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Financing climate action in India - Priorities and reflections on COP26 by Indian states

25 March 2022, 11:44 UTC 6 min read

Rana Pujari

2021 was a critical year for global climate diplomacy in decades. In the backdrop of rising incidences of natural calamities and the UNFCCC’s revised NDC synthesis report highlighting the inadequacies of Nationally Determined Contributions (NDCs) to achieve Paris Agreement goals,
COP26 was a chance for political leaders to acknowledge the climate emergency more purposefully and ratchet up their climate ambitions through bolder climate goals.

Among the range of key decisions agreed upon, which are now part of the Glasgow Climate Pact, climate finance remained as one of the key focuses and a long-pending ask by the developing countries from their developed counterparts. Climate finance, as we know, will unlock opportunities and enable technology and knowledge transfer from the developed to the developing countries, which need capacity and resources to fight climate change at the pace the world demands today.

While India announced a set of more ambitious emission reduction targets and joined the global bandwagon by announcing a net zero goal by 2070, it is now important to demystify climate finance in the context of subnational climate action and regional priorities.

Reflections from COP26: What does climate finance mean for Indian states? Although national climate goals are set, and regulatory mandates are guided by the centre, implementation of policies and schemes happen at the state level and thus the role of subnational players is crucial in complementing the efforts of the national government. A recent analysis by the Council on Energy, Environment and Water’s (CEEW) Centre for Energy Finance estimates that India needs $1.4 trillion of additional foreign support till 2070 to achieve the net zero emissions target. Indian states are already taking bold actions through greater climate leadership. In the backdrop of a momentous COP26, India’s renewed goals and the quantum of finance needs, it is important to bring out voices from the subnational actors and view the local perspectives more closely.

Maharashtra, under the dynamic leadership of the Hon’ble Environment Minister, Shri Aaditya Thackeray, is at the forefront of state climate action. The state has announced a slew of initiatives towards ecosystem restoration, urban resilience, sustainable transportation, and climate governance. Sharing reflections on COP26, Saurabh Punamiya Jain, Policy and Research Secretary to the Minister of Environment, Government of Maharashtra said, “In the backdrop of post covid recovery, COP26 was a much needed coming together of nations to gather momentum to meet the 1.5 degrees target. Large parts of the global north need to better their net zero timelines and little has been done to monitor and mobilise global climate finance.” On Maharashtra’s priorities and what net zero means for the state, Saurabh Punamiya said, “Maharashtra’s leadership will focus on creating institutional capacity to mobilise green finance and spur up investments and innovation across sectors. Maharashtra will assume leadership in climate action and get to net zero earlier than 2070. While SAPCC will be guided by the NDCs, Maharashtra will lead climate action through its 43 AMRUT cities which will have a climate action plan aligned to UNFCCC’s Race to Zero Targets.”

In the eastern state of Chhattisgarh, a large percentage of the population is vulnerable to climate change due to their dependence on mining, minor forest produces and agriculture for livelihood. The state prioritises actions around climate resilient agriculture, forest conservation and livelihood generation, apart from decarbonising industry and transport. Cross-sectoral initiatives such as the Narva, Garva, Ghurva, Bari (Narva is streams, rivers and rivulets, Garva is livestock, Ghurva is compost pit and Bari is backyard farming) and the health department’s commitment to achieving net zero carbon emission by 2050 by endorsing the UNFCCC’s Race to Zero campaign, the state is showcasing strong climate leadership. Chhattisgarh State Centre for Climate Change acting as the nodal agency is driving climate actions and policies in the state. Beyond leveraging state budgets and national financing schemes such as the National Adaptation Fund for Climate Change for adaptation projects, support through international financing is needed to enable the state to take bolder climate ambitions beyond their State Action Plan on Climate Change (SAPCC).

