The obligation to provide adaptation finance for developing country Parties is directed at developed country Parties. However, there are some incidental obligations for developing country Parties, with exclusion of SIDS and LDCs. To have a better understanding of adaptation finance for developing country Parties, it is necessary to study what the PA says on adaptation.
The PA in its recognition of global goal on adaptation, provides in Article 7 that “enhancing adaptive capacity, strengthening resilience and reducing vulnerability to climate change, with a view to contributing to sustainable development and ensuring an adequate adaptation response in the context of the temperature goal referred to in Article 2”.107 The Article recognizes adaptation as a global challenge, by “taking into account the urgent and immediate needs of those developing country Parties that are particularly vulnerable to the adverse effects of climate change”.108 In terms of adaptation and mitigation link under Article 7, “Parties recognize that the current need for adaptation is significant, while increased mitigation efforts can reduce adaptation needs, because increased adaptation needs can attract more adaptation funds”.109 Under the provisions of Article 7 of the PA, Parties recognize the need to provide assistance on adaptation efforts by developed Parties to developing Parties, with particular attention to the most vulnerable.110 Regarding enhanced support, the Article further states that “continuous and enhanced international support shall be provided to developing country Parties, to strengthen cooperation, engage in
106Sharma et al. ECBI 2019 p. 8.
107Paris Agreement 2015, Art. 7 para. 1.
108Ibid, para. 2.
109Ibid, para. 4.
110Ibid, para. 6.
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national planning processes and implementation of actions and to submit and update adaptation communications”.111
Going by the provision in Article 7, of the PA, it is clear that there is a link between adaptation needed and temperature rise. The level of temperature will determine how much adaptive measures will be needed. The PA specifically provides for adaptation, the purpose is to provide adequate adaptation for developing countries to protect lives and ecosystems. Parties understand and agrees that reduction in emission can reduce the degree of adaptation measure needed because more adaptation needs require more adaptation funds. The provision contained in para. 6 requires that support will be available for developing countries to prepare and implement their NAPs, including reporting on adaptation communication.
Here the thesis examines obligation to provide adaptation finance for developing country Parties, and finds that Article 9 of the PA, requires that developed country Parties shall be responsible for the contribution of “financial resources required to assist developing country Parties concerning mitigation and adaptation in continuation of their existing obligations under the Convention”.112 In addition, the PA also encourages other Parties to provide financial assistance, this is a voluntary requirement for those other Parties.113 The PA in Article 9 further provides that, “as part of a global effort, developed country Parties should continue to take the lead in mobilizing climate finance from a wide variety of sources, instruments and channels, noting the significant role of public funds, through a variety of actions, including supporting country-driven strategies, and taking into account the needs and priorities of developing country Parties. Such mobilization of climate finance should represent a progression beyond previous efforts”.114
Under Article 9 of the PA, it states that the “provisions of scaled-up financial resources should aim to achieve a balance between adaptation and mitigation. While it is necessary to consider the need for public and grant based resources for adaptation”.115 In addition to the provisions of Article 9,
111Ibid, para. 13.
112PA Art. 9 para. 1.
113Ibid, para. 2.
114Ibid, para. 3.
115Ibid, para. 4.
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“developed country Parties shall biennially communicate indicative quantitative and qualitative information related to paras. 1 and 3 of this Article, as applicable, including, as available, projected levels of public financial resources to be provided to developing country Parties. Other Parties providing resources are encouraged to communicate biennially such information on a voluntary basis”.116 While the global stocktake referred to in Article 14 shall take note of the information provided by developed country Parties.117
Developed country Parties are obligated in Article 9, to “provide transparent and consistent information on support for developing country Parties provided and mobilized through public interventions biennially in accordance with the modalities, procedures and guidelines to be adopted by the Conference of the Parties serving as the meeting of the Parties to this Agreement (CMA), at its first session, as stipulated in Article 13, para. 13. Other Parties are encouraged to do so”.118 As regards the financial mechanism to serve the PA, the Article provides that “the Financial Mechanism of the Convention, including its operating entities, shall serve as the financial mechanism of this Agreement”.119 The Article concludes by stating that “the institutions serving this Agreement, including the operating entities of the Financial Mechanism of the Convention, shall aim to ensure efficient access to financial resources through simplified approval procedures and enhanced readiness support for developing country Parties, in particular for the LDCs and SIDS”.120
A study of the provision reveals that Article 9, para. 1 of the PA creates a legal duty for developed country Parties, i.e. financial obligation. This is different from the existing ones under Article 4, paras. 3 and 4 of the Convention which merely put financial obligations on developed country Parties and other developed Parties included in Annex II. Under the PA, the obligation to provide finance falls on all developed country Parties. This is more so because the PA is largely built on differentiation, which is not a static categorization of countries unlike the Convention. The PA
116Ibid, para. 5.
