Climate finance: What India aims to achieve at COP27

The 27th edition of the Conference of Parties (COP) to UNFCCC will start Sunday and it will see India seeking clarity on the definition of climate finance and nudging developed countries to enhance supply of technology and finance needed to address climate change and resulting disasters.

Union Environment Minister Bhupender Yadav will lead the Indian delegation at the conference which will run from November 6 to 8 at Sharm El-Sheikh, Egypt. One hundred and ninety eight parties to UNFCCC gather once a year to discuss how to jointly address climate change.

US President Joe Biden, UK Prime Minister Rishi Sunak and more than 100 heads of states are expected to attend the conference. It is not yet clear if Prime Minister Narendra Modi will attend it.

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According to the Union Environment Ministry, India looks forward to substantial progress on the discussions related to climate finance and clarity on its definition.

"As it is a saying that 'what gets measured gets done', more clarity is needed on the definition of climate finance for the developing countries to be able to accurately assess the extent of finance flows for climate action," it said in a statement.

The absence of a definition allows developed countries to greenwash their finances and pass off loans as climate-related aid.

"India will seek clarity as to what constitutes climate finance whether it is grants, loans or subsidies," Yadav told reporters on Thursday.

At COP15 in Copenhagen in 2009, developed countries had committed to jointly mobilise USD 100 billion per year by 2020 to help developing countries tackle climate change, but they have miserably failed in doing so.

Along with other developing countries, India will ramp up pressure on rich nations to deliver on this promise.

According to the fourth Biennial Assessment of the Standing Committee on Finance of the UNFCCC, the total public financial support reported by developed countries in October 2020 amounted to USD 45.4 billion in 2017 and USD 51.8 billion in 2018.

Developing countries, including India, will also push rich countries to agree to a new global climate finance target - also known as the new collective quantified goal on climate finance (NCQG) -- which they say should be in trillions as the costs of addressing and adapting to climate change have grown.

"Any consensus on an enhanced scale of financial mobilisation could be a welcome takeaway from COP27," said RR Rashmi, Distinguished Fellow, TERI, and former climate negotiator under UNFCCC.

"The figure of USD 100 billion for developing countries was agreed upon much before the Paris Agreement was signed. Based on the Nationally determined contributions (NDCs), the total cumulative financing requirements of the developing world is anything in the range of USD 5.8-5.9 trillion till 2030," Rashmi said.

"The goal of USD100 billion per year of climate finance by 2020 and every year thereafter through 2025 is yet to be achieved. Due to lack of common understanding, several estimates of what has flown as climate finance are available. While the promised amount must be reached as quickly as possible, there is a need now to substantially enhance the ambition to ensure adequate resource flow under the new quantified goal post-2024," the environment ministry said.

It said the discussion on NCQG in the ad-hoc working group must focus on the quantity of the resource flow and its quality and scope.

"Issues relating to access and suggestions for improvement in the function of the financial mechanisms are also important. Besides, an improvement in transparency to ensure appropriate oversight of the quantum and direction of flows is imperative," the ministry said.

Poor and developing countries also want to see a new finance facility to fund the "loss and damage" resulting from climate change -- for example money needed for relocating people displaced by floods.

Developed nations have opposed this new fund which will hold them legally liable for massive damages caused by climate change.

"The existing financial mechanisms, like Global Environment Facility, Green Climate Fund and Adaptation Fund, under the UNFCCC have not been able to mobilise or deliver funds for loss and damage due to climate change," the ministry said.

It said these are under-funded, most of the money is for mitigation (preventing and reducing emissions) and accessing it is cumbersome and time-consuming.

"These are the circumstances based on which G77 and China have proposed adoption of an agenda item on loss and damage finance. It is the time that this issue is accorded prominence on the climate agenda that it rightfully deserves," the ministry said.

Under the Paris Agreement, all parties had decided to have a Global Goal on Adaptation which aims to provide a system for tracking and assessing countries' progress on adaptation actions, and for catalysing adaptation funding.

India says there needs to be significant progress on actions, indicators and metrics in respect of the GGA. "There must not be any hidden agenda of mitigation, especially in the form of nature-based solutions, in the name of co-benefits."

At COP26 in Glasgow, parties agreed to develop a Mitigation Work Program (MWP) to “urgently scale up mitigation ambition and implementation" .

Mitigation means avoiding and reducing emissions, ambition means setting stronger targets and implementation means meeting new and existing goals.

Developing countries have raised concerns that rich nations, through the MWP, will push them to revise their climate targets without enhancing the supply of technology and finance.

India says the Work Programme on Enhanced Ambition in Mitigation and Implementation cannot be allowed to "change the goal posts" set by the Paris Agreement.

"The GST process and the other mechanisms of the Paris Agreement, including enhanced NDCs and submission of the long-term low emissions development strategies, are sufficient.

In the Mitigation Work Programme, best practices, new technologies and new modes of collaboration for technology transfer and capacity building may be discussed fruitfully," the ministry said.

Rich countries are seeking a discussion on Article 2.1(c) of the Paris Agreement, which is about making all financial flows consistent with a "pathway towards low greenhouse gas emissions and climate-resilient development" -- means the funds are tied to low emissions-based developments.

India says "reaching the USD 100 billion per year goal must come first, and the developed countries must be asked to show the roadmap for the same."

At the UN climate conference, India will also emphasise again on its invitation to all countries to join the LiFE movement – "Lifestyle for Environment", a pro-people and pro-planet effort that seeks to shift the world from mindless and wasteful consumption to mindful and deliberate utilization of natural resources.