Working Group II completed discussion on the maintenance of interim financial arrangements and continued its discussion of the unresolved paragraphs in A/AC.237/Misc.41 on guidance to the financial mechanism.
AGENDA ITEM 8(b) " MAINTENANCE OF INTERIM FINANCIAL ARRANGEMENTS: The afternoon session opened with a report from John Ashe (Antigua and Barbuda) on the results of the small working group addressing unresolved issues on the maintenance of interim arrangements. The group agreed on the following. The restructured GEF shall continue, on an interim basis, to be the international entity entrusted with the operation of the financial mechanism referred to in Article 11. In accordance with Article 11.4 of the Convention, the COP will review the financial mechanism within four years and take appropriate measures, including a determination of the definitive status of the GEF in the context of the Convention. The US accepted this, but reiterated that the text does not inspire confidence in the GEF.
AGENDA ITEM 8(a)(I) " GUIDANCE: The Group then resumed consideration of A/AC.237/Misc.41.
Sub-paragraphs 1(b)(I)-(iv): India, supported by Saudi Arabia, Iran and Egypt, proposed deleting sub-paragraphs (ii) (information from financial institutions) and (iv) (promoting consistency) because they imposed new conditionalities on activities undertaken outside the framework of the financial mechanism. The US, Australia and the EU expressed concern about the placement of sub-paragraph (iii), which prohibits new forms of conditionality, in this paragraph. The Co-Chair summarized that developing countries prefer keeping (ii), developed countries prefer (iii), and (iv) is a problem for everyone.
Sub-paragraph 1(a)(vii): Based on the concern that the proposed language confused the responsibilities of the COP and the entity operating the financial mechanism, France offered substitute text that attempted to clarify the roles.
Sub-paragraph 2(b): France, supported by the US, suggested deleting this sub-paragraph, on assistance for research and development, stating that the entity should fund specific projects relevant to national programmes, not new or existing institutions. India, Benin, Brazil, China and Colombia stressed the need for including existing institutions and networking to facilitate technology transfer. India agreed to limit the provision to existing institutions, but Sri Lanka and Kuwait commented that they have no existing institutions. The US voiced concern over the commercial connotation of "research and development." The Co-Chair recommended continuing this discussion on Thursday.
Paragraph 2(d): Delegates redrafted this paragraph as follows: "The operating entity or entities should, in accordance with the policies, programme priorities and eligibility criteria as established by the COP, [be available to assist, if so requested/give priority to assisting developing country Parties] in the implementation of the national programmes adopted by developing country Parties." Germany and the Netherlands preferred the second bracketed option. The US, supported by the Netherlands, proposed moving sub-paragraph 1(a)(v) to follow 2(d), since it deals with the same topic. The Chair and India disagreed since 1(a)(v) deals with policies and 2(d) addresses priorities.
Paragraph 2(e): Australia proposed maintaining this paragraph on supporting activities to mitigate greenhouse gas emissions. The EU proposed expanding the paragraph to provide greater detail about how the financial mechanism will support mitigation activities and will circulate its text.
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