Background and chronology of the Standing Committee on Finance, including updates from each annual Conference of the Parties.
As part of the Cancun Agreement, 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 SCF will 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- Providing to the COP draft guidance for the operating entities of the Financial Mechanism of the Convention, with a view to improving the consistency and practicality of such guidance, taking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 (BA), 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 SCF will perform any other functions that may be assigned to it by the COP.
At COP 21 and in line with decision 1/CP.21, paragraph 63, it was decided that the SCF shall serve the Paris Agreement in line with its functions and responsibilities established under the COP.
The SCF will meet at least twice a year, or more if necessary.
The COP, in line with decision 6/CP.20, conducted a review of the functions of the SCF at COP 23. Further, it decided to agree on the timeline for the second review of the functions of the SCF at its twenty-fifth session (November 2019) at the latest.
Review of the functions of the Standing Committee on Finance
At COP 23, in the context of the review of the functions of the SCF, Parties acknowledged the contributions and positive performance of the SCF in assisting, informing and advancing the work of the COP in exercising its function in relation to the Financial Mechanism.
The COP requested the SCF to continue to provide and enhance the dissemination and utilization of specific and targeted outputs and recommendations in order to effectively advance the work of the COP. The COP also encouraged the SCF to prioritize specific areas of work in the light of its workload in a given year and emphasized the need to continue to enhance all the functions of the SCF, including to take into consideration its mandate to serve the Paris Agreement in line with decision 1/CP.21, paragraph 63.
COP 23 also recognized the need to avoid duplication of climate finance related work across the different subsidiary and constituted bodies, while respecting the mandates and competencies of the different bodies, and requested the SCF to further refine its approach to maintaining linkages with the subsidiary and constituted bodies according to resources available and in the context of its existing working modalities.
The COP also requested the SCF to ensure the value added of its forum when deciding on the topic of each forum, to provide clear recommendations to the COP, as appropriate, regarding follow-up actions on the forum, and to enhance the dissemination, use and ownership of the accumulated knowledge and expertise gathered at the forum, and invited other bodies and external organizations to take into consideration the outputs of the forum. Additionally, it requested the SCF to further strengthen its stakeholder engagement.
Additionally, Parties decided to continue their deliberations on ways to enhance the participation of members of the SCF, acknowledging the need to ensure the full participation and contribution of all constituencies in the meetings of the SCF and the continuity of its work, and requested the SCF to provide options for the enhancement of the participation of members and to report back to COP 24. Parties also recognized that there is a need for the SCF to improve some of its in-session and intersessional working modalities with the aim of further enhancing its efficiency and effectiveness, ensuring the inclusiveness and transparency of its proceedings. Parties also recognized the need to consider the existing workplan of the SCF, and in particular its workload, when providing strategic guidance to the SCF.
COP 23 also invited Parties and relevant stakeholders to utilize the outputs of the SCF, and encouraged Parties and other constituted bodies under the Convention to continue to provide submissions for the preparation of draft decisions on guidance to the operating entities of the Financial Mechanism, based on the reports of the operating entities, in a timely manner to the SCF.
Report of the Standing Committee on Finance
COP 23 endorsed the updated workplan of the SCF for 2018, and invited the SCF to follow up on the recommendations of its 2017 forum in its 2018 workplan, and invited Parties and relevant organizations to incorporate the recommendations into their work as appropriate. It also requested the SCF to enhance its work on the MRV of support beyond the biennial assessment, acknowledging the progress made by the SCF and noting the need to avoid duplication of on-going work under the Subsidiary Body for Scientific and Technological Advice and the Ad Hoc Working Group on the Paris Agreement. Parties furthermore requested the SCF, in fulfilling its function with regard to the MRV of support, and in the context of its extended workplan, to continue its cooperation with relevant stakeholders and experts.
Parties invited the SCF to conclude its deliberations on the topic of its next forum at the latest at its first meeting in 2018, and welcomed the offer by the Republic of Korea to host a 2018 forum of the SCF. They also welcomed the appointment of focal points of the SCF to liaise with the other constituted bodies under the Convention, and requested the SCF to continue to provide information on the appointment in its annual reports to the COP. Furthermore, COP 23 reiterated that the SCF will integrate financing for forest-related considerations into its 2018 workplan, where appropriate, and continue work on this matter in the context of the overall issue of improving coherence and coordination in the delivery of climate change financing, taking into account all relevant decisions on forests.
At COP 22, Parties endorsed the workplan of the SCF for 2017. Furthermore, the COP noted the 2016 biennial assessment and overview of climate finance flows while particularly welcoming the summary and recommendations by the SCF as contained in the annex to decision 8/CP.22.
Additionally, the COP requested the SCF, in fulfilling its function on the MRV of support, and in the context of its existing workplan, to cooperate with relevant stakeholders and experts and to consider ongoing work under the Convention and further action envisaged under the Paris Agreement.
The COP also took note of the summary report on the 2016 forum, including the recommendations and follow-up activities of the SCF and invited the SCF to follow up on the recommendations in its 2017 workplan.
Furthermore, the COP invited the SCF to continue its deliberations on the topic of its 2017 forum at its first meeting in 2017. The COP also reiterated that the SCF will integrate financing for forests-related considerations into its 2017 workplan, where appropriate, and continue work on this matter in the context of the overall issue of improving coherence and coordination in the delivery of climate change financing, taking into account all relevant decisions on forests.
