1. The COP, as the supreme body of the Convention, shall exercise its authority over and provide guidance to the financial mechanism, and shall decide on its operation and on the policies, programme priorities and eligibility criteria for financing purposes.
2. The COP shall appoint a board,1 which shall function under the authority and guidance of and be accountable to the COP, to manage the financial mechanism and the related facilitative mechanism, funds and bodies, which shall have an equitable and balanced representation of all Parties within a transparent system of governance, to address all aspects of the means of implementation for developing countries, for both adaptation and mitigation.
3. The level of the new funding can be set at 0.5 per cent to 1per cent of the GNP of Annex I Parties. Quantified commitments by developed country Parties to adequate and predictable funding for mitigation and adaptation.
4. The role and remit of the COP in the modalities and procedures of such a mechanism must be clear, including the setting of operational guidelines, the election of executive board members, approval of final budgets, and audit process or verification.
5. The Board shall be assisted by a dedicated secretariat of professional staff contracted by the Board.
6. The COP and the Board shall establish, manage and supervise current funds, specialized funds and funding windows to fund projects, programmes and actions aimed at mitigation, adaptation and technology transfer that are under its governance, and a mechanism to link various funds. These funds shall include:
(a) An Adaptation Fund:
(b) A Mitigation Fund:
(c) A Multilateral Climate Technology Fund2:
7. A Multilateral climate technology fund shall be established to support the implementation of the technology mechanism for the provision of technology-related financial resources on a grant or concessional basis to enable the wide diffusion of environmentally sound technologies in developing countries.
8. The fund shall meet the full costs of activities such as technology R&D and demonstration of technology, capacity-building, technology needs assessments, know-how and information, and construction of policy instruments.
Alternative 1:
The fund shall be used to implement the development, deployment, diffusion and transfer of technologies by meeting the agreed full incremental costs of, inter alia, licensing IPRs, and the deployment and diffusion of technologies in developing countries.
Alternative 2:
The fund shall be used as a catalyst to provide stakeholders with incentives to implement the development, deployment, diffusion and transfer of technologies by meeting the full incremental costs of, inter alia, the deployment and diffusion of technologies in developing countries.
(d) A Capacity-building Fund;
(e) A Technology Risk Facility to assist technologies from demonstration to commercial maturity;
(f) A Venture Capital Fund for start-up finance;
(g) A Technology Grant programme for the research and development of new technologies;
(h) A Climate Insurance Fund;
(i) Other funds as required.
9. Modalities for determining the role of existing funds and entities for the operation of the mechanism shall be developed.
10. Funds will be administered by a Trustee or Trustees that have been selected through a process of open competitive bidding among reputable pre-qualified institutions.
11. Each of the funds and funding windows shall be:
(a) Advised by an expert group or committee, which could also be supported by a technical, scientific advisory and monitoring and evaluation panel or panels addressing specific issues identified by the Board;
(b) Assisted by a independent specialized thematic assessment unit or panels, comprising experts and specialists, to carry out the relevant assessments for the disbursement of funds to the designated national entities under their respective specialized funding windows. These thematic assessment units shall be under the authority of the Executive Board and, together with the professional secretariat of the Executive Board, shall constitute the operating entity of the Financial Mechanism.
12. To ensure transparent and efficient governance, other possible components of the structure shall include representatives of all participant countries, contributors and beneficiaries, grouped in a balanced manner, a consultative/advisory group all relevant stakeholders and an independent assessment panel.
13. Developing country Parties [shall][should] establish and/or strengthen national coordinating bodies to address all aspects of the means of implementation, including strengthening the institutional capacity of national focal points and all stakeholders, including sub national and local governments.
14. The coordinating bodies shall be the national focal points for supporting the implementation of climate change projects and programmes that have received technology, finance and capacity-building assistance from developed country Parties in line with those Parties commitments under Article 4 of the Convention.
15. In achieving its objectives, national coordinating body shall:
(a) Ensure national ownership of and commitment to NAMAs that are to be registered internationally;
(b) Ensure proper assessment of the financial, technological and capacity needs of NAMAs and national adaptation measures;
(c) Mobilize, coordinate with and involve existing in-country mechanisms;
(d) Facilitate the development of national expertise on adaptation and mitigation;
(e) Coordinate climate change funding, technology transfer and capacity-building requirements, including by identifying and prioritizing needs and guiding the preparation of proposals;
(f) Harness synergy across thematic activities and facilitate exchange of experience and good practice;
(g) Identify stakeholders for direct access to financial assistance.
16. The national coordinating bodies shall act as the direct channel of access between developing country Parties and the board, shall approve funding for projects, programmes and actions, subject to the guidelines and procedures established by the specialized thematic assessment units approved by the Executive Board and the COP.
17. The administrative costs of national coordinating bodies established for this purpose shall be covered by international financial resources made available specifically for this purpose. A separate pool of funding to finance national coordinating bodies through an item in the secretariats budget shall beestablished.
18. The designated national funding entities could also accept contributions directly, as per guidelines agreed by the COP, from and facilitate linkages with other private or national, regional, subregional, international bodies and/or stakeholders that may seek to implement actions relating to mitigation, adaptation and technology transfer and related activities directly.
19. A transparent, efficient and competitive procurement regime with conditionalities limited to those warranted by prudent fiduciary norms and the MRV regime foreseen under decision 1/CP. 13 should characterize funding from the Financial Mechanism established under the Convention.
20. Manage a certification and registry system for receiving, delivery of and deploying financial resources to enable developing country Parties to count financial contributions and technology support from developed country Parties towards compliance of their commitments under Article 4.3, 4.4, 4.5, 4.8 and 4.9 of the Convention and under paragraph 1(b) (ii) of decision 1/CP. 133. Financial resources will be made available to support an effective system to measure, report and verify the support provided by developed countries.
21. The Executive Board shall report annually to the COP on matters related to a proposed fund.
22. The Executive Board of the Financial Mechanism, with the approval of the COP, shall institute suitable external independent oversight as well as internal monitoring and evaluation of the management and operation of the Financial Mechanism established under the Convention.
23. The resources of the Financial Mechanism established under the Convention shall be used to meet the costs associated with the functioning of the Executive Board, the secretariat and the thematic assessment units, subject to the approval of the COP.
24. The Executive Board, established to govern and manage the financial mechanism shall determine the allocations for mitigation and adaptation, to be periodically reviewed, taking into account the historical imbalances in and the urgency of funding for adaptation.
