Workshop on International Law, Natural Resources and Sustainable
Development
Exploring the Impacts of International Climate Finance on Natural Resources Policies and
Laws in Developing Countries
David Rossati
School of Law, University of Edinburgh
International climate finance – intended as the economic support by industrialised countries
to mitigation and adaptation measures in developing countries – currently constitutes one
of the most contentious topics in the global climate negotiations and a cornerstone of the
international climate change legal regime. Since its engendering in the 1992 UN Framework
Convention on Climate Change, it has developed as a complex and multilevel regulatory
system populated i) by States and national administrations, as donors or recipients of
finance; ii) by other international institutions working as intermediary channels of finance
and implementing entities, and iii) by affected stakeholders, groups and individuals.
As the broad rationale of climate finance is to incentivise developing countries in pursuing a
paradigm shift towards low-carbon and climate-resilient livelihoods and economies, this has
inevitably impacted on their natural resources management and regulations in different
ways. Hence, the core aim of the paper is to provide an initial exploration of such impacts
with a particular emphasis on the role of international institutions as drivers for national
regulatory change.
At the broader level, two linkages can be identified: first, as global warming is stressing the
resilience of natural resources (e.g. water, biodiversity and soil productivity for agriculture)
in developing states, climate finance seeks to work as a catalyst for positive changes by
supporting adaptation projects and programmes. The second dimension is arguably more
complex from a legal standpoint and attains to the reduction of greenhouse gasses
emissions. Differently from the current international legal regime, there is consensus within
the UNFCCC Conference of the Parties that any future legal outcome from current
negotiations will require also developing states to achieve verifiable emissions reductions or
emissions avoidance across their economies. If the climate change regime will prove
successful in pursuing this agenda, then climate finance is likely influence national policies
on fossil fuels extractive industries by promoting pathways towards more sustainable or
renewable energy production. Further, the effective implementation of climate finance
projects on the territories of developing countries often requires recipient countries to
amend their national resources laws.
Against the background of a complex panorama, the paper will focus on the role of the most
prominent international institutions acting as intermediaries and implementers of climate
finance projects and their role in influencing and shaping national natural resources policies
and laws in developing countries. Because part of the public-sourced finance is currently
disbursed either through multilateral trust funds or multilateral development banks, their
internal regulations and financing programmes often target natural resources laws and
capacity building reforms.
The paper will finally question such an increasingly pervasive (from the side of developing
countries) mean of governance vis-à-vis the internationally accepted concept of ‘country
ownership’ by recipient countries in international development aid. Because in our case
‘country ownership’ can be interpreted as a corollary of the international principle of
permanent sovereignty over natural resources, some different applications of this concept
will be showcased in the current practice of climate finance, with a view to grasp some
meaningful insights.