Subaskar Sitsabeshan: Green Climate Fund and climate finance in India

Reading time: 6 minutes
11 December 2014

At a time when ministers and negotiators have gathered in Lima, Peru for the annual climate talks (COP20), Subaskar Sitsabeshan, Project Manager at The Climate Group shares his thoughts on the positive developments on the Green Climate Fund and what it means for climate finance in India.

The Green Climate Fund (GCF), a mechanism to help developing countries counter climate change, reached a psychologically important UN milestone of US$10 billion at global climate talks in Lima, Peru this week.

This welcome development is crucial to meet the broader GCF goal of mobilizing US$100 billion per year by 2020, to support concrete climate mitigation actions to be transparently implemented by developing countries.

On behalf of developing countries, India has spearheaded calls to put pressure on the developed nations to meet their commitments to provide this climate finance.

Climate challenges

It is no secret that climate change is an enormous challenge to a country like India which is grappling with challenges of poverty and development. Uncertainty brought about by climate variability has worsened existing pressures on a number of sectors; pressures which will continue to mount as climate change impacts increase.

While is true that climate action should not hinder efforts to address poverty, at the same time, economic development at the expense of the planet’s and its inhabitants' survival is not development at all.

But with the change of central government in India in May 2014, climate change appears to be taking a central role, with several institutional structures and policies under revision and restructuring. One of those reforms was in the nodal environment ministry, Ministry of Environment and Forests (MoEF), which was renamed to the Ministry of Environment, Forests and Climate Change. Last month there was also a revamp of the PM’s Council on Climate Change, a multi-stakeholder body comprising of 26 members.

Prime Minister Narendra Modi has also promised energy access to India’s 300 million people who lack access to energy, and has called for US$250 billion investments in the next five years of which US$100 billion will go into renewable energy. Consequently, India is becoming a prime test bed for green innovation and scale-up that will help renewables leapfrog fossil fuels in the next five years.

Road to Paris 2015

India had previously cautioned that a robust global climate agreement at COP21 in Paris rests largely on predictable availability of climate financing through the GCF. Following positive developments around GCF, India’s Environment Minister Prakash Javadekar, while acknowledging GCF’s initial round of capitalization, called for a clear roadmap for commitments to the climate fund. The minister said: "I am glad to see some recent momentum building. We are glad to note that parties have pledged US$10 billion in initial resources for the climate fund."

According to a top government official, availability of climate finance is also crucial for India to agree on a peaking year for carbon emission. Dr. Kirit Parikh, Board of Trustee for The Climate Group in India and former Planning Commission member in-charge of energy who is assigned to study different scenarios for the peaking year, said, "Our preliminary results show that India will take 20 more years to arrive at China’s level and that should be an acceptable level for emission peaking", indicating that India may offer 2035-2050 as the likely timeframe for peaking emissions.

In India, climate-related finance through public, private and international sources has started to flow, sparked largely by clear policies in the solar energy and energy efficiency markets. However, a recent study by Overseas Development Institute, summarizes that the climate finance landscape in India is highly fragmented with no formal coordination mechanisms around climate finance amid the central government, sub-national governments, private sector and civil society actors.

Finance collaboration

The study crucially points out that there is also the lack of a domestic project pipeline that could seek international climate finance, and calls for a collaborative working relationship between the Ministry of Environment, Forest and Climate Change and the Ministry of Finance to address these challenges, in order to streamline future international financing in an effective manner.

Recent positive developments around the Green Climate Fund present a unique opportunity for India to integrate international climate finance resources with national objectives especially by convening relevant state, private and civil society stakeholders together.

Now it is imperative India sends coherent policy signals to catalyze investment and identify priority areas for climate finance in the coming days. In order to leverage and multiply GCF’s investments and to have sustained impact, national planning and budgeting also needs to be revisited through the ‘climate change’ lens, and for this, Prime Minister Narendra Modi’s full first year fiscal budget in February will be a crucial landmark.

In addition to the Green Climate Fund, the new Asia Infrastructure Investment Bank and BRICS Bank coupled with ever-increasing private sector investment to the country, positively signals an increased climate finance flow into India.

With increasing climate pressure - and no time to lose - catalyzing large-scale climate finance is undoubtedly a critical step for India’s journey toward a prosperous, low carbon future.   

Want to learn more about COP? Over the next week we are releasing pre and post-COP briefings as well as producing COP20 coverage in our news and blogs and on Twitter. Our States & Regions events in Lima can be tracked on hashtag #statesandregions.

And in case you missed it, here's a brief background to the COP20 in Lima and our infographic showing the history of the COP negotiations.


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