During the climate negotiations in Cancun, parties agreed that developing countries will take nationally appropriate mitigation actions or NAMAs to reduce their GHG emissions. In contrast to the CDM, NAMAs need not be project-based and do not necessarily address point-sources of emissions or result in the issuance of carbon credits to be bought and sold in the carbon market. A NAMA is simply any action that ultimately contributes to greenhouse gas emission reductions while addressing the development needs of a country. While a NAMA may encompass a specific project or measure to reduce emissions in the short-term, it may also encompass policies, strategies and research programs that lead to emissions reductions in the long-term.The open and flexible nature of the NAMA has given rise to three finance-sourcing typologies, which are outlined below, including the expectations for monitoring, reporting and verifying (MRV) the results of the NAMA.
At COP 19, held in Warsaw in November 2013, Parties to the UNFCCC decided (Decision 1/CP.19) ‘to invite all Parties to initiate or intensify domestic preparations for their intended nationally determined contributions, without prejudice to the legal nature of the contributions, in the context of adopting a protocol, another legal instrument or an agreed outcome with legal force under the Convention applicable to all Parties towards achieving the objective of the Convention as set out in its Article 2 and to communicate them well in advance of the twenty-first session of the Conference of the Parties (by the first quarter of 2015 by those Parties ready to do so) in a manner that facilitates the clarity, transparency and understanding of the intended contributions, without prejudice to the legal nature of the contributions’. This decision was reiterated at COP 20, held in Lima 2014 (1/CP.20 (32), ‘Lima Call for Climate Action’). Parties also agreed in Lima that INDCs towards achieving the objective of the Convention should represent a progression beyond current mitigation efforts and prevent backsliding.