Grant financing from developed countries, whose historical emissions give rise to the need to reduce emissions in the future, provides a means of internalizing these externalities in accordance with the “polluter pays” principle (Principle 16 of the Rio Declaration on Environment and Development) and the principle of common but differentiated responsibilities establ ished in the United Nations Framework Convention on Climate Change (UNFCCC).2 The cost structure of renewable generation also lends itself particularly well to grant financing, as the recurrent costs are limited to equipment operation and maintenance. This can provide an important means of reconciling the tension between affordability and financial sustainability. As discussed in chapter 5, this would provide an additional $34-$54 billion of ODA per year. Substantial further resources could be generated if developed countries honoured their commitments with respect to climate finance. If donors provided 0.7 per cent of their GNI in total and allocated 0.15-0.20 per cent of this to LDCs, given their relative populations, per-capita ODA to LDCs would be 1.8-2.6 times that allocated to ODCs. This falls far short of reflecting the major differences in their development needs and domestic capacity to meet those needs.