November 23, 2000

Statement: Working with Developing Countries to Promote Sustainable Development and Fight Climate Change

The United States and its negotiating partners in the Umbrella Group have offered a proposal to ensure significant new funding to developing countries for their efforts to promote sustainable development and address climate change. This ambitious two-part proposal calls for: 1) Developed countries to make a political commitment at this Conference to provide immediate increases in funding for the Convention to assist developing countries with capacity building, technology transfer, adaptation, and mitigation, and; 2) Establishment of a new mechanism to ensure a steady stream of additional funding to developing countries -- up to $1 billion in the first commitment period -- to maintain and expand these efforts. The Umbrella Group partners call on the Parties to agree on the broad outlines of this new mechanism at The Hague and to launch a process to achieve consensus on its details at COP7.

Addressing the Needs of Developing Countries. Climate change is a global challenge whose solution, ultimately, requires the cooperation of all nations. Under the Framework Convention, all nations have a responsibility to address climate change; developed countries have a commitment to reduce domestic emissions and to assist developing countries in their efforts. The United States takes this commitment very seriously. The U.S. devotes significant resources to technology transfer and other efforts that help developing countries build the capacity to limit emissions and adapt to the impacts of climate change. For instance, the U.S. Agency for International Development has provided more than $1.4 billion since 1993 for climate-related mitigation activities in developing countries, and the U.S. Country Studies Program has helped 55 developing countries shape national communications, develop emission inventories, and build capacity to fight climate change.

New Sources of Immediate and Long-Term Assistance. The Umbrella Group proposal would significantly strengthen developed country support for developing country efforts to address climate change. It has two components:

1) Annex II countries (developed countries, excluding economies in transition) would declare their intent at this Conference to provide immediate increases in funding for the Convention to assist developing countries with capacity building, technology transfer, adaptation, and mitigation. Assistance would be provided through both bilateral and multilateral sources, including the Global Environment Facility.

2) The Parties would declare their intent to establish a new mechanism to provide a steady stream of funding - up to $1 billion in the first commitment period - to support developing country efforts. This new mechanism, perhaps managed through a new GEF "window" with policy guidance from the COP, would include two funds: one supporting adaptation; the other supporting mitigation (emissions abatement and sequestration). Technology transfer and capacity building needs, as determined by the COP, would be addressed by both funds. Specific provisions would include:

• All developing countries would be immediately eligible for the first fund - supporting adaptation-related activities, especially the capacity building and technology transfer needs associated with adaptation -- with special consideration for least developed countries and small island states.
• The second fund - supporting mitigation efforts, especially the capacity building and technology transfer needs associated with mitigation -- would be available to developing countries that are implementing national abatement strategies consistent with criteria to be established by donors and the COP.
• To finance these funds, Annex II countries would make contributions proportional to their initial assigned amount of emission allowances. These contributions can be directed to either fund, or to both. They can be made either as direct financial contributions or through the donation and sale of a portion of a country's emission allowances. In addition, the adaptation fund would be financed by the share of proceeds emanating from the Clean Development Mechanism (CDM) and by voluntary contributions from Annex II countries.
• The total contribution of new and additional resources from the donation of assigned amount to both funds is projected at up to $1 billion in the first commitment period (2008-2012), with the level of funding to be reviewed periodically.