules provide for a two-year financial period, of which the
first year must be an even numbered year. This corresponds to the practice in the United Nations at
large. Every two years, the Executive Secretary proposes a programme budget to the SBI, setting out the
proposed activities and budget of the secretariat for the coming two years. The SBI considers the proposal
and forwards a recommended programme budget to the COP for its approval. The COP adopts the budget by
consensus. The resources of the COP comprise contributions by Parties according to an indicative scale
adopted by the COP by consensus, voluntary contributions by Parties and the uncommitted balance of appropriations
from previous financial periods and miscellaneous income. The indicative scale is based on the United Nations
scale of assessments that is adopted by the General Assembly and follows the principle that all Parties should
contribute to the Convention budget. The indicative scale, as amended at COP 4, mandates that each Party
contribute no less than 0.001 per cent nor more than 25 per cent to the Convention part of the core budget
( decision 17/CP.4).
However, the maximum assessment rate for the apportionment of the expenses of the United Nations has been lowered to 22 per cent. The Convention applies this cap to any contributor whose adjusted assessed contribution might exceed 22 per cent under either the Convention part of the core budget or the Kyoto Protocol part of the core budget. Voluntary contributions are in addition to the obligatory contributions. Contributions are due on 1 January of each calendar year. The Executive Secretary is authorized to make transfers within each of the main appropriation lines of the approved budget. The COP has set an aggregate limit of 15 per cent of total estimated expenditure, including a maximum of minus 25 per cent for each appropriation line. The financial rules require the Executive Secretary to provide interim and final reports on the allocation of funds and their use. The accounts and financial management of funds are also subject to the internal and external audit process of the United Nations. The financial procedures also contain the request to the United Nations Secretary-General to establish two trust funds which bear costs related to the Convention, namely:
- the Trust Fund for the Core Budget of the Convention, which receives contributions from Parties, according to
an indicative scale based on the United Nations scale of assessment; and General Assembly resolution 55/5 of 22
January 2001.
- the Trust Fund for Participation in the Convention process, which receives voluntary contributions and supports
participation of eligible representatives from developing country and EIT Parties in the COP and its subsidiary
bodies. Subsequently, two additional trust funds were established in line with the provision contained in the
financial rules that, subject to the approval of the COP, the United Nations Secretary-General may establish other
trust funds, provided that they are consistent with the objectives of the Convention:
- the Trust Fund for Supplementary Activities, which receives funding donated by Parties in addition to their
indicative contributions to the core budget and generally supports public awareness activities, capacity building,
inter-sessional workshops and activities related to the Kyoto Protocol (Parties often earmark their contributions
for specific projects); and
- the Trust Fund for the Special Annual Contribution of the Government of Germany (the “Bonn Fund”),
which consists of an additional annual contribution from Germany, the host of the secretariat, and primarily
supports conferences and other meetings in Bonn ( decision 16/CP.3).
The CMP, at its first meeting, authorized the Executive Secretary to collect fees from operational entities under
the clean development mechanism (CDM) and users of the international transaction log (ITL) as an additional income
to the Trust Fund for Supplementary Activities. In the biennium 2008 2009, the CDM and ITL are expected to
rely on income outside the core budget as the primary source of funding for their operating and administrative
costs. As joint implementation continues to build capacity for self-financing, it will require partial
funding from fees, the core budget and voluntary contributions until the end of 2009. The types of fees and
the modalities for their calculation and collection vary for each entity in accordance with the decisions of the
COP and the CMP. The CMP, at its third meeting, requested the secretariat to take steps necessary to
establish separate trust funds for the receipt of fees and shares of proceeds for the administration of CDM and the
ITL ( decision 11/CMP.3 (130 kB) ).
The financial rules of the Convention apply to the Kyoto Protocol mutatis mutandis (Article 13.5 of the Kyoto Protocol). In this context, COP 13 and CMP 3 agreed that the programme budget for 2008–2009 should be apportioned at 63.2 per cent for the Convention and at 36.8 per cent for the Kyoto Protocol.
List of COP and CMP decisions
relating to the budget
Agreement concerning the headquarters of the Convention secretariat
On 20 June 1996, the
United Nations, the Federal Government of Germany and the secretariat of the UNFCCC concluded a Headquarters
Agreement for the Convention Secretariat, which was approved by the COP in decision 15/CP.2. The
Headquarters Agreement contains the arrangements for the hosting of the secretariat in Bonn, Germany. The
agreement was amended on 7 December 2005 to reflect the entry into force of the Kyoto Protocol, to include
references to the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol, and to
reflect that the Convention secretariat also serves as the secretariat of the Kyoto Protocol. The amendment
was approved by the COP in decision 8/CP.12.
The text of the English version of the Headquarters Agreement is available on the UNFCCC website here.
COP decisions relating to the Headquarters Agreement:
Decision 15/CP.2
Decision 8/CP.12
Institutional linkage of the Convention secretariat to the United Nations
Climate change has
been high on the international agenda for many years and the United Nations is seen as the principal channel of the
efforts of the international community to address the challenges it poses. The mandate to negotiate a
Framework Convention on Climate Change originated in the United Nations General Assembly (UNGA), with its resolution 45/212 of 21 December 1990 entitled
“Protection of global climate for the present and future generations of mankind”. The resolution
established an Intergovernmental Negotiating Committee. Conference servicing facilities were provided by the
Office of Conference Affairs in New York throughout the negotiations until the adoption of the Convention, at which
point they were transferred to the United Nations Office in Geneva (UNOG). The negotiating process was organized
and conducted under United Nations rules and several national delegations were headed by their Permanent
Representatives to the UN in New York. After negotiating the Convention, Parties agreed to continue the link
between the Convention secretariat and the United Nations. The institutional linkage was initially approved
by the COP in April 1995 ( decision 14/CP.1) and by the UNGA in
December 1995 (resolution 50/115). This
linkage has been successively confirmed and continued by the COP and the UNGA through decisions and resolutions
since then.
It has enabled the secretariat to draw upon the support of the departments, programmes and agencies of the United Nations and to benefit from close working relations within the United Nations community. The secretariat can therefore call on the Department of Economic and Social Affairs, the Office of Legal Affairs and other departments, programmes and agencies on substantive matters. The efforts to protect the global climate are thus conducted under the umbrella of the United Nations. The administrative aspects of the linkage provide for the secretariat to be subject to United Nations regulations and rules as far as personnel and financial matters are concerned. UNOG provides the secretariat with administrative support for treasury and payroll. The Executive Secretary is appointed by the Secretary-General of the United Nations after consultation with the COP through its Bureau. Provision is made in the United Nations regular budget for conference services for meetings of Convention and Protocol bodies in accordance with resolutions adopted by the General Assembly. The actual service is provided by UNOG.
Decisions of the Parties on institutional linkage
Resolutions of the UN General Assembly on institutional linkage:
UN GA resolutions 50/115, 54/222, 56/199 and 62/201