Read the following passage and answer the item(s) that follow, your answers to these item(s) should be based on the passage only.
Climate change is a complex policy issue with major implications in terms of finance. All actions to address climate change ultimately involve costs. Funding is vital for countries like India to design and implement adaption and mitigation plans and projects. Lack of funding is a large impediment implementing adaptation plans. The scale and magnitude of the financial support required by magnitude of the financial support required by developing countries to enhance their domestic mitigation and adaptation actions are a matter of intense debate in the multilateral negotiations under the United Nations Framework Convention on Climate Change (UNFCCC). The Convention squarely puts the responsibility for provision of financial support on the developed countries, taking into account their contribution to the stock of greenhouse gases (GHGs) in the atmosphere. Given the magnitude of the task likely to fall short of the current and projected needs of the developing countries. Global funding through the multilateral mechanism of the Convention will enhance their domestic capacity to finance the mitigation efforts.
With regards to developing countries, it can be inferred from the passage that climate change is likely to have implications on their
Select the correct answer using the code given below:
Statement 1 is correct. The passage explicitly states that "All actions to address climate change ultimately involve costs" and that "Funding is vital for countries like India to design and implement adaption and mitigation plans and projects." It further highlights "the scale and magnitude of the financial support required by developing countries to enhance their domestic mitigation and adaptation actions." This directly indicates that climate change necessitates significant financial outlays for developing nations, thereby impacting their domestic finances.
Statement 2 is incorrect. The passage discusses the financial implications of climate change, the need for funding for adaptation and mitigation, and the responsibility of developed countries for financial support. However, it does not mention or imply any impact of climate change on the capacity for multilateral trade of developing countries. The scope of the passage is limited to financial aspects related to climate action.