Introduction

The contribution of countries to climate change and their capacity to prevent and cope with its consequences vary enormously. The Convention and the Protocol therefore foresee financial assistance from Parties with more resources to those less endowed and more vulnerable. Developed country Parties (Annex II Parties) shall provide financial resources to assist developing country Parties implement the Convention. To facilitate this, the Convention established a financial mechanism to provide funds to developing country Parties.

The Parties to the Convention assigned operation of the financial mechanism to the Global Environment Facility (GEF) on an on-going basis, subject to review every four years. The financial mechanism is accountable to the COP, which decides on its climate change policies, programme priorities and eligibility criteria for funding, based on advice from the SBI.

The Kyoto Protocol also recognizes, under its Article 11, the need for the financial mechanism to fund activities by developing country Parties.

In addition to providing guidance to the GEF, Parties have established three special funds: the Special Climate Change Fund (SCCF) and Least Developed Countries Fund (LDCF), under the Convention; and the Adaptation Fund (AF), under the Kyoto Protocol.

Funding to climate change actvities is also available through bilateral, regional and multilateral channels.

More information on funding

The COP 13, by its decision 6/CP.13 requested the secretariat to compile the view submitted by Parties and prepare a synthesis report for consideration by the SBI 28.  The SBI 28 took note of the synthesis report (FCCC/SBI/2008/INF.4) on submissions from Parties on the review of the financial mechanism. The SBI also requested the secretariat to provide, upon request, information to NAI Parties on the assessment of financing needs to implement mitigation and adaptation measures and decided to continue its consideration of issues under this agenda item at its twenty-ninth session (December 2008) on the basis of the draft text contained in the annex to these conclusions (FCCC/SBI/2008/L.11) and other documents submitted by Parties, with a view to recommending a draft decision for adoption by the COP 14 (December 2008).

At the sessions of SBI 27 and COP 13 /CMP 3 (December 2007) in Bali, Indonesia, Parties made progress and took a number of decisions relating to financial support under the Convention and the Kyoto Protocol, including decisions on additional guidance to the Financial Mechanism and on Review of the financial mechanism.  

The CMP 3 decided that the operating entity of the Adaptation Fund  shall be the Adaptation Fund Board.  Decision 1/CMP.3))

More on Special Climate Change Fund  (Decision  1/CP.12 )

More on  Least Developed Countries Fund (LDCF), ( Decision 3/CP.11)

At the next sessions of SBI / COP / CMP (December 2008), Parties shall consider the following major item:

• Financial mechanism (Convention):
  • Fourth review of the financial mechanism;
  • Report of the GEF to the COP and guidance to the GEF;
  • Least Developed Countries Fund;
• Financial mechanism (Kyoto Protocol)
  • Report of the Adaptation Fund Board.