Climate Change

Under the microscope: Funding for NAMAs

Developing countries appear to have made a significant concession on funding for mitigation actions

Published: Monday 07 December 2009

Developing countries are expected to undertake NAMAs (Nationally Appropriate Mitigation Actions), according to the Bali Action Plan. NAMAs may be supported (i.e. paid for by developed countries), or unsupported (i.e. paid for domestically).

Draft text on the mechanism for registering and funding NAMAs was released today. Equitywatch brings you the following detailed analysis:
(a) Whether supported NAMA should be recorded in a registry as a part of the financial mechanism or should be a separate mechanism is still being debated (not clear on the position of different blocks).

(b) Whether autonomous NAMA should be part of this registry/ mechanism or not, is still under debate – developed countries want autonomous NAMA to be part of this registry/ mechanism.

(c) How developed countries will apply for the support for NAMA has not been worked out – whether they will do it voluntarily or a different mechanism is required is still not clear

(d) How will the support required and mitigation achieved for NAMA will be estimated is still not decided.

(e) What is however is clear that there will not be one source of funds for supported NAMA under UNFCCC which the developing countries were demanding. Under the current text, bilateral, regional and other multilateral sources of funding have also been agreed on. This means that there may be a financial and technology mechanism under UNFCCC which provides funds to NAMA, but certainly NAMA money will also come from bilateral, regional and other multilateral sources.

Conclusion: Developing countries have relaxed their position on funding for NAMA. From the previous position of demanding only one source of funding (a financial and technological mechanism under the UNFCCC), they have now agreed to take funds from bilateral, regional and other multilateral sources. This now opens the way for the World Bank type of organization.

Yesterday, US Energy Secretary Steven Chu announced a $350 million fund to promote renewable technology deployment in developing countries. In a press briefing, Minister Jairam Ramesh said India expects to receive about $50 million of the total. It's not clear whether projects under this fund will be registered as NAMAs; however, it represents a significant move towards setting up bilateral funding arragements.
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