Excom inputs into the guidance to the operating entities of the Financial Mechanism and into the Global Stocktake

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Date produced: 20/08/2020

1. How can and/or should the Executive Committee of the Warsaw International Mechanism for Loss and Damage (the Excom) work with the Standing Committee on Finance (SCF) to ensure loss and damage is adequately addressed in the SCF’s draft guidance to the operating entities of the Financial Mechanism of the Convention provided to the COP?

2. What shape and content could and/or should the Excom’s contribution to the Global Stocktake with regard to loss and damage take ?

Summary:

 There is a clear mandate under decision 2/CMA.2 for the Excom to work with the SCF to ensure that loss and damage is addressed in the SCF’s draft guidance to the operating entities of the Financial Mechanism of the Convention. The SCF will consider any input provided by the Excom at its 22nd meeting, which is scheduled for either September or November 2020 (date TBC).

The Excom’s liaison to the SCF should engage with the SCF prior to the SCF’s 22nd meeting to determine what inputs would be most helpful. Depending on any feedback received from the SCF, the Excom may wish to make a written submission in advance of the SCF’s 22nd meeting that focuses on inputs “relevant to reducing the risks of loss and damage and, where necessary, addressing loss and damage”, and may draw on the Excom’s 2019 technical paper on sources of finance for loss and damage (found here).

We also note that the Excom has a mandate to establish an expert group for the purpose of, among other matters, developing a focused plan of action on further engaging and strengthening the Excom’s dialogue with the SCF. It does not appear that this expert group is operational, however when operational it should play a key role in engaging with and preparing input for the SCF.

Advice:

1. Addressing loss and damage in the SCF’s draft guidance to the operating entities of the Financial Mechanism of the Convention provided to the COP

There is a clear mandate for the Excom to work with the SCF to ensure that loss and damage is addressed in the SCF’s draft guidance to the operating entities of the Financial Mechanism of the Convention.

Under paragraph 37 of decision 2/CMA.2 (Warsaw International Mechanism for Loss and Damage associated with Climate Change Impacts and its 2019 review), the Conference of the Parties serving as the Meeting of the Parties to the Paris Agreement (CMA) requested that the Excom “further engage and strengthen its dialogue with the Standing Committee on Finance by providing input in line with decision 2/CP.19, paragraph 5(c)(ii), to the Standing Committee on Finance when, in accordance with its mandate, it provides information, recommendations and draft guidance relating to the operating entities of the financial mechanisms under the Convention and the Paris Agreement, as appropriate“. This is reciprocated under decisions 11/CP.25 and 5/CMA.2 (Matters relating to the Standing Committee on Finance), under which the CMA and COP look forward to the inputs that may be provided by the Excom for the SCF’s consideration when preparing elements of its draft guidance for the operating entities of the financial mechanism of the Convention.

These decisions refer to decision 2/CP.19 paragraph 5(c)(ii), which was the decision that established the Warsaw International Mechanism for Loss and Damage. Under paragraph 5(c)(ii) of this decision, it was decided that the Excom was to promote the implementation of approaches to address loss and damage by, inter alia, enhancing action and support to address loss and damage, including by providing information and recommendations for consideration by the COP when providing guidance relevant to loss and damage, including to the operating entities of the financial mechanism of the Convention.

In general terms, the Excom engages with the SCF through exchanges of information, provision of inputs to each other’s work electronically, submissions and via joint consideration of specific matters.[1] In September 2016, the Excom contributed to the SCF’s annual forum, the topic of which was financial instruments that address the risks of loss and damage, and discussed broadly four types of financial approaches, instruments and tools: (1) risk transfer schemes; (2) catastrophe and resilience bonds; (3) social protection schemes; and (4) contingency finance. The Excom and SCF also have designated members who serve as liaisons to facilitate interaction between the two committees.

More specifically, the SCF is due to consider inputs provided by the Excom in preparing the elements of draft guidance for the operating entities of the financial mechanism at its 22nd meeting, which was due to occur in March 2020, but has been postponed due to COVID-19. The UNFCCC website indicates that the meeting has been postponed to either 28-30 September 2020 or 4-6 November 2020 (dates still to be confirmed). We recommend that the Excom’s liaison to the SCF engage with the SCF, prior to the SCF’s 22nd meeting, in order to understand what inputs would be most helpful in preparing the SCF’s draft guidance to the operating entities of the financial mechanism. The Excom may then wish to make a written submission to the SCF in advance of its 22nd meeting.

