Synthesis report for the technical assessment component of the first global stocktake: Synthesis report on finance flows-C-CONCLUSION

  1. Conclusions
  2. With regard to the issue of finance, as also outlined by the SCF in its fourth BA, challenges and limitations remain, including with regard to collecting, aggregating and analysing information from diverse sources, although improvements have been made. These limitations need to be taken into consideration when deriving conclusions and assessing the information provided in this report in the context of the assessment of the progress made in achieving the purpose of the Paris Agreement and its long-term goals in general.
  3. In addition to the findings of the SCF in the context of the fourth BA containing an overview of climate finance flows in 2017–2018, an assessment of climate finance flows, and mapping of information relevant to Article 2, paragraph 1(c), of the Paris Agreement, COP 26 and CMA 3 noted the following: global climate finance flows were 16 per cent higher in 2017–2018 than in 2015–2016, reaching an annual average of USD 775 billion; the 2017–2018 annual average of public financial support reported by Parties included in Annex

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II to the Convention in their BRs (USD 52.1 billion) represents an increase of 5.7 per cent from the annual average reported for 2015–2016; the annual average amount of climate finance from the resources of MDBs to developing countries and emerging economies (USD 36.6 billion) represents a 50 per cent increase since 2015–2016; and UNFCCC funds and multilateral climate funds approved USD 2.2 billion and USD 3.1 billion for climate finance projects in 2017 and 2018, respectively.74 Furthermore, COP 26 and CMA 3 took note of the key findings of the fourth BA, including that banks representing over USD 37 trillion in assets and institutional investors with USD 6.6 trillion in assets have pledged to align their lending and investments with net zero emissions by 2050.75

  • As outlined in the executive summary, further work has been mandated by COP 26 and CMA 3 to be conducted with regard to various issues, including methodological issues. Regarding progress towards achieving the goal of mobilizing jointly USD 100 billion per year, the SCF will prepare a report in 2022 for consideration by COP 27, as requested by COP 26 and CMA 3.76
  • In additional, as outlined in the executive summary, CMA 3 decided to initiate the deliberations on setting a new collective quantified goal, recalling decision 1/CP.21, paragraph 53, and decision 14/CMA.1, and identified the modalities and timeline for these deliberations, for work to begin in 2022 and conclude in 2024. The CMA also decided to establish an ad hoc work programme for 2022–2024, to be facilitated by co-chairs, one from a developed country and one from a developing country, appointed, in consultation with the respective constituencies, by the President of the CMA. The consideration of the new collective quantified goal will be in line with decision 14/CMA.1 and take into account the needs and priorities of developing countries and include quantity, quality, scope and access features, as well as sources of funding for the goal, and transparency arrangements to track progress towards achievement of the goal, without prejudice to other elements that will also be considered as the deliberations evolve and taking into consideration the submissions that were invited by CMA 3.77
  • Progress has been made by Parties in strengthening cooperative action on technology development and transfer for the implementation of mitigation and adaptation actions and the provision of support to developing country Parties for the implementation of Article 10 of the Paris Agreement. The provision of support to developing country Parties for technology development and transfer has increased significantly. Developed country Parties have more than doubled their support for technology transfer activities since 2012–2013. The technology support provided by developed country Parties encompasses support for both hardware (equipment) and software (know-how, methods, practices). The technology activities supported by developed country Parties are predominantly related to the later stages of the technology cycle, namely the deployment of mature technologies. However, support for the early stages of the technology cycle, including research and development and demonstration of new technologies, has been enhanced. Cooperative action among Parties on technology development and transfer increasingly takes place at the bilateral level.
  • More than half of the supported activities were mitigation technology activities, while support for adaptation technology activities accounted for nearly a quarter of all supported technology activities. Support for mitigation technology activities mainly focused on the energy sector, in particular renewable energy and energy efficiency. Support for adaptation technology activities mainly targeted the agriculture, cross-cutting and water sectors. Many supported adaptation technology activities in the agriculture sector were related to agricultural practices, such as seed or crop improvements, climate-smart and biological farming, or general food security improvements.
  • Despite the progress made in strengthening cooperative action on technology development and transfer for the implementation of mitigation and adaptation actions and increased support for developing countries for technology development and transfer, needs, gaps and challenges remain in achieving the long-term vision set out in Article 10 of the Paris

74    Decision 5/CP.26 para. 3 and 10/CMA.3, para.1, adjusted to reflect latest available data.

75    Decision 5/CP.26 para 9 and 10/CMA.3, para.1.

76    Decision 4/CP.26, para. 19.

77    Decision 9/CMA.3, paras. 1, 3 and 15.

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Agreement. For mitigation, the most commonly reported categories of barrier to the development and transfer of the prioritized technologies reported by developing country Parties were economic, financial and technical. Within the economic and financial category, most Parties identified lack of or inadequate access to financial resources as the main barrier. In the technical category, many Parties identified system constraints, insufficient expertise, and inadequate standards, codes and certification as the main barriers. For adaptation, almost all Parties reported the following categories of barrier to the development and transfer of the prioritized technologies: economic and financial; policy, legal and regulatory; institutional and organizational capacity; and human skills. Within the first two categories, Parties identified lack of or inadequate access to financial resources and insufficient legal and regulatory frameworks as the main barriers.

  • Progress has been made on enhancing the capacity of developing country Parties to implement the Paris Agreement. An overview of progress in this area is presented in section

C.1 above, in line with the thematic areas outlined in Article 11, paragraph 1, of the Paris Agreement, namely mitigation and adaptation; technology development, dissemination and deployment; access to finance; education, training and public awareness; and the transparent, timely and accurate communication of information. However, developing country Parties continue to face urgent capacity gaps and needs in all of the aforementioned thematic areas, as demonstrated in section C.3 above.

  • Section C.2 above shows that developed country Parties have provided enhanced support for capacity-building and that international cooperation on capacity-building for developing country Parties also includes both South–South and regional cooperation approaches. However, given that reporting on capacity-building related activities both from developed country Parties and developing country Parties remains limited and a range of different reporting approaches are used by Parties, any trends in support for capacity-building can only be taken as indicative, as comprehensive and comparable data remain unavailable.
  • Institutional arrangements supporting the implementation of capacity-building under the Paris Agreement remain limited to the policy and advocacy work of the PCCB. In 2019, the CMA adopted a decision on “initial institutional arrangements for capacity-building under the Paris Agreement”78, which reconfirmed the mandate, priority areas and activities assigned to the PCCB by the COP, but provided no further guidance with regard to the provisions of the Paris Agreement on capacity-building, including in its Article 11. The achievements of institutional arrangements for climate finance and technology under the Paris Agreement have shown the importance of clear implementation arrangements, for example on technology through the technology framework, and the key role that national focal points play as interlinkages between those institutional arrangements under the Paris Agreement and the national level. Compared with institutional arrangements on finance and technology under the Paris Agreement, there is a notable absence of an implementation arrangement for capacity-building.79

78    Decision 3/CMA.2.

79    UNFCCC PCCB. 2022. Synthesis report for the technical assessment component of the first global stocktake. Bonn: Germany. Available at https://unfccc.int/documents/461613.

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