As part of the Indian States Climate Leadership project supported by the MacArthur Foundation, the Climate Group hosted a sectoral webinar on ‘Catalysing Climate Smart Growth in Indian States through Finance for Climate Action.’ In the webinar, we convened experts from states, civil society organisations and banking/financial institutions on the topic to share their insights with our audience. The experts set the scene from an Indian perspective and discussed the needs, opportunities and solutions to access public and private finance for state climate action in the country.
The event commenced with a scene-setting presentation by Neha Kumar, India Programme Manager, Climate Bonds Initiative. Neha gave the audience an overall perspective of the available tools and mechanisms, both national and international, to advance finances in climate action in India. This session was followed by a panel discussion with Dhriti Pathak, Research Associate, TERI; Poonam Sandhu, Financial Sector Specialist and India Team Lead Consultant, NRDC; Rathin Roy, Managing Director, Research and Policy, ODI; and Tamiksha Singh, Associate Research Fellow, TERI. Channelling mainstream funds for climate action does have the potential to catalyse India’s fight against climate change; however, there was clear consensus amongst the speakers that states need to clearly present their needs and ways in which they will utilise the funds to achieve their climate mitigation and/or adaptation goals within a concrete timeframe. In India, the targets attributing to climate mitigation are broadly set by the national government, and the climate adaptation and resilience plan lies with the states. Hence, the panellists referred to the State Action Plan on Climate Change (SAPCC), as an important tool in understanding the region-specific adaptation needs of each state and stressed the fact that finance is needed to implement the targets reported in the SAPCC.
Regarding challenges that states face when accessing and accelerating finance, the panellists spoke about the lack of knowledge, skills and capacity needed to understand the instruments and channels available to states such as blended, international, domestic and multilateral finance. The importance of capacity building which would enable states to tap into the opportunities and financial instruments available to them at the state level, was highly stressed upon by our experts. Climate change is an environmental and socio-economic issue impacting the most vulnerable communities across the country. Most of the funds are currently being diverted towards climate mitigation or repairing and rebuilding infrastructure due to the increased frequency of extreme events. To prevent this and ensure socio-economic protection from the impacts of climate change, investing in climate-resilient infrastructure and disaster risk management was also touched upon.
The panel discussion was followed by impactful testimonials from two states - Odisha and Ladakh. These testimonials focused on accessing finance to implement innovative solutions. Priyambada Pattanaik, Junior Scientist (Scientific), Forest, Environment and Climate Change Department, Government of Odisha, shared how the state aimed to mainstream climate finance into state budgets by releasing the first of its kind “Climate Budget” in India. On the other hand, Snigdha Verma, Head, Front Office, Convergence Energy Services Limited (CESL), alluded to how financing supports implementing ambitious climate actions in Ladakh.
The testimonials presented by the state of Odisha and UT of Ladakh were great examples of states overcoming the aforementioned challenges. In Odisha’s climate budget effort, the state government instructed different sectors to do a climate relevance and sensitivity assessment. This exercise enabled the state to understand its sector-specific climate vulnerabilities and prioritise actions regarding mitigation and or adaptation needs as required. On World Environment Day this year, the Union Territory (UT) of Ladakh signed an MoU with UT Ladakh, Admin Kargil and CESL to commence a pilot project on solar storage technologies and off-grid based solutions to provide clean energy in the UT. It will be done by utilising the mechanism of blended finance from different interested investors by articulating the climate action needs of the UT.
The webinar was able to shed light on the challenges faced by states to access and catalyse finance for climate action and the opportunities they could tap into to achieve their climate action targets. Finance has been a challenge for states, mainly in the global south and these deliberations are essential to bringing the focus of relevant stakeholders to this pertinent issue. There is a greater need for both the solution providers and beneficiaries (states) to come together more often to jointly unlock opportunities to support finance flows for state climate action in India. As part of the Indian States Climate Leadership Project, the Climate Group endeavours to convene experts in future forums to address some of these challenges faced by subnational governments in India.