Whither multilateralism? Implications of bilateral NAMA finance for development and soverignty concerns of developing countries

The concept of sovereignty has been considerably redefined by the environmental challenges, particularly those with global implications. While the sovereign right of countries to exploit natural resources (and protect the environment) within national boundaries has been recognised, how this right may be exercised by countries has been facing increasing threat of restrictions on account of the possible negative impacts it may have on other countries and global environment. For developing countries a multilateral regime to address global problems is better suited than a bilateral regime on account of sovereignty concerns. Space to bargain for legitimate space for determining national development agenda, as well as for negotiating a capability enhancing non-intrusive arrangement towards contributing to the global solutions, is relatively wider under multilateral processes – more so, because developing countries can benefit from collective bargaining power. These options are either not available or restricted in a bilateral setting. In the context of climate change, provision of financial support to developing countries under the UNFCCC is one such capability-enhancing non-intrusive arrangement. However, the many bilateral channels of climate finance have reduced the effective bargaining space for developing countries. Many of the terms of these bilateral channels to support Nationally Appropriate Mitigation Actions are in conflict with the long standing negotiating positions of developing countries on climate finance. Hence, implementation of bilaterally supported climate action puts developing countries’ negotiating stances in a contradictory position. Moreover, these terms may be influencing the development agenda in favour of mitigation over development.