Financial Resources Must Flow from Developed Countries to Developing Countries to Overcome Challenges
Factsheet
India has not taken any negative stand on the financial mechanisms. India has demanded that financial resources be made available by developed countries to developing countries to enable them to tackle Climate Change challenges. It has pointed out that, in terms of the UNFCCC itself, these can only be considered supplemental flows. It must also be recognized that the market mechanism has its own limitations. They cannot be considered as a substitute for the multilateral financing mechanism, but for Adaptation and Mitigation, envisaged under the UNFCCC. The flow of funds under such a mechanism would be in the nature of net transfer of funds i.e. grants, whose disbursement would be governed by a multilateral structure constituted by Parties to the Convention itself. This has already been recognized in the establishment of the Adaptation Fund. This is important because the provision of financial resources to developing countries, as envisaged under the UNFCCC, should follow the priorities of the recipient countries and not those of the source countries.
Financing for Climate Change must also not be seen as another form of Overseas Development Assistance (ODA) but rather payments for entitlements of developing countries under an equitable regime. The financial contributions for addressing Climate Change are net and additional. These can neither be treated under the paradigm of aid, nor driven by markets which are, in any case, dependent on the level of emission reduction obligations taken up by the Annex I Parties.
Factsheet
India has not taken any negative stand on the financial mechanisms. India has demanded that financial resources be made available by developed countries to developing countries to enable them to tackle Climate Change challenges. It has pointed out that, in terms of the UNFCCC itself, these can only be considered supplemental flows. It must also be recognized that the market mechanism has its own limitations. They cannot be considered as a substitute for the multilateral financing mechanism, but for Adaptation and Mitigation, envisaged under the UNFCCC. The flow of funds under such a mechanism would be in the nature of net transfer of funds i.e. grants, whose disbursement would be governed by a multilateral structure constituted by Parties to the Convention itself. This has already been recognized in the establishment of the Adaptation Fund. This is important because the provision of financial resources to developing countries, as envisaged under the UNFCCC, should follow the priorities of the recipient countries and not those of the source countries.
Financing for Climate Change must also not be seen as another form of Overseas Development Assistance (ODA) but rather payments for entitlements of developing countries under an equitable regime. The financial contributions for addressing Climate Change are net and additional. These can neither be treated under the paradigm of aid, nor driven by markets which are, in any case, dependent on the level of emission reduction obligations taken up by the Annex I Parties.
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