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FINANCIAL MECHANISM

Perhaps some of the greatest progress during the interim period was made in the area of the financial mechanism. At INC-11, delegates agreed that the GEF shall continue to be the international entity entrusted with the operation of the financial mechanism. While there is still doubt among some developing countries that the restructured GEF has met all of the requirements stipulated in the Convention, there was no argument that the interim arrangements should be maintained for the next four years. Delegates also asked the Secretariat of the Convention, in consultation with the Secretariat of the GEF, to prepare draft arrangements between the COP and the financial mechanism. The draft arrangements will be introduced at COP-1 and adopted at COP-2. With respect to guidance on policies, programme priorities and eligibility criteria, delegates agreed that the financial mechanism should support agreed activities to mitigate climate change, in addition to the national programmes to address climate change. If the INC had not met during the interim period, it is possible that many of these issues would not have been agreed upon until COP-2, effectively postponing the operation of the financial mechanism and many national programmes to address climate change. The agreements reached at INC-10 and 11 should facilitate the effective implementation of the Convention beginning at COP-1.