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ADP: Divergent views on enhancing means ofimplementation in new agreement

Bonn, 13 June (Meena Raman)- Diverging viewswere apparent among developing and developedcountries over how to address finance,technology transfer and capacity building in the2015 agreement.

An interesting exchange of views took place at aroundtable under workstream 1 (on the 2015agreement) to consider issues on finance,technology transfer and capacity building of the

Ad Hoc Working Group on the DurbanPlatform for Enhanced Actions (ADP) which

was held on Friday, 8 June.

Developing countries stressed the importance ofthe new agreement in enhancing thecommitments of developed countries for the

provision of the means of implementation,building on the existing institutions andarrangements currently under the Convention,such as the Green Climate Fund (GCF) and the

Technology Mechanism. Many developingcountries stressed that while these institutionsand arrangements were in place, delivery offinance, technology transfer and capacitybuilding were yet to be seen. They wanted theelements of finance, technology transfer andcapacity building to be an integral part of the

2015 agreement. They also wanted clearcommitments for scaled-up, new, additional,predictable, and adequate climate financings bothbefore and after 2020.

Concerns were also expressed, especially fromIndia, about developed countries emphasisingthe role of the private sector and carbon marketsin generating financial resources, which they

viewed as a shifting of developed countrycommitments to the private sector.

On the other hand, developed countries led bythe United States and Japan viewed the means ofimplementation as part of a package of

decisions in the 2015 outcome, implying that itwould not be integral to the 2015 agreement.Developed countries stressed that publicresources should leverage private investments indeveloping countries and emphasised the

importance of the carbon markets. Many ofthem said that financial resources should only beprovided to developing countries in need andthat those with capabilities must alsocontribute.

Developing countries wanted the barriers totechnology transfer removed especially as regardsintellectual property rights (IPRs), but developedcountries such as Japan said that this was not acritical issue.

The United States was concerned that in anagreement which is applicable to all, it was hardto see how developing countries wereconditioning their commitments on theprovision of the means of implementation, asthis would mean some countries makingconditional commitments while others hadunconditional commitments.

Australia said Parties should not be distracted byupfront pledges and roadmaps for financing but

for partnerships for green growth.The European Union said what the newagreement needs to do is to mobilise change. Ittalked about trillions of dollars of investmentsgoing into countries, and that systems should bein place that drives investment choices bothfrom the public and private sectors. On who isto provide the finance, it said there is need for abroader range of Parties who are contributing

well beyond 2020 with changing capacities andeconomic circumstances.

Co-chair of the ADP, Harald Dovland (Norway)chaired the session.


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TWN Bonn Update No. 20 13 June 2013

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Egypt speaking for the Like-MindedDeveloping Countries in Climate Change(LMDC) said that with half of the worldspopulation, of which almost half live belowUS$2 a day, the developing countries of theLMDC continue to face severe developmentchallenges. Yet, they were doing more than their

fair share, in their own national contexts and ascontribution to the global effort, to undertakenational adaptation and mitigation actions. Morecould be done had the Convention been fullyimplemented.

The Convention, said Egypt, is not simply aboutmitigation and transparency of mitigation action.It is more importantly, also about enhancingaction on adaptation and on the enhancedprovision of finance, including for technology

development and transfer; enhanced technologyaccess, transfer, and development, includingthrough removal of barriers; and enhancedcapacity building from developed countries todeveloping countries. These must be integralelements for both the pre-2020 and post-2020discussions. These provide the enablingconditions that support enhanced actions bydeveloping countries under the Convention.

It said the ADP outcome in 2015 must,therefore, incorporate and integrate provisions

related to finance, technology development andtransfer and capacity-building. The outcomeshould trigger increased financial flows,technology transfer, and capacity buildingactivities to developing countries, in accordance

with the Convention. A robust and transparentsystem for MRV (measurement, reporting and

verification) of such support should beintegrated into the ADP outcome. There is noneed to reinvent the wheel. What needs to bedone here is to address the implementation gap

in the differentiated responsibilities of countriesunder the Convention.