We note that, under paragraphs 40-41 of decision 2/CMA.2, the CMA requested that the Excom establish an expert group which is to develop a focused plan of action on, among other matters, the activities referred to in paragraph 37 of Decision 2/CMA.2 above. The group is to play an advisory role in further engagement with the SCF. It is apparent that the establishment of this expert group was considered at the 11th meeting of the Excom; however, it does not appear that the expert group is as yet operational.[2] When operational, we consider that this expert group should play a key role alongside the Excom’s liaison to the SCF in providing input to the SCF.

In terms of the content of the Excom’s submission, a useful basis is the Excom’s 2019 technical paper on sources of finance for loss and damage (found here). In accordance with decision 2/CP.19 paragraph 5(c)(ii), such inputs should be “relevant to reducing the risks of loss and damage and, where necessary, addressing loss and damage”.

It is worth noting the that the Excom’s 2019 technical paper states that “initial technical work led to the recognition that (1) challenges relating to loss and damage require a broad range of responses at different levels, including information and knowledge building, the development of adequate policy and regulatory environments and practical actions; (2) these responses extend to several domains, including disaster risk management, risk transfer and pooling, contingency and humanitarian measures, adaptation to climate change and climate-resilient development; and (3) financing is needed for all these responses.”(para 9). In addition to looking at needs and sources of finance, it may also be worth considering submissions that seek to facilitate better tracking and reporting of finance for loss and damage.

2. Excom’s contribution to the Global Stocktake with regard to loss and damage take (topic for discussion on the Excom agenda for this year)

Again, the Excom has a clear mandate to contribute to the Global Stocktake with regard to loss and damage.

Under decision 19/CMA.1 (the decision in the Paris Agreement Rulebook relating to Article 14 of the Paris Agreement), it was decided that the Global Stocktake will consist of three stages: information collection and preparation; technical assessment; and consideration of outputs. Under paragraph 24 of the same decision, the CMA invited the Excom, among other relevant constituted bodies and forums serving the Paris Agreement and the Convention, to prepare a synthesis report for the purposes of the technical assessment. This report should be completed and submitted at least three months before the commencement of the technical assessment (paragraph 19).

The synthesis report prepared by the Excom should address matters identified in paragraph 36 of decision 19/CMA.1 that are within its area of expertise, namely “efforts to enhance understanding, action and support, on a cooperative and facilitative basis, related to averting, minimizing and addressing loss and damage associated with the adverse effects of climate change“. The synthesis report should consider information at a collective level.

The Excom’s synthesis report should be guided by the purpose of the Global Stocktake, which pursuant to Article 14.1 of the Paris Agreement is to assess the collective progress towards achieving the purpose of the Paris Agreement and its long-term goals (including those under Article 2.1 of the Paris Agreement). We also note that the Global Stocktake will generally be structured around the three thematic areas of mitigation, adaptation and means of implementation and support, and the synthesis report should be informed by this broader context.

We note that the Adaptation Committee began discussing the synthesis report it has been invited to prepare at its last meeting in March. Here is a link to a background paper prepared on the matter in advance of the meeting: https://unfccc.int/sites/default/files/resource/ac17_6f_synthesis_GST.pdf.

With regards to timing, the Excom agreed to discuss its role in and contribution to the Global Stocktake at its future meetings, starting with its first meeting of 2020. The Excom’s 11th meeting took place in March 2020, however the agenda item relating to the Global Stocktake was not discussed and instead forwarded to the Excom’s 12th meeting.[3] Members where nevertheless encouraged to continue exchanging views, via eDelphi, email or other appropriate means, in preparation for Excom 12.

The CMA will undertake the first Global Stocktake in 2023 and every five years thereafter, unless otherwise decided by the CMA. According to decision 19/CMA.1, the information collection and preparation component of the Global Stocktake will commence one session before the start of the technical assessment, which will take place during the two (or depending on the timing of the publication of the Intergovernmental Panel on Climate Change reports, three) successive sessions of the subsidiary bodies preceding the CMA 6 (November 2023), during which the consideration of outputs will take place.

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[1] https://unfccc.int/sites/default/files/resource/Excom%2011_Background_document_5c%28ii%29.pdf

[2] https://unfccc.int/sites/default/files/resource/Excom_11_Provisional_agenda_and_annotations.pdf

[3] https://unfccc.int/sites/default/files/resource/Excom11_summary_next_steps.pdf