Consultation on Climate Change Financing
New Delhi - Countries will be more successful in accessing climate finance if they are able to embed adaptation and mitigation concerns in national development policies, says consultation organized by the Department of Economic Affairs, Government of India and United Nations Development Programme.
Five-Year Plan seeks to sustain high rates of growth and improve human development outcomes for the country’s poor, while further reducing the carbon intensity of its GDP. However, adoption of strategies to achieve lower carbon intensity may require high levels of investment. Approaches to financing climate change were the focus of a day-long consultation held in New Delhi today.
Organized by the Department of Economic Affairs, Ministry of Finance and UNDP, the discussion brought together government officials, members of Parliament, international experts and representatives of the private sector and civil society. Sessions focused on national priorities for addressing climate change, the role of private sector in generating funds to enable a low carbon trajectory; and the role of the state and civil society in ensuring equitable and sustainable outcomes that do not pass on mitigation and adaption costs to vulnerable communities. “Climate change is an area where government and collective action have an important role to play” said Kaushik Basu, Chief Economic Advisor, Ministry of Finance, Government of India. “In the absence of markets, at the global level we need to put together institutional mechanisms that can ensure collective resources of a good environment.”
While it was agreed that India needs to adopt a sustainable natural resource use pattern, R. Gopalan, Secretary, Department of Economic Affairs pointed out that “Equity and common but differentiated responsibility remain important in global climate change negotiations.” “India has increased budgetary allocations for mitigation and adaptation but there is a need for global multilateral financial transfers as well, he added. According to J. Mauskar, Special Secretary, Ministry of Environment and Forests, “the cost of adaptation needs to be borne primarily by public finances, making global financial transfers in the form of grants or low-interest loans, highly crucial.
The consultation reiterated that the success of countries in accessing climate finance will depend on supportive public policies that encourage greater private sector investment and how far countries are able to embed adaptation and mitigation concerns in national development policies. Speakers also drew attention to the trade-offs between mitigation actions and development objectives. According to Yannick Glemarec, UNDP Director for Environmental Finance, “National budgets will be an important component of initial funding for climate change. However innovative mechanisms will be critical to operationalize the Green Climate Fund. Mechanisms such as the carbon tax on international transport, financial or currency transaction tax can in the long term create an enabling environment to attract private finance from capital markets for serious adaptation and mitigation measures.”
As India responds to the climate change challenge with strategies to reduce carbon intensity of its economy, there is a need to simultaneously increase the energy consumption of millions of poor who subsist at very low levels of consumption and lack access to basic services. According to Caitlin Wiesen, Country Director, UNDP India “The State and civil society have a crucial role to play in ensuring the poor do not bear the burden of climate change and are empowered to build resilient futures”. Recognizing the potential impact of climate change on economic and human development, for the firsttime ever, the Economic Survey of India will include a chapter on climate change.