Linkages between the technology and financial mechanisms

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Date produced: 09/02/2015

Can you provide a high level overview of, both the thematic and institutional, linkages between the technology and financial mechanisms in the context of COP 20?

Summary:

The Technology Executive Committee (TEC) has recommended a number of areas for collaboration between itself and the operating entities of the Financial Mechanism and Standing Committee on Finance (SCF).[1] These recommendations suggest that the TEC, drawing on its existing analytical work on technology needs and enabling environments, provides input into the work of the SCF, operating entities of the Technology Mechanism, the Global Environment Facility and Green Climate Fund.

There are already some institutional linkages between the Technology Mechanism and the Financial Mechanism. The membership of the Climate Technology Centre and Network (CTCN) advisory board includes membership of both the GCF and the SCF. There are already regular consultations between GEF and CTCN through the UNEP as host of the Climate Technology Centre.

Building on these existing linkages, potential modalities for further collaboration could include meetings between the Chair/Vice-Chairs of the TEC and Advisory board of the CTCN, SCF and representatives of the GEF secretariat. Cross participation of members from each of these bodies in the meetings of the others. Inviting input from other bodies in development of the work-plans of the TEC and responding to COP requests. Generally, sharing knowledge and information.

Advice:

The UN Framework Convention on Climate Change (UNFCCC) requires that developed countries shall provide financial resources to developing countries to support the transfer of technology in order to implement the provisions of the Convention (see Article 4, paragraphs 3 and 5). This provision acknowledges the inherent link between climate finance and the transfer of climate enabled technology.

This advice gives an overview of the thematic and institutional linkages between the two mechanisms developed under the UNFCCC in order address finance and technology issues:

  • The Technology Mechanism created by the Parties in 2010 to facilitate the implementation of enhanced action on the development and transfer of technology to support climate action.
  • The Financial Mechanism established by Article 11 of the Convention and defined as a mechanism for the provision of financial resources for climate action on a grant or concessional basis, including for the transfer of technology.

Overview of the Institutions of the Technology Mechanism

The Technology Mechanism is under the guidance of the COP and consists of two components:

  • The Technology Executive Committee (TEC) which is the policy complement of the mechanism, conducting analysis and giving policy guidance.
  • The Climate Technology Centre and Network (CTCN) which is the implementation component of the mechanism and has the mission to stimulate technology cooperation and assist developing countries at their request.

Overview of the Institutions of the Financial Mechanism

The Financial mechanism operates under the guidance of the Conference of the Parties (COP). The Standing Committee on Finance was created at COP 16 to assist the COP in exercising its functions in relation to Finance. The financial mechanism has two ‘operating entities’:

  • The Global Environment Facility (GEF): The GEF is the operating entity for two other funds, being: (1) The Special Climate Change Fund (SCCF): established under the Convention in 2001 to finance projects relating to technology transfer), and (2) the Least Developed Country Fund (LDCF): established to support a work programme which assists less developed country Parties carry out preparation and implementation of national adaptation programmes of action.
  • The Green Climate Fund (GCF): The GCF is also an operating entity of the financial mechanism of the UNFCCC, in accordance with Article 11 of the Convention.

Existing institutional linkages between the Technology and Financial Mechanisms

The institutions of the Technology and Financial Mechanisms already cooperate through several existing processes:

  • The membership of the CTCN advisory board includes membership of both the GCF and the SCF
  • Regular consultations between GEF and CTCN through the United Nations Environment Programme (UNEP) as the host of the Climate Technology Centre.

Potential Future Institutional linkages

In its recommendations to the COP on linkages between the Technology Mechanism and the Financial Mechanism, the Technology Executive Committees proposed the following inputs into the decision making processes of the technology mechanisms operating entities:

  • Advice on how technology development and transfer can be best supported in developing countries.

TEC Input into the work of the SCF

  • Input into COP guidance for operating entities on technology financing.
  • Input into biennial assessment and overviews of climate finance flows.
  • Input into organising a forum for communication and continued exchange of information among bodies dealing with climate finance.
  • Input into the review of the Financial Mechanism.

TEC Input into the work of the Global Environment Facility

  • Evaluating the Poznan strategic programme on technology transfer.
  • Policy advice on measures to create enabling environments for technology development and transfer and analysis of barriers.
  • Input in to the work of the GEF Scientific and Technical Advisory Panel on innovative policy packages and market initiatives to foster new mitigation actions.

TEC Input into the work of the Green Climate Fund

  • Consultation on areas for joint collaboration between the TEC and the Board of the GCF.

Input by the Operating Entities of the Financial Mechanism into the work of the TEC

  • Input into the work of the TEC through reviewing technology needs assessments, technology action plans and project ideas.

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[1] FCCC/CP/2014/6