117Ibid, para. 6.
118Ibid, para. 7.
119Ibid, para. 8.
120Ibid, para. 9.
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uses developed and developing countries as opposed to the Convention and KP’s Annex I, Annex II and non-Annex I Parties.
The legal implication of Article 9, para. 1, is that it imposes financial obligation on those developed country Parties that are not in Annex II to the Convention, this is a major departure from the UNFCCC and KP. While the obligation continues for Annex II Parties in the Convention with the use of the phrase “in continuation of their existing obligations under the Convention”. The provision in Article 9, para. 1 reflects a mandatory performance rather than a voluntary one with the use of “shall”. The legal implication is that developed country Parties are not at liberty to decide whether they will provide adaptation finance or not. Furthermore, the obligation under para. 1 is required to be met by collective action with the phrase “developed country Parties”. So therefore, the obligation to provide finance could be considered a collective duty for developed countries.
The obligation to provide adaptation finance under Article 9, para. 2 extends to Parties other than developed country Parties, this is another departure from the UNFCCC and KP. However, they are not legally required to provide adaptation finance, and they are only “encouraged” to do so.
Article 9, para. 3 expects that developed country Parties will “continue”, i.e. from the UNFCCC and KP commitment, to champion the mobilization of climate finance. Under Article 11, para. 3 of the Convention, it requires the determination of the amount of funding needed and available for the implementation of the Convention, but unfortunately no such efforts has been made largely due to the fact that developed countries do not want developing nations to take advantage of the situation. Hence in Katowice, Article 9, para. 3, of the PA, which calls for long term quantified goal for climate finance, faced challenges. The issue was left unresolved to be attended to later.121 The provision in Article 9, para. 4 envisages the sources of climate finance to include other sources besides public funds, although, the provision specifically mentions that public and grant based resources should cater for adaptation. Article 9, para. 5 deals exclusively with ex ante information, i.e. the provision does not cater for ex post information, while Article 9, para. 7 deals with ex post information. The wordings in Article 9, para. 5, i.e. “indicative” and “to be provided”, shows that developed country Parties are expected to give an idea of the resources they intend to provide in
121Sharma et al. ECBI 2019 p. 10.
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future, which is clearly different from information on resources provided. On the other hand, the reporting obligation imposed on developed country Parties under Article 9, para. 7 deals with ex post information, i.e. “provided and mobilized” resources. This provision concerns information on resources that had been provided. The legal implication of the provision contained in Article 9, para. 8, is that it permits the GEF, GCF to operate as the financial mechanism of the PA. While para. 9 mandates those financial mechanism to provide swift access to resources for developing country Parties, particularly LDCs and SIDS.
The COP decision in terms of finance as provided in Article 9, of the PA, decides that “in the implementation of the Agreement, financial resources provided to developing country Parties should enhance the implementation of their policies, strategies, regulations and action plans and their climate change actions with respect to both mitigation and adaptation to contribute to the achievement of the purpose of the Agreement as defined in its Article 2”.122 With regards to progression beyond previous efforts, the COP decides that “in accordance with Article 9, para. 3, of the PA, developed country Parties intend to continue their existing collective mobilization goal through 2025 in the context of meaningful mitigation actions and transparency on implementation;
prior to 2025 the CMA shall set a new collective quantified goal from a floor of USD 100 billion per year, taking into account the needs and priorities of developing countries”.123 The details of information to be given by Parties that provide financial support was debated, and the COP decides
“to initiate, at its twenty-second session, a process to identify the information to be provided by Parties, in accordance with Article 9, para. 5, of the PA with a view to providing a recommendation for consideration and adoption by the CMA at its first session”.124
In terms of modalities for the accounting of financial resources provided and mobilized through public sources, the COP “requests the SBSTA to develop modalities in accordance with Article 9, para. 7, of the PA for consideration by the COP at its twenty-fourth session, with a view to making a recommendation for consideration and adoption by the CMA at its first session”.125 In relation
122Decision 1/CP.21 para. 52.
123Ibid, para. 53.
124Ibid, para. 55.
125Ibid, para. 57.