Egypt said that the provision of finance bydeveloped countries is the cornerstone forenhanced action. New words must not beinvented by Parties when referring to theprovision of financing. The words that we havealways used and the various COP (Conference ofParties) decisions describe the climate finance tobe provided under the Convention as scaled-up,

new and additional, adequate and predictable.We should not substitute other words to dilutethe commitment of developed countries. Manyestimates of the financing needs of developingcountries to address climate change from the

UNFCCC secretariat, UN agencies, internationalorganizations such as the World Bank, and

various research institutions, suggest that thescale of climate financing needed by developingcountries run from multiple hundreds of billionsto more than a trillion dollars per year up to2030.

Yet in the period 2005 to 2010, Egypt said,developed countries reported in their 5th nationalcommunications as having provided as climatefinancing only a total of US$64 billion throughbilateral channels as development assistance(ODA) and through multilateral channels such asthe Global Environment Facility and the WorldBanks Climate Investment Funds. Developedcountries pledged in Cancun to jointly mobilizeup to US$100 billion per year by 2020 from

various sources but have not provided any clearpathway on how such pledge would be achieved,aside from the fast start finance of US$30 billionbetween 2010 to 2012. So both the ambition

with respect to the scale of financing and theactual delivery of what financing support is madeavailable continue to be major implementationgaps. In order to raise global mitigation ambitionboth in the pre-2020 and post-2020 timeframes,there should be a specific commitment fromdeveloped countries to provide scaled-up, new,

additional, predictable, and adequate climatefinancings both before and after 2020, throughthe GCF.

On technology, the implementation gaps in thisarea lie not only with respect to the scale of thetechnology transfer activities but also in thequality of the technology transfer activities. Fromtheir 5th national communications, technologytransfer activities in the period 2005-2010 withdeveloping countries tended to focus on how touse the technology that may be acquired from

developed countries either by commercial sale orpublicly-funded transfer. On the other hand,many of their efforts with other developedcountries tend to focus on the early stages of thetechnology cycle, in the form of collaborativeresearch, development and demonstration inrelation to new technologies. This implies thatcontrary to the Convention, the technologytransfer activities of developed countries areintended to produce customers and end-users oftheir technologies rather than to assist

developing countries develop and produce theirown endogenous technologies.

Parties need to address issues that hampertechnology development and transfer and


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address barriers. Flexibilities in the IPR regimemust be made. Patents, which are granted on lowscientific thresholds, inhibit competition andtechnology transfer and deployment. We need tolook at concessional technology acquisition andsee how best the GCF can be used towards thisend. On capacity building, the outcome must

create, for both the pre- and post-2020 period, arobust and effective operational mechanism forcapacity building financed by developedcountries.

India said the central problem or barrier inenhancing efforts on climate change is the gap inimplementation of commitments related toprovision of financial resources andtechnologies.

It noted with deep concern lack of commitment

to any roadmap to ratchet up the provision ofsuch finance either to achieve the goal ofproviding US$ 100 billion per year by 2020 andbeyond and strongly advocated a MRV offinancial commitments and technologicalsupport to enhance transparency. In thepresentation of reports by different Funds andcommittees on Finance (under the UNFCCC), itobserved that these aspects were hardly touchedupon. At the same time, the sources andchannels of providing long-term finance by

developed countries have to be clearly identified.It is necessary to expeditiously provide initialcapital to the GCF for its operations.

India said a pertinent issue is that of finding anappropriate balance between the public andprivate funds needed at the required scale. Anemphasis on greater role of the private sectorand carbon markets in generating the requiredresources is not appropriate. This amounts todilution of public obligation by shifting the

responsibility to the private sector. Further, thesize of carbon markets is too small consideringthe magnitude of resources required for meetingclimate change. Carbon markets remain introuble with the prices in carbon markets fallingin, primarily due to the low ambition levels ofthe developed countries. In effect we areensuring its failure this way. Private finance ishighly volatile in terms of flows and can playonly a supplementary role. The MDBs(multilateral development banks) themselves are

deeply over-stretched in terms of their financing.Moreover, the resources they provide are in theform of loans, which are not the kind of flowsthat are needed and certainly will not counttowards financing for mitigation or adaptation.