In terms of the sixth review of the Financial Mechanism, the COP requested the SCF to provide, in its report to COP 23, expert input to the sixth review of the Financial Mechanism, with a view to the review being finalized by COP 23.
With regard to the review of the functions of the SCF, the COP adopted the terms of reference for the review of the functions of the SCF contained in the annex to decision 9/CP.22.
COP 21 welcomed the report of the SCF to COP 21 and took note of its recommendations. Additionally, COP 21 endorsed the workplan of the SCF for 2016-2017 and requested the SCF to report to COP 22 on the progress made in the implementation of the workplan. It further requested the SCF to continue to strengthen its engagement with all relevant stakeholders and bodies under the Convention.
With respect to implementing its workplan on the MRV of support beyond the biennial assessment and overview of climate finance flows, the SCF was requested to continue to engage with relevant bodies under the Convention, multilateral and bilateral agencies and international institutions.
COP 21 also welcomed the third forum of the SCF on enhancing the coherence and coordination of forest financing and noted the recommendations of the SCF on its third forum.
COP 21 also decided to initiate the review of the functions of the SCF at COP 22. In this context, the SBI was requested to prepare draft terms of reference for the review at SBI 45 (November 2016) for consideration by COP 22. Relating to this, COP 21 expressed a request to SCF members and an invitation to Parties and observer organizations to submit their views on the terms of reference for the review of the functions of the SCF by 21 September 2016, for compilation by the secretariat into a miscellaneous document.
Through decision 9/CP.21 on methodologies for the reporting of financial information by Parties included in Annex I to the Convention, the COP welcomed the recommendations of the SCF on this matter in its report to COP 21. In this context, the SCF was further requested to take into account the enhanced information by Parties in tables 7, 7a and 7b of the common tabular format and to include it in its BA in line with paragraph 13, of decision 9/CP.21. The COP also requested the SCF to take into account the work on the methodologies for the reporting of financial information from Parties included in Annex I to the Convention in the context of its workplan on MRV of support. Finally, the secretariat was requested to explore ways of creating links to other reporting software and platforms to facilitate the importation and exportation of activity-level data and to inform the SCF to take this into consideration in its workplan.
Also, in line with decision 1/CP.21, paragraph 45, the Adaptation Committee and the Least Developed Countries Expert Group, in collaboration with the SCF and other relevant institutions, were requested to develop methodologies and to make recommendations for consideration and adoption by the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement at its first session on:
a) Taking necessary steps to facilitate the mobilization of support for adaptation in developing countries and
b) Reviewing the adequacy and effectiveness of adaptation and support in the context of the global stocktake referred to in Article 7, paragraph 14(c) of the Agreement.
At COP 20, Parties welcomed the transparency and openness with which the SCF conducts its work. The SCF was also invited to further strengthen its engagement with all relevant stakeholders and bodies of the Convention. With regards to the 2014 BA covering the period 2010–2012, the COP welcomed the progress achieved by the SCF through its successful completion and noted with appreciation the 2014 BA Report. The COP also invited the relevant bodies under the Convention to take note of the summary and recommendations by the SCF on the 2014 BA and requested relevant technical bodies to consider the recommendations contained in the report of the 2014 BA as part of their on-going deliberations related to climate finance.
Additionally, COP 20 requested the SCF, in the context of its on-going work, including the preparation of the BA, to further explore how it can enhance its work on the MRV of support, based on best available information on the mobilization of various resources, including private and alternative resources, through public interventions.
With regards to guidance to the operating entities of the Financial Mechanism, COP 20 endorsed the recommendations on the provision of guidance provided in paragraph 10 of the report of the SCF to COP 20 and requested the SCF to provide advice on the issue of the frequency of guidance to the Financial Mechanism and to report back to the COP 21. Additionally, the COP requested the SCF to consider issues related to possible future institutional linkages and relations between the Adaptation Fund and other institutions under the Convention. The SCF was also requested to provide expert input to the sixth review of the Financial Mechanism in 2017 and was encouraged to build on the same methodology and criteria it used for the expert input to the fifth review of the Financial Mechanism.
Furthermore, the SCF was invited, along with other thematic bodies under the Convention, to consider the long-term finance issues referred to in decision 3/CP.19, paragraph 12 when implementing its 2015-2016 workplans, as an input to the in-session workshops referred to in paragraph 12 of decision 5/CP.20.
COP 20 also approved the initial two-year workplan of the Executive Committee of the Warsaw International Mechanism for Loss and Damage associated with Climate Change Impacts, which includes an invitation to the SCF, in its next BA, to include information on financial instruments that address the risks of loss and damage associated with the adverse effects of climate change, and an invitation to dedicate its 2016 Forum to financial instruments that address the risks of loss and damage associated with the adverse effects of climate change.
In accordance with decision 2/CP.17, annex VI, paragraph 10, COP also decided to conduct the review of the functions of the SCF no later than COP 23.
At COP 19, the SCF was further invited to consider ways to increase its work on the MRV of support beyond the BA. Furthermore, the SCF was requested, in the context of the preparation of its BA, to consider on-going 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.
Additionally, 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.
At COP 18, Parties welcomed the operationalization of the SCF and the progress achieved by the SCF and 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.