Can you put together an outline of what a decision on the Santiago Network of Loss and Damage (SNLD) at COP26 might look like?

Summary:

A CMA decision on the SNLD at COP26 should provide the terms of reference for the SNLD and the key functions and modalities required to deliver on the SNLD’s mandate. We consider that the terms of reference for the SNLD, to be included in a decision made at COP26, should cover the following key elements:

• Mission/Substance of the SNLD;
• Function;
• Architecture/Form;
• Financial arrangements;
• Roles and responsibilities;
• Governance;
• Organisational structure;
• Reporting and review;
• Term of agreement to host the SNLD; and
• Financial arrangements.

Advice:

We consider that parallels can be drawn between the likely future operation of the SNLD and the Climate Technology Centre and Network (CTCN). In particular, we consider that modelling the SNLD on the CTCN would be beneficial, as the CTCN is an already functioning network with a structure that would also serve the functions of the SNLD and allow for its effective and efficient operationalization. On this basis, we have referred to the decisions made to operationalize the CTCN to identify key features of the decision that should be made at COP26 to operationalize the SNLD.[1]

We consider that a decision of the CMA operationalizing the SNLD should clearly outline and adopt terms of reference for the SNLD. It is important that any decision made by the CMA should draw from previous decisions relating to the SNLD and should consider the wider framework of the Warsaw International Mechanism (WIM).[2] We also note that in relation to the CTCN, subsequent decisions were made by the COP, which dealt with work to be carried out once the CTCN was operational.[3] We consider that a decision such as this is beyond what is required to be included in a decision at COP26 to operationalize the SNLD. However, decisions such as this may be required on an ongoing basis to further guide the ongoing operation of the SNLD.

CMA Decision

We consider that a decision of the CMA operationalizing the SNLD should contain the following key elements:

1. Endorsement of the SNLD’s Terms of Reference, which include the following:

• Mission/Substance of the SNLD;
• Function;
• Architecture/Form;
• Roles and responsibilities;
• Governance;
• Organisational structure;
• Reporting and review;
• Term of agreement to host the SNLD; and

2. Financial arrangements;

3. Work to be carried out by the SNLD once established, for example the elaboration of its modalities and procedures based on the agreed Terms of Reference; and

4. A selection process for the host of the SNLD.

We have outlined below the information that should be included for each element.

1. Terms of Reference

The CMA decision should adopt the Terms of Reference on the SNLD, which may incorporate the content set out below.

Mission/Substance of the SNLD

The mission statement/substance of the SNLD should further elaborate on the purpose of the SNLD and also provide for moving the SNLD forward. The purpose of the SNLD is stated in decision 2/CMA.2 to be:

“averting, minimizing and addressing loss and damage associated with the adverse effects of climate change, to catalyse the technical assistance of relevant organizations, bodies, networks and experts, for the implementation of relevant approaches at the local, national and regional level, in developing countries that are particularly vulnerable to the adverse effects of climate change“.

Additionally, the mission/substance of the SNLD should incorporate the overall purpose of the Warsaw International Mechanism (WIM). The purpose of the WIM is outlined in decision 2/COP.19, this being to promote “the implementation of approaches to address loss and damage associated with the adverse effects of climate change …in a comprehensive, integrated and coherent manner”.[4]

Functions

The functions of SNLD should be stated as furthering its purpose as set out in in decision 2/CMA.2, paragraph 43.[5] Further, the functions of the SNLD may also draw from the functions which have been designated to the WIM, in decision 2/CP.19, paragraph 5.[6]

Architecture/Form

Similar to the CTCN, the SNLD should consist of a network of organisations, bodies, other networks and experts (Network) capable of providing technical assistance in relation averting, minimising and addressing loss and damage associated with the adverse effects of climate change to provide for the implementation of relevant approaches at the local, national and regional level in developing countries that are particularly vulnerable to the adverse effects of climate change.

Accordingly, we consider that the SNLD may have a coordinating entity that is located in a designated city, however it will primarily draw from a worldwide network of organisations that deliver relevant services.

Roles and responsibilities

We consider that, like the CTCN, the members of the Network should be responsible for undertaking the substantive work to assist developing countries which are particularly vulnerable to the adverse effects of climate change with averting, minimizing and addressing loss and damage associated with the adverse effects of climate change.

Governance

We consider that there are a number of possible models for the governance of the SNLD. However, in general terms, the SNLD will operate within the terms of reference and be accountable to, and under the guidance of, the CMA through a governance body (e.g. an advisory board, which would need to be established).

The operational modalities and rules of procedure for the governance body could be established by the body itself and they should take into consideration the functions that the SNLD should be performing and has been designated in decision 2/CMA.2.[7]

The governance body could, for example, undertake the following roles:

• Provide guidance on: the reports to be provided by the SNLD to the Executive Committee of the WIM; criteria for prioritising the technical assistance to be provided by the Network to developing countries most vulnerable to the adverse effects of climate change, taking into account the strategic objectives of the SNLD and the Executive Committee of the WIM;
• Approve the reports to be provided by SNLD to the Executive Committee of the WIM; the prioritisation criteria for the technical assistance to be provided by the SNLD; criteria regarding the structure of the SNLD and the designation of organisations, bodies, other networks and experts as members of the SNLD; or SNLD’s programme of work;
• Endorse the appointment of directors, budgets, and financial statements;
• Ensure the application of fiduciary standards, and legal and ethical integrity; and
• Monitor, assess and evaluate the timeliness and appropriateness of the responses of the SNLD to developing countries requiring assistance.