Another point of concern, said India, is variousinnovative sources of finance being deliberatedupon that may have incidence on developingcountries. Hence the process here must ensurethat incidence (of innovative sources offinancing) should not fall on developingcountries, which is in violation of the principle of

CBDR (common but differentiatedresponsibilities).

Similarly, in the case of technology transfer,India said barriers to access affordableenvironmentally sound technologies such asIPRs must be addressed under the ADP. Manyof the technologies that can help developingcountries to move towards a lower emissionspath are out of their reach due to IPRs and theircosts. For example, the lack of alternative

technology prevents many of us from phasingout HFCs. Lack of finance under the GCF isanother factor in this regard. India proposed thatto facilitate concessional technology, a windowmay be provided under the GCF. India stronglysupports a facilitative IPRs regime that balancesrewards for the innovators with the commongood of humankind and thereby enablesdeveloping countries to take early and effectivemitigation and adaptation actions at the nationallevel.

On capacity building, India said this is anothercritical enabler for enhanced action bydeveloping countries. Referring to presentationson energy initiatives at the earlier roundtables(the day before), it said many options exist andare being tried in different parts of the world.However, their diffusion and adoption wouldrequire substantial efforts to train manpower andfacilitate understanding and domestic capacitiesin developing countries.

Despite the fact that there has hardly been anymovement so far as the provision of finance,technology and capacity building are concerned,India stressed that developing countries arealready making significant contribution towardsglobal efforts on combating climate change at asubstantial cost to their economies. Some studieshave even pointed out that the aggregate impactof actions taken by developing countries exceedsthe aggregate impact of actions taken bydeveloped countries. These developing country

actions can be enhanced further with greaterprovision of finance, technology transfer, andcapacity building.


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While institutions and mechanisms have beencreated in pursuance of the Bali Action Plan,these institutions and mechanisms such as theGCF and the Technology Mechanism must bestrengthened and must work on a clear time lineto enable and incentivise enhanced actions, saidIndia.

China said that the discussions must be put intocontext. The mandates from Durban and Dohafor the 2015 agreement are to discuss enhancedaction for implementation of the Conventioncommitments. This is the subject matter that hasto be addressed. Discussions in any formatshould reflect the main elements that require tobe implemented. The issue of capacity buildingmust be discussed, associated with technologytransfer and finance support. This also requires

the discussion on associated issues oftransparency and support.

The term actions refers to the implementationof commitments under the Convention and thestarting point for the 2015 agreement is theConvention provisions, said China. It needs tobuild on the agreed outcome from the Bali

Action Plan, which was to enable the full,effective and sustained implementation of theConvention. The provision of the USD 100billion by 2020 should be the starting point on

how to scale up implementation, which is part ofenhancing actions.

As regards technology transfer, the TechnologyExecutive Committee and the Climate

Technology Centre and Network (CTCN) havenot addressed the barriers for such transferespecially that of IPR and the financial supportto make it happen. Under the ADP, there is needto consider how we establish mechanisms fortechnology transfer, building on the Convention

and institutional arrangements from the Baliprocess.

On finance, it supported Indias call for a specialGCF window on technology, and also wanted a

window for capacity building. To ensuretransparency in the support of finance,technology transfer and capacity building, it saidclear MRV provisions were needed.

The Philippines said that what developingcountries were getting thus far was a longer listof responsibilities without associated financing.Referring to the Cancun goal of mobilising theUSD 100 billion by 2020, the goal has not beenreached. There has been no predictability ofsupport and unclear accessibility because of

conditionality and no adequacy. It stressedArticle 4.1 of the Convention on thecommitments of Parties has no reference torespective capabilities, referring to developedcountries linking the provision of finance to therespective capabilities of all countries. It saidfurther that much current financing is in the

form of loans. Financing should be ex ante andnot ex post and for all developing counties.

On proposals by developed countries for newmarket mechanisms, it reminded Parties thatmechanisms were used for developing countriesto assist developed countries to meet theircommitments for emissions reductions (referringto the Clean Development Mechanism under theKyoto Protocol). It said that developingcountries were getting more responsibilities and

were being asked to do more via new marketmechanisms to meet the commitments ofdeveloped countries.

