This includes interventions that increase a country’s capacity to mitigate or adapt to climate change, or that improve the enabling environment for climate responses within the country. Cost-effectiveness could also disadvantage certain types of interventions (e.g. small-scale energy-efficiency) or countries (e.g. SIDS), where transaction costs would be relatively higher. Using cost-effectiveness to assess the effectiveness of climate finance more broadly could lead to perverse incentives to channel financing to regions with lower transaction costs as opposed to greater need. These concerns underlie calls from developing countries for “needs-based” as opposed to “results-based” financing in the UNFCCC negotiations (e.g. LMDC, 2013 and remarks by the Philippines in USD, 2013).