Climate Finance, Hard Fact
There are inadequacies of current Climate commitments by developed countries and the debate over the $100 billion target, and the need for greater focus on adaptation projects. The article also emphasizes the necessity for countries, including India, to explore domestic resources for climate finance.
Insufficient Climate Finance Commitments:
- Global Polarisation on Climate Change: India's G20 presidency takes place amidst divisions, especially concerning climate change, with inadequate consensus.
- Debate over 100 Billion dollar Target: The longstanding target of $100 billion for climate finance is criticized as insufficient, and the debate revolves around the figure's basis and logic.
- Fossil-Fuel Subsidies vs. Climate Finance: Fossil-fuel subsidies in many countries have exceeded the funds allocated for climate finance, exacerbating the imbalance.
Challenges and Ambiguities in Climate Finance:
- Complexity of Climate Finance Needs: Meeting the Paris Agreement goals necessitates around $4.35 trillion, while actual spending is significantly lower.
- Mitigation vs. Adaptation: Climate finance primarily focuses on mitigation projects (93%), which are deemed bankable due to revenue streams, while adaptation projects face high upfront costs and risk perceptions.
- Debate on Allocation and Accessibility: The debate over $100 billion highlights the disparity between commitments and actual disbursements, raising concerns about the effectiveness of funding mechanisms.
Necessity for Domestic Resource Mobilization:
- Shift Towards Domestic Mobilization: Countries like India need to rely more on domestic resources for climate finance due to uncertainties surrounding international commitments.
- Role of Financial Institutions: Financial institutions should support mature technologies (e.g., wind, solar) and emerging ones (e.g., green hydrogen) through various funding models.
- India and funds: For Countries like India, it is all the more pertinent since it is doubtful that we would be eligible for receiving concessional finance.