The coastal state of Odisha is one the most vulnerable states in India which face the twin challenge of tropical cyclones and droughts, nearly every year. Beyond severe loss to lives and property, this is extreme stress on the state’s exchequer and finances as well. Public expenditure has not received significant focus in the Indian context and spending on climate change issues still remains a challenge. To overcome this, the state undertook a rigorous cross-sectoral analysis to come up with a Climate Budget for 2020–21. Sharing about this and more, Priyambada Pattanaik, Junior Scientist (Scientific), Forest, Environment and Climate Change Department said, “Odisha became the first Indian state to receive the international finance the Green Climate Fund (GCF) support and also mobilised state budget to undertake an extensive budget coding exercise to formulate the Climate Budget in 2018. Climate finance, both domestic and international, will remain at the core to build resilience as achieving the NDCs aligned with 2021–2030 action plan submitted to the national government.”

Beyond its long strides in climate mitigation, Bihar is also prioritising strengthening the resilience of its natural resources and communities. With this in mind, the state has partnered with the United Nations Environment Programme (UNEP) to develop a low carbon development and resilience roadmap for the state by 2040. Sharing the state’s climate ambition, Principal Secretary of Environment, Forest and Climate Change Department, Dipak Kumar Singh said, “We are committed to the cause of our local people and communities vulnerable to the impacts of climate change and the partnership with the UNEP stands testimony to that. COP26 was a momentous event and in terms of the Global South, I think, the climate finance deadlock is yet to be resolved. With India going net zero by 2070 now and states such as Bihar thinking beyond just the SAPCC, the country will need finance more rapidly to meet both, the national and subnational climate ambitions.”


Apart from air pollution, rising greenhouse gas emissions, mainly from transport sector, is a serious concern for the Government of the National Capital Territory of Delhi (GNCTD). GNCTD is aggressively pushing electric vehicle (EV) adoption through its ambitious EV policy and strategic campaigns such as Switch Delhi. Sharing views on Delhi’s strategies and COP26, Reena Gupta, Advisor to the Government of Delhi said, “In setting a pathway for accelerated climate mitigation action in this critical decade, COP26 has been instrumental in demonstrating the work that cities around the world have undertaken to meet the 2030 NDCs through key themes such as climate financing, phasing down of coal power, inefficient fuel subsidies and human health. Delhi as a signatory to C40’s ‘Deadline 2020’ aligned to the Paris Agreement, has already committed to reducing 50 per cent sectoral emissions by 2030 and to achieve carbon neutrality by 2050. Delhi’s comprehensive SAPCC focuses on a 10-year roadmap and will allocate funds for projects to help align with India’s COP26 commitment of achieving net zero by 2070.”

Jammu and Kashmir
Jammu and Kashmir (J&K) remains eco-sensitive and vulnerable to climate change given its proximity to the Himalayas. With receding glaciers and rising average temperatures, climate change has already started impacting its water resources and horticulture and floriculture sectors. As an active Under2 Coalition member, the state is prioritising capacity building through global peer learning and knowledge exchange. To preserve the beauty of Kashmir along with the development of ecotourism, the government needs to allocate financial resources to undertake climate change adaptation and mitigation projects in the region. On J&K’s climate strategy, Mutaharra Deva, Nodal Officer, Jammu & Kashmir Climate Change Cell shared, “There are 11 missions in the Jammu & Kashmir State Action Plan on Climate change (JKSAPCC), three more than the National Missions. We need to prioritise health, tourism and disaster management due to the nature of the economy. Baseline data on key environmental parameters are required to be collected besides the capacity building of the local populace. To achieve all these, finance will remain at the core to meet the goals of JKSAPCC as well as implementing bottom-up capacity building projects in the region.”

Advancing State Climate Leadership
There is no denying that action needs to happen now without delay and states play the most important role when it comes to implementing both national and subnational climate policies. To realise India’s medium term 2030 goals and long term 2070 net zero goal, supporting state climate actions, capacity building and disseminating success stories will assume a greater role going forward in a geopolitically diverse country such as India. To this end, rapidly unlocking large scale finance will be a significant catalyst along with efforts through global initiatives such as the Under2 Coalition and others to drive subnational climate leadership in the region.

This blog was previously published in an issue of TerraGreen.