Nepal for the Least Developed Countries(LDCs) said the provision of sufficient finance,technology transfer and capacity building underthe new agreement is important. It also stressedthe need to address loss and damage, as well asgender mainstreaming. It said low carbondevelopment can attract more ambition on theprovision of the means of implementation. The

GCF should be sufficiently resourced andbecome operational, for both adaptation andmitigation and must allow for direct access.Capacity building needs to be a core element ofthe new agreement, and should be countrydriven and focus on institutional development. Italso stressed on barrier free technology transfer.Many developing countries have preparedtechnology needs assessments and were lookingdesperately for financial support, Nepal added.

Bangladesh stressed the importance of new andinnovative sources financing and the need fordirect access.

Nauru for the Alliance of Small Island States(AOASIS) called for a dramatic scale up of newand additional finance, which is adequate andpredictable. The sources should be identified andthe GCF should be operationalized as soon aspossible. It wanted enhanced action onadaptation. Given the economic and scale ofimpacts of climate change, there is need to

upscale the provision of the means ofimplementation.

Colombia called for bold actions outside of thebox. It called for commitments from all Parties


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to be implemented according to CBDRRC(CBDR and respective capabilities). It called fora dynamic approach to raise ambition and for theprovision of means of implementation. It saidany review process for the post-2020 agreementmust include a strong component on means ofimplementation and be adjusted with evolving

needs. It said for the generation of newresources, markets can play an important role.

Norway stressed payment for verified emissionsreductions. Support must always result in action.

The existing frameworks and institutions thathave been created need to be strengthened. Itsaid that Parties need to find ways to get publicfunds to get private funds. It was keen to avoidan empty discussion on numbers whenimplementation is unclear and stressed the

importance of support for the most vulnerable.The Republic of Korea called for an MRVsystem for recipient countries. It said publicfinance is insufficient and private investmentsshould be mobilised with subsidies.

Australia said it is time for green economicgrowth. There is a growing capacity to act inemerging economies and also there is need tosupport those most in need. On the provision ofmeans of implementation, it is in the context of

meaningful mitigation action. All Parties have amutual responsibility and public finance mustleverage much larger finance. There isopportunity to engage the private sector and toinvest in green growth, and carbon markets havean important role. Parties should not bedistracted by upfront pledges and roadmaps forfinancing but for partnerships for green growth.

The European Union said what the newagreement needs to do is to mobilise change. It

was not talking about a few billion dollars here

and there but about trillions of investmentsgoing into countries. Systems should be in placethat drives investment choices both from thepublic and private sectors. There will be a lot ofinvestments from the private sector with publicpolicy frameworks, with the right signals for thecarbon price. There is need to build on the tools

we have and to use public resources and financialinstitutions to leverage resources. There is need

to work with those most in need. Enablingenvironments are a crucial part with robust MRVsystems. On who is to provide the finance, it saidthere is need for a broader range of Parties whoare contributing well beyond 2020 with changingcapacities and economic circumstances. There isalso needs to drive innovation.

Japan while agreeing that the means ofimplementation are important, questioned howthis is placed in the new agreement. It was of the

view that it should build on discussions based onexisting arrangements and results should beincluded in the 2015 package. On finance, itsaid public finance should be used to leverageprivate finance. Most of the finance is fromprivate investments and depends on the businessenvironment and progress of markets in

developing countries. It did not believe that IPRsis a critical issue.

The United States said significant climatefinance will continue to flow beyond 2020. Wehave agreed to ramp up USD 100 billion up to2020. Fulfilling ambitious commitments willneed significant resources and those with lowercapability will require assistance compared tothose who have capabilities. It said that whetherfinance is part of the overall package and how itis reflected in the new agreement needs to be

considered. Pushing capital to developingcountries requires the enabling environment.

There needs to be a robust mechanism fortransparency of support.

How the post 2020 mitigation commitments are,is relevant to how support is viewed, it added. It

was concerned that mitigation is expressed inconditional terms depending on what others doand that if it is conditioned on the provision ofsupport, there would be uncertainty which

reduce the willingness all to act. In an agreementwhich is applicable to all, it is hard to see how itwill work if some have conditional commitmentswhile others are unconditional.

Switzerland stressed the importance offinancing low carbon and climate resilientdevelopment. For transformational changes, itcalled for a blend of private and public money.

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