Working group to establish new climate fund

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Date produced: 15/11/2010

1. A party has proposed that the COP should decide to convene a working group outside of the COP to develop the governing instrument and modalities of the Fund (para 3, Option 2), and that the group should negotiate an MOU with the COP. If this approach is followed, how could the COP provide guidance and hold this working group accountable in accordance with Article 11 of the Convention? How would the COP “decide on its policies, programme priorities, and eligibility criteria”? Is an MOU ratifying the working group’s decisions sufficient?

2. How should an MOU or COP decision be drafted to ensure that (1) the fund’s Board is accountable to the COP for implementing the COP’s guidance and “policies, programme priorities and eligibility criteria” but (2) the COP does not have the authority to micro-manage the fund?

1. The establishment of a working group would need to be done through a COP decision and any such working group would need to report back to the COP with recommendations and seek endorsement of the COP for those recommendations. This appears to be what is proposed in Option 2, however, the language regarding negotiating a MOU is open to interpretation at present (i.e. who is negotiating with the COP – is the working group negotiating itself or is it setting terms of reference for that negotiation? –this should be clarified in the next iteration of the draft).

Whilst we appreciate the concern that if a working group is established the COP would not be “deciding on the policies” of the Fund, it is still our view that such an approach must still be endorsed by the COP, and through that endorsement the COP is implicitly deciding on those policies. In addition, the COP can provide clear guidance on the terms of reference for the working group which determines the scope of policies that can be explored.

Without further detail of what is proposed regarding the working group, we are unable to clarify our answer on this further.

The draft MOU prepared by the working group is, to our understanding, supposed to be the MOU between the COP and the operating entity – similar to the MOU between the Adaptation Fund Board and the GEF for the Adaptation Fund.

2. The COP decision should clarify the relationship between the COP and the Fund and/or its Board and should provide the framework in which the Fund operates, including rules, policies and guidelines.

The MOU should provide a clear outline of the services that will be provided by the entity that will implement the COP’s guidance. The language used in Decision 1/CMP.4 for the Adaptation Fund provides one example of the balance between oversight and autonomy. If Parties are concerned that this language still invites micro-management by the COP/ CMP then conferring additional decision making powers and autonomy on the Fund or Fund Board may address that concern.