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to the financial mechanisms to serve the PA, the COP decides that “the GCF and the GEF, are the entities entrusted with the operation of the Financial Mechanism of the Convention, as well as the LDCF and the SCCF, administered by the GEF, shall serve the Agreement”.126 While in respect of whether the AF will serve the PA, the COP recognizes that “the AF may serve the PA, subject to relevant decisions by the CMP and CMA”.127 Thereafter, the COP implores “the institutions serving the PA to enhance the coordination and delivery of resources to support country-driven strategies through simplified and efficient application and approval procedures, and through continued readiness support to developing country Parties, including the LDCs and SIDS”.128 In view of the high level ministerial dialogue on climate finance held in accordance with decision 3/CP.19, para. 13, the COP “notes that the dialogue highlighted progress in and remaining barriers to translating climate finance needs into action and enhancing developing countries’ access to climate finance”.129 The COP accepts “the 2018 Biennial Assessment and Overview of Climate Finance Flows of the SCF, in particular its key findings and recommendations highlighting the increase in climate finance flows from developed country Parties to developing country Parties”.130 The COP further takes “notes that the dialogue underscored the urgent need to scale up the mobilization of climate finance, including through greater engagement of the private sector, to increase finance for adaptation, and to align financial flows with the objectives of the PA and the United Nations Sustainable Development Goals”.131 In addition, the COP “notes that the dialogue highlighted the recently initiated replenishment process of the GCF as a clear opportunity for enhancing ambition, as well as the importance of transparency and predictability of climate finance, clear eligibility criteria for funding and strong national policy and regulatory frameworks to enhance the mobilization of and access to climate finance”.132
126Ibid, para. 58.
127Ibid, para. 59.
128Ibid, para. 64.
129Decision 1/CP.24, para. 7.
130Ibid, para. 9.
131Ibid, para. 10.
132Ibid, para. 11.
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As regards increase in climate finance, the COP “urges developed country Parties to continue to scale up mobilized climate finance, recalling the commitment of developed country Parties in the context of meaningful mitigation actions and transparency on implementation, to a goal of mobilizing jointly USD 100 billion per year by 2020 to address the needs of developing countries, in accordance with decision 1/CP.16”.133 During COP 24, with regards to long term climate finance, the COP recalls commitment of developed county Parties in accordance with decision 1/CP 16 and urges them to scale up mobilized climate finance of USD 100 billion per year by 2020 to address needs of developing country Parties.134 Directed at adaptation finance, the COP further urges “developed country Parties to continue their efforts to channel a substantial share of public climate funds to adaptation activities and to strive to achieve a greater balance between finance for mitigation and for adaptation, recognizing the importance of adaptation finance and the need for public and grant-based resources for adaptation”.135
The COP presents the draft decisions on matters relating to the PAWP for consideration and adoption by the CMA at the third part of its first session. The CMA in 2018 adopts guidance to the operating entities of the financial mechanism (GCF, GEF, LDCF and SCCF). The CMA agrees with Decision 1/CP.21, para. 58, and “confirms that the SCF shall serve the PA”,136 in addition the LDCF and SCCF shall also serve the PA.137 The CMA “requests the SCF to prepare draft guidance for the entities entrusted with the operation of the financial mechanism, and on LDCF and the SCCF, for consideration and adoption by the CMA at its second session (December 2019)”.138 The CMA further “confirms that it shall provide guidance to the entities entrusted with the operation of the financial mechanism of the Convention on the policies, programme priorities and eligibility criteria related to the PA for transmission by the COP”.139
In terms of Decision 1/CP.21, para. 59, matters relating to the AF, the CMA decides that “the AF shall serve the PA under the guidance of, and be accountable to, the CMA with respect to all
133Ibid, para. 20.
134Decision 3/CP. 24 para. 3.
135Ibid, para. 4.
136Decision 3/CMA.1 para. 6.
137Ibid, para. 7.
138Ibid, para. 8.
139Ibid, para. 9.
