This Legal Response Initiative briefing paper examines approaches for binding financial arrangements in the context of a new legal instrument on climate change. Written by LRI Executive Director, Christoph Schwarte, and by David Rossati from Edinburgh Law School, the briefing offers four possible draft provisions on binding commitments for resource mobilization to support climate mitigation and adaptation in developing countries.
Based on the global goal of USD 100 billion per year by 2020 as pledged by industrialised countries in the 2009 Copenhagen Accord, the four draft options for the apportioning of costs among developed countries are: i) External allocation ratio, ii) Burden-sharing agreement, iii) Contribution reference level and iv) Subsequent decisions. While the first option uses the existing UN financial system as the apportioning formula, the second is based on quantified financial commitments listed in an Annex and the allocation of a minimum amount per country. The third draft option reflects contributions equivalent to a given percentage of each country’s Gross Domestic Product, and the fourth one provides for a joint transfer of a total amount determined by the Meeting of Parties, an approach that could be merged with other options.
The briefing also sets out additional provisions referring to transparency, efficiency and compliance in connection with the proposed legally binding financial arrangements.