Rising global temperatures and erratic weather patterns have made India highly vulnerable to climate change. As over 75 per cent of the country’s districts are identified as hotspots for extreme climate events, there is an undeniable and urgent need to actively address the issue.

When it comes to climate change, not all are impacted equally. Factors such as socioeconomic status, cultural norms and geographic location contribute to the uneven impact experienced by different communities. 

Rural communities often lack the necessary resources and adaptive capacities to effectively deal with the impacts of climate change. Limited access to technology, financial resources, information, and education impedes their ability to adopt climate-resilient practices and diversify livelihood options, thereby increasing vulnerability to the adverse effects of climate change.

Also read: Financial inclusion critical for building sustainable Indian cities

The agricultural sector, heavily reliant on reliable weather and rainfall patterns, suffers greatly from the increased frequency and intensity of extreme weather events. Droughts, floods and storms disrupt agricultural activities, leading to crop failures, loss of livelihoods and food insecurity, leaving farmers exposed to decreased productivity and income instability. 

Additionally, in countries like India, climate change also widens gender-based disparities. In many rural areas, women shoulder the burden of fetching water, collecting fuel and working on family farms, making their daily lives increasingly challenging as climate change exacerbates these difficulties.

Hindered well-being and development opportunities for women and children, due to reduced mobility and decision-making, in the face of increasing challenges further perpetuates the inequity. 

Capacity building critical

Climate information services play a critical role in enhancing society’s resilience, providing essential data on climate risks and available strategies for adaptation and mitigation. By promoting access to climate information, India can empower its citizens to build resilience, make informed choices, and contribute to a sustainable and climate-resilient future.

There should be a focus on enhancing adaptive capacity through climate-resilient agriculture practices, diversification of livelihoods and access to credit and insurance for farmers. Investments in infrastructure, such as water management systems, irrigation facilities and early warning systems, can help communities cope with climate-related disasters. 

Education and awareness programmes that highlight climate change impacts and adaptation strategies should be promoted at the community level. Demonstrating techniques and creating community leadership to tackle climate issues can further help sensitise the larger community. 

Interventions around water management that bring clean potable water to the rural doorstep or sustainable fuel alternatives can directly target environmental indicators and some of the gender disparities associated with climate change.

Building climate resilience in rural India while incorporating a gendered perspective into interventional frameworks can have additional outsized positive impacts on outcomes. Empowering women through gender-responsive policies, and improving their access to education, healthcare and income-generating opportunities, is vital for building their resilience.

Women, children and other vulnerable groups should take on leadership roles, as they are disproportionately reliant on natural resources to support their day-to-day lives. Such resources are more heavily impacted by climate change.

Green growth — a crucial step

Green growth entails balancing economic growth with environmental sustainability, as opposed to pursuing short-term economic development without considering its long-term cost to the planet.

In rural areas, where communities heavily rely on agriculture and natural resources, embracing green growth principles can lead to multiple benefits. Implementing climate-smart agricultural techniques, adopting renewable energy solutions and promoting sustainable land and water management practices can reduce greenhouse gas emissions as well as enhance rural livelihoods and resilience.

Also read: World Nature Conservation Day: These 5 communities of India preserve ecology in their own distinct ways

Embracing green growth strategies can allow rural India to pave the way for a more sustainable and climate-resilient future, benefiting both the environment and its communities.

Philanthropic initiatives play a vital role in building climate-resilient communities. India currently heavily relies on government expenditure (93 per cent in 2020) for social sector funding, the focus for which is largely on achieving UN-mandated sustainable development goals by 2030.

However, for climate finance, private capital has been essential. As of 2019-2020, the private sector contributed over 57 per cent of climate finance in India, amounting to Rs 1,75,000 crore.

The negative effects of climate change demand philanthropic investments as a high priority, safeguarding vulnerable stakeholders and expediting the transition to a net-zero future. Philanthropic action has already played a pivotal role in advancing climate action in India.

Still, domestic and global resources in this area remain inadequate compared to the magnitude of the problem. Given the limited time window to stabilise the climate, the outcomes of philanthropic efforts are highly significant for the future of humanity.

Fostering collaboration and partnerships among various stakeholders, including government agencies, civil society organisations, research institutions and private sector entities, can promote knowledge exchange, sharing of best practices, and joint efforts to build climate resilience in rural India. By working together, we can create a more sustainable and resilient future for all.

The author is the chairperson and founder of The Hans Foundation, a non-profit focussing on sustainable development.

Views expressed are the author’s own and don’t necessarily reflect those of Down To Earth

The discussions around making the Loss and Damage Fund (LDF) fully operational by the 28th Conference of Parties (COP28) to the United Nations Framework Convention on Climate Change (UNFCC) seem to be heading in the wrong direction due to divergent views about the scope, scale and sources of the fund among developed and developing countries.

The Subsidiary Body (SB) conference at Bonn could be an opportunity for course correction to COP28, which will be held in the United Arab Emirates (UAE) later this year.