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matters relating to the PA, effective 1 January 2019, subject to the decision on this matter made by the CMP”.140 The decision of the CMA recommends that “the CMP decide that the AF will continue to be financed by the activities under Articles 6, 12 and 17 of the KP”.141 The CMA further recommends “to the CMP that the AF shall exclusively serve the PA once the share of proceeds under Article 6, para. 4, of the PA becomes available”.142 The CMA invites the CMP “to ensure that developing country Parties and developed country Parties that are Parties to the PA are eligible for membership on the AFB”.143
The units acquired from the market mechanism under Article 6, of the PA, will not count as climate finance.144 The AF will serve the PA from January 2019, also the share of proceeds from Article 6 will support the AF when it becomes available, while share of proceeds from CDM of the KP will continue to support the AF.145 All Parties to the PA will be eligible for membership of AFB, while SBI50 in June 2019, will consider this position and make recommendations to CMP15 in November 2019. The AFB is then tasked to make rule of procedure of the Board in view of the recent decision to be forwarded to CMP15 and subsequently to CMA2 in November 2019 for consideration.146
In terms of the methodologies to facilitate the mobilization of support for adaptation in developing countries, the CMA decides and “invites Parties to further enhance their enabling environments, policy frameworks, institutions and national public financial management systems with a view to improving access to international public support, as appropriate, and to enhancing the involvement of the private sector”.147 The CMA further “urges developed country Parties and invites other Parties that provide resources on a voluntary basis, United Nations entities and other relevant organizations, as well as bilateral and multilateral agencies, to assist the least developed country Parties and other developing country Parties, drawing on the work of the AC, the LEG and other
140Decision 13/CMA.1 para. 1.
141Ibid, para. 2.
142Ibid, para. 3.
143Ibid, para. 4.
144Sharma et al. ECBI 2019 p. 9.
145Ibid.
146Ibid, p. 10.
147Decision 11/CMA.1 para. 22.
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relevant bodies, as appropriate, in building or strengthening their enabling environments, policy frameworks, institutions and national public financial management systems so as to mobilize support for adaptation, in particular capacity-building, including as part of the process to formulate and implement national adaptation plans”.148
In reference to the type of information to be provided by Parties in accordance with Article 9, para.
5, of the PA and decision 1/CP 21 para. 55, the CMA “reiterates that developed country Parties shall biennially communicate indicative quantitative and qualitative information related to Article 9, paras. 1 and 3, of the PA, as applicable, including, as available, projected levels of public financial resources to be provided to developing country Parties, and that other Parties providing resources are encouraged to communicate biennially such information on a voluntary basis”.149 The CMA decides that the following information shall be provided by Parties in accordance with Article 9, para. 5, of the PA, “enhanced information to increase clarity on the projected levels of public financial resources to be provided to developing countries, as available; indicative quantitative and qualitative information on programmes, including projected levels, channels and instruments, as available; information on policies and priorities, including regions and geography, recipient countries, beneficiaries, targeted groups, sectors and gender responsiveness; information on purposes and types of support: mitigation, adaptation, crosscutting activities, technology transfer and capacity-building; information on the factors that providers of climate finance look for in evaluating proposals, in order to help to inform developing countries; an indication of new and additional resources to be provided, and how it determines such resources as being new and additional; information on national circumstances and limitations relevant to the provision of ex ante information; information on relevant methodologies and assumptions used to project levels of climate finance; information on challenges and barriers encountered in the past, lessons learned and measures taken to overcome them”.150
148Ibid, para. 23.
149Decision 12/CMA.1 para. 2.
150Ibid, Annex.
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In furtherance, the CMA also decides that “information on how Parties are aiming to ensure a balance between adaptation and mitigation, taking into account the country-driven strategies and the needs and priorities of developing country Parties, especially those that are particularly vulnerable to the adverse effects of climate change and have significant capacity constraints, such as the LDCs and SIDS, considering the need for public and grant-based resources for adaptation;
information on action and plans to mobilize additional climate finance as part of the global effort to mobilize climate finance from a wide variety of sources, including on the relationship between the public interventions to be used and the private finance mobilized; information on how financial support effectively addresses the needs and priorities of developing country Parties and supports country-driven strategies; information on how support provided and mobilized is targeted at helping developing countries in their efforts to meet the long-term goals of the PA, including by assisting them in efforts to make finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development; information on efforts to integrate climate change considerations, including resilience, into their development support; information on how support to be provided to developing country Parties enhances their capacities”.151
On the issue of setting a new collective quantified goal on finance in accordance with decision 1/CP.21, para. 53, the CMA decides “to initiate at its third session (November 2020), in accordance with Article 9, para. 3, of the PA, deliberations on setting a new collective quantified goal from a floor of USD 100 billion per year in the context of meaningful mitigation actions and transparency of implementation and taking into account the needs and priorities of developing countries”.152 In addition the CMA “agrees to consider, in its deliberations referred to in para. 1 above, the aim to strengthen the global response to the threat of climate change in the context of sustainable development and efforts to eradicate poverty, including by making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development”.153
Having discussed the obligations of developed country Parties with regards to the provision of adaptation finance in the PA, which answers the first question, and identified aspects where the
151Ibid.
152Decision 14/CMA.1 para. 1.
153Ibid, para. 2.