The Financial Mechanism of the Convention
Under its Article 11, the Convention states that the operation of the Financial Mechanism is entrusted to one or more existing international entities. The operation of the Financial Mechanism were partly entrusted to the Global Environment Facility (GEF) in 1994.
At its fourth session in 1998, the Conference of Parties (COP), decided to review the Financial Mechanism of the Convention every four years in accordance with Article 11.4 of the Convention. Since that, five reviews of the Financial Mechanism of the Convention have been conducted in the past, with the most recent one at COP 20 in 2014.
To complement other funding mechanisms, the Special Climate Change Fund (SCCF) was established under the Convention in 2001 to finance projects relating to: adaptation, technology transfer and capacity building, energy, transport, industry, agriculture, forestry and waste management and economic diversification. The Least Developed Countries Fund (LDCF) was established to support a work programme to particularly assist Least Developed Country Parties (LDCs) to carry out the preparation and implementation of national adaptation programmes of action (NAPAs). The GEF, as an operating entity of the Financial Mechanism, has been entrusted to operate the SCCF and LDCF.
In 2001, the Adaptation Fund (AF) was established to finance concrete adaptation projects and programmes in developing country Parties to the Kyoto Protocol that are particularly vulnerable to the adverse effects of climate change
At COP 16 (2010), Parties decided to establish the Standing Committee on Finance to assist the COP in exercising its functions in relation to the Financial Mechanism of the Convention.
At COP 17 (2011) Parties decided to designate the Green Climate Fund (GCF) as an operating entity of the Financial Mechanism of the Convention, in accordance with Article 11 of the Convention. The GCF aims to make an ambitious contribution to attaining the mitigation and adaptation goals of the international community. Over time, it is expected to become the main multilateral financing mechanism to support climate action in developing countries.