Also read: High road to Dubai COP28: Why discussions on carbon credits are important at upcoming Bonn climate conference

LDF was brought into existence at the COP27 in Sharm El Sheikh, Egypt, last November after a decades-long struggle by developing countries. The fund is essential for ensuring new, additional and predictable finance for communities most affected by rapid onset impacts of climate change, such as tropical cyclones, and slow onset impacts, such as sea level rise.

Among the 24 members of a Transitional Committee (TC) that was formed in March, 14 are from developing countries, and 10 are from developed countries. The committee’s formation was mandated by the decision text on LDF agreed upon at COP27, and its function was to make recommendations to COP28 towards the full operationalisation of the LDF.

The committee members had their first meeting from March 27 to March 29. In the first meeting, a work plan for the rest of the year was decided upon, which included the addition of a fourth meeting of the committee to the earlier three.

The members also decided that all the aspects of the LDF, such as the sources of the fund and other funding arrangements outside it and how these would be delivered to the communities/countries in need of the funds, would be discussed in each of the meetings.

In the first meeting, members agreed upon most things in principle, though fissures had begun to emerge about the scope and scale of the fund. They also decided on the importance that should be given to funding arrangements outside of the UNFCCC process, such as the Global Shield being led by the V20 group of vulnerable countries and the G7 group of developed countries.

After the first meeting, a workshop was held for the members from April 29 to April 30, wherein different humanitarian and environmental organisations and multinational development banks gave presentations about case studies related to addressing loss and damage.

By the second meeting from May 25-27, the Transitional Committee seems clearly divided between the global north and global south on the very focus of what the character of the fund should be.

At the SB 58, the second Glasgow Dialogue on June 8-10 would be an opportunity for the two sides to come together and course correct for the rest of the two TC meetings so that their recommendations for the COP can be delivered in time.

The developed countries want to minimise the scope of the LDF to addressing non-economic losses from slow onset impacts of climate change such as sea level rise.

Also read: High road to Dubai COP28: Climate finance will be key at Bonn Climate Conference

For relief and recovery after rapid onset events such as tropical cyclones, the developed countries want to rope in humanitarian agencies such as the International Federation of Red Cross and Red Crescent Societies and provide them with funding arrangements outside the UNFCCC process, such as the Global Shield which is predominantly based on insurance instruments with some social protection measures.

The humanitarian agencies are already overstretched with fatigue setting in for their donors. The scale, speed and access required for the LDF, especially in the context of continuous extreme weather events faced by countries, won’t be delivered by relying heavily on humanitarian agencies. However, their role cannot be downplayed.

“The developed countries basically want to minimise their contributions to the LDF and that is why they want to limit its scope as it would be under the UN process and the other funding arrangements outside the UN process such as the Global Shield would be more under their control,” said Harjeet Singh of the non-profit Climate Action Network International.

“Geopolitics should not decide the scale, scope and functioning of the LDF,” Singh added.

On the other hand, developing countries are calling for a grant-based, easily accessible LDF that has a broad scope and scale and can quickly disburse money to the communities in need of the fund. They also want it to be set up inside the UNFCCC process and governed by COP, with priority given to direct access to the funds for communities.

The funding sources should be expanded to include innovative sources such as taxes and levies in line with the principles of equity and common but differentiated responsibilities. This could include taxes on Shipping and aviation sectors and contributions from historical emitters of greenhouse gases.

This is because the most affected by the extreme weather events are also the least responsible for the greenhouse gas emissions that have caused the planet to warm by 1.1°C and changed major aspects of its climate, including extreme weather events.

The current sources of climate finance are mostly loan based, which increases the debt burden of developing countries that are already facing development challenges. LDF should also act as an oversight mechanism which would monitor the activities undertaken by the fund and assess if they have their intended impact.

Hence its governance is of utmost importance, which is being considered to be under the Santiago Network for Loss and Damage, which already has the mandate to advise countries on the technical aspects of Loss and Damage. A separate and new LDF with its own governance is the need of the hour.

This is not to undermine the roles of governments, whether national or local, in acting as the coordination nodes for the disbursements of the fund. All these aspects would hopefully be discussed and ironed out at the second Glasgow Dialogue at the SB 58.

Read more:

Countries will gather in Bonn, Germany June 5-15, for the United Nations’s mid-year climate conference (SB58), a precursor to this year’s main climate summit in December — COP28, which will be held in Dubai, United Arab Emirates (UAE).

Mitigation — the act of reducing greenhouse gas emissions so as to prevent further global warming — is a crucial pillar of climate action, covering entire economic sectors from power, industry, and transport, to even forests and land.

Mitigation at COP27

At the 27th Conference of Parties (COP27) to the United Nations Framework Convention on Climate Change (UNFCCC) in 2022, India proposed language on the “phasedown of all fossil fuels”, calling for attention on oil and gas, in addition to coal. And while the European Union and United States seemed onboard with this, major oil and gas producers like Saudi Arabia, Iran, and Russia were not.

The COP27 outcome document instead reiterated previous calls “towards the phasedown of unabated coal power and phase-out of inefficient fossil fuel subsidies” and also called for a just transition to renewable energy.

