nology transfer and capacity building are necessary to achieve low-carbon societies at the global scale. The importance of research and development, information infrastructures and institutional planning was also pointed out. It was highlighted that there is a need to promote further development of technologies such as carbon capture and storage and biofuels. Carbon offsetting was also recognized as an effective mechanism that provides a wide range of stakeholders such as citizens, companies, and governments with opportunities to contribute to mitigation actions. It was observed that in shifting toward low-carbon societies, international cooperation on carbon offsets will play an important role.

## Use of economic instruments for sound emission reductions

7. The view was shared that market mechanisms such as emissions trading, tax incentives, performance-based regulations, fees or taxes, and consumer labelling could assist in setting a price for carbon, send price signals to the market, serve as vital economic incentives that offer long-term certainty to the private sector as well as further incentives to promote CDM projects, and constitute a critical set of instruments for the greater reduction of GHG emissions. Especially regarding emission trading, there were descriptions of actions taken in several countries. It was recognized that countries should further explore the possible utilization of these economic instruments according to their own national circumstances. Such instruments should be designed in a way to avoid carbon leakage.

## Carbon Disclosure

8. It was noted that, in the context of financial and capital markets, it is useful to inform shareholders of significant risks and opportunities raised by climate change through carbon disclosure efforts.

## Cooperation among Developed Countries and Developing Countries

## Co-benefits and technology transfer

9. The need for technology innovation, development and deployment as well as financial support for technology transfer to promote further mitigation actions in developing countries was recognized. In particular, it was indicated that a co-benefits approach can be an effective means to promote mitigation actions in developing countries. The importance of the following activities was pointed out: compiling best practices and developing technology maps and tools to identify projects generating significant co-benefits, especially in the area of pollution abatement, forest conservation, and the 3Rs. Also, the importance of assisting developing countries in building sufficient capacity to use these tools was emphasized. It was also acknowledged that it would be useful to consider how to mainstream policy and measures with co-benefits into development by expanding the current efforts by the OECD to mainstream adaptation into climate-related policy and development efforts. The necessity to improve the current CDM to enhance its contribution to sustainable development was highlighted.

## Adaptation

10. Adaptation is an urgent issue for all, particularly for least developed countries and small island developing states. It was observed that adaptation requires immediate actions in a wide range of areas such as water resources, disaster prevention, food, public health, and coastal management and therefore, capacity building in such areas is urgently needed. As part of this, it is important to mainstream adaptation into development policies and strategies, and in this regard, the OECD's current efforts in this area were commended. For mainstreaming to succeed, it is essential to strengthen the capacity for scientific impact assessments in developing countries. In addition, it is necessary to strengthen international cooperation on observation and monitoring systems for current and future climate conditions as well as on early-warning for natural disasters. The importance of assisting developing countries with these matters was recognized.

## Finance to assist developing countries

11. The gap between the need for sufficient flow of financial resources, both public and private, and current funding levels needs to be acknowledged. The ways and means to bridge such a gap should be elaborated. To support mitigation measures in developing countries, in addition to public funding, private sector investments are essential. The active use of carbon markets and public-private partnerships (PPP), as well as innovative funding mechanisms should be considered for these purposes. The World Bank presented its work to establish a comprehensive financial framework to address climate change and development. Mexico elaborated its proposal for a Multilateral Fund and Climate Change. Furthermore, it was explained that Japan, US and the UK are inviting other donors to join their efforts in establishing a new multilateral fund.