The SNLD should prepare an annual report on the activities of the SNLD to be provided to the Executive Committee of the WIM.

The constitution of the governance body could be recommended by the subsidiary bodies to the CMA at COP26, with the director of the SNLD to be the secretary of the advisory board.

Importantly, the SNLD may have a host organization (see further details in “organisational structure” below) that should provide the necessary administrative and infrastructural support for the effective functioning of the SNLD.

Organisational structure

The organisational structure of the SNLD should be designed and managed to maximise the effectiveness and efficiency of the operations of the SNLD.

The SNLD should have a lean, cost-efficient organizational structure, within an existing host institution (e.g. UNEP), led by a director who will manage a small core team of professional and administrative staff, as required, to be appointed by and responsible to the host organization’s governance structure in order to meet its responsibilities and to efficiently and effectively perform its functions. The director should be approved by and accountable to the host governing body for the effectiveness and efficiency of the SNLD in carrying out its functions.

As soon as practicable after appointment, the director will facilitate the timely recruitment of the staff of the SNLD [coordinating entity/secretariat/management].

Reporting and review

As stated above, in accordance with the request in decision 2/CMA.2 and similar to the reporting structure in place for the CTCN, the SNLD [coordinating entity/secretariat/management] should provide an annual report on its activities and those of the SNLD and on the performance of their respective functions to the Executive Committee of the WIM.

The report should contain all the information necessary to meet the principles of accountability and transparency required by the Convention and shall also include information on requests received and activities carried out by the SNLD, information on efficiency and effectiveness in providing technical assistance to developing countries, and information on ongoing work as well as lessons learned and best practices gained from that work.

The secretariat should commission an independent review of the effective implementation of the SNLD four years after its inception. The findings of the review, including any recommendations regarding enhancing the performance of the SNLD, should be considered by the CMA. Subsequently, periodic independent reviews of the effectiveness of the SNLD should be conducted regularly (e.g. every four years).

Term of agreement to host the SNLD

The terms of reference should set an initial term of agreement for hosting the SNLD. Reflecting the arrangement for the CTCN, this may be for five years, with two four-year renewal periods, if so decided by the CMA.

2. Financial arrangements

Decision 2/CMA.2 provides that the Executive Committee of the WIM should invite the board of the Green Climate Fund to continue providing financial resources for activities relevant to averting, minimizing and addressing loss and damage in developing country Parties.[8]

The CMA decision at COP26 could set out that the governance body of the SNLD is to liaise with the Executive Committee of the WIM to arrange that the Green Climate Fund’s financial resources be provided to the SNLD to facilitate their activities relating to averting, minimizing and addressing loss and damage in developing country Parties.

Further, a CMA decision could encourage (or urge) Parties (and private and non-governmental organisations, funds and other stakeholders) to make available sufficient financial resources to assist with the funding of SNLD activities.

The SNLD’s governance body should then prepare a budget and determine the technical assistance they can provide, in light of the financial arrangements they have been able to implement.

3. Process for operationalization of SNLD

The process for operationalizing the SNLD should take place intersessionally throughout the next year. The CMA decision at COP26 could direct the Executive Committee of the WIM to work with the UNFCCC secretariat to undertake work to assist in identifying the gaps in national policy and to map the technical assistance required to inform the development of the SNLD modalities and procedures. Work should also be undertaken with the Executive Committee of the WIM to arrange for or provide advice on (as appropriate), amongst other things:

• the appointment of a director of the SNLD;
• funding of the SNLD;
• the provisional creation of the advisory board;
• the drafting of the budget;
• expressions of interest from organisation, bodies, other networks and experts to join the Network; and
• the drafting of the prioritisation criteria to determine which developing countries require the most immediate technical assistance.

The CMA decision could also request that the SNLD elaborates on the SNLD’s modalities and procedures based on its terms of reference, once the SNLD is operational.

4. Selection process for the host of the SNLD

Generally, organisations such as the SNLD will be hosted by an organisation (e.g. UNEP hosts the CTCN). The CMA decision should set out the selection process for the host of the SNLD, with requirements that the selection process should be conducted in an open, transparent, fair and neutral manner. The CMA decision may also set out further detail in terms of the UNFCCC secretariat issuing a call for proposals by a designated date, and the criteria by which the host organisation will be selected.

[1] Report of the Conference of the Parties on its sixteenth  session, held in Cancun from 29 November to 10 December 2010; Report of the Conference of the Parties on its seventeenth session, held in Durban from 28 November to 11 December 2011; and Report of the Conference of the Parties on its eighteenth session, held in Doha from 26 November to 8 December 2012.

[2] Warsaw International Mechanism for Loss and Damage associated with Climate Change Impacts and its 2019 review.

[3] Report of the Conference of the Parties on its nineteenth  session, held in Warsaw from 11 to 23 November 2013.

[4] Report of the Conference of the Parties on its nineteenth session, held in Warsaw from 11 to 23 November 2013

[5] Warsaw International Mechanism for Loss and Damage associated with Climate Change Impacts and its 2019 review.

[6] Report of the Conference of the Parties on its nineteenth session, held in Warsaw from 11 to 23 November 2013

[7] Warsaw International Mechanism for Loss and Damage associated with Climate Change Impacts and its 2019 review.

[8] Warsaw International Mechanism for Loss and Damage associated with Climate Change Impacts and its 2019 review.