Outside the negotiations, the First Movers Coalition — a voluntary alliance of companies “using their purchasing power to create early markets for innovative clean technologies across eight hard to abate sectors” and governments — showed progress, growing from 25 to 65 members within a year.

They announced the joining of the cement and concrete sectors to the coalition. The group pledged to purchase at least 10 per cent of near-zero carbon cement and concrete by 2030 and also committed $12 billion to scale up green technologies and cut emissions.

The issue of a “just energy transition” gained traction at COP27 as well, since Indonesia announced at the parallel G20 summit, that it would be a recipient of about $20 billion in starter funding through a Just Energy Partnership (JET-P) deal to reduce its coal dependence.

Everyone’s talking about the (just) energy transition

Since the UK COP Presidency made “coal, cash, cars, and trees” their crude slogan for COP26 in 2021, the discourse has shifted globally.

Developed countries are still calling for higher mitigation ambition from developing countries (which one could argue requires their climate finance commitment to be met). Meanwhile, the focus has shifted to encompass “all fossil fuels” and a just energy transition, rather than phasing out just coal.

This has certainly brought the oil and gas sector into the spotlight. Decarbonising the oil and gas industry is on the agenda of the UAE COP28 Presidency, although Scope 3 emissions — accounting for 78 per cent of emissions from the oil and gas sector — are not ambitiously addressed. A May 2023 report by the International Energy Agency (IEA) put forth a pathway that could lead to 60 per cent reduction in oil and gas emissions by 2030.

On the energy transition, renewable energy is flourishing in many parts of the world, helping the European Union reduce its dependence on Russian piped gas, for example. Clean energy investment has risen faster than fossil fuel investment in recent years, says the IEA.

About $2.8 trillion is set to be invested globally in the energy sector this year, of which more than $1.7 trillion is expected to go to clean technologies — including renewables, electric vehicles, low emission fuels, grids, storage, they add.

Yet this is not distributed equally across the world, with most of the increase in clean energy investment between 2019 and 2023 taking place in China, the US and the EU — amounting to an increase of $435 billion.

Poor and vulnerable countries are not seeing a clean energy boom in line with their needs.

About 97 per cent of South Africa’s $8.5 billion JET-P package comprised of loans. So, the energy transition is underway. But its nature is not exactly “just”. It will take time for progress on this front. These are issues that the UNFCCC mitigation negotiations must spotlight.

The Mitigation Work Programme

At UNFCCC forums, the prominent space to negotiate on mitigation is the ‘work programme for urgently scaling up mitigation ambition and implementation’ (also known as the Mitigation Work Programme or MWP). Established in 2021, it was proposed to address the insufficiency of Nationally Determined Contributions (NDC), and bridge the gap by increasing ambition in pledges to cut emissions.

At COP27 in 2022, developing countries emphasised that the programme should not be a replication of the Global Stocktake, and should not set new targets and obligations for developing countries.

It should also be guided by the UNFCCC’s principles of CBDR (common but differentiated responsibility) and equity. Over the past year however, the MWP has shifted from a space viewed with hesitation by developing countries, to one where they can possibly lay out constructive demands for international financing and technology support to accelerate domestic mitigation ambition.

In Bonn this month, the MWP’s co-chairs have announced that “accelerating just energy transition” will be the topic of focus in 2023. Centre for Science and Environment (CSE) and Down To Earth (DTE) spoke to Lola Vallejo, a co-chair of the MWP.

Deliberations will begin with a Global Dialogue, followed by an Investment-Focused Event. The Intergovernmental Panel on Climate Change is clearly setting out what needs to happen at a collective level, but the MWP ought to advance multilateral discussions on the “how” and  dive in deeper into countries’ experiences — the good and the bad, Vallejo specified.

“These first events aim to provide a new setup, broadening the participation beyond traditional negotiation circles to make space for the practitioners in charge of the domestic energy transition, civil society experts and financiers,” she said. “They also innovate in terms of facilitating matchmaking to help countries get their projects off the ground or providing space for regional discussions.”

But developing countries face specific barriers which must be brought to the fore. Discussions around the falling costs of renewable energy around the world often neglect the high cost of capital, for example, that makes it unaffordable in many developing countries.

For example, one estimate suggests that unsubsidised solar power costs ~140 per cent more in Ghana than in the US solely because of differentials in cost of capital. According to the IEA, financing costs can be up to seven times higher in emerging and developing economies compared with the US and Europe.

“Financial barriers to the energy transition, including cost of capital, will be discussed in specific breakout groups on the second day of the Global Dialogue, to allow more interaction between participants,” Vallejo said.

“These discussions will be reflected in reports under the MWP, but there is nothing preventing us from connecting the dots with efforts led in other fora — for instance highlighting the IRENA-led work on cost of capital for clean energy for India’s G20 Presidency, or other ideas discussed in the run-up to Summit on a New Global Financial Pact taking place in Paris in June”. 

Vallejo outlined three markers of success for the MWP discussions: A shared understanding of the energy transition challenge rooted in the best available science, bringing country practitioners on board to engage more deeply, and demonstrating to developing countries that the MWP can support tangible outcomes in terms of investment.

Road to COP28

While the focus on a just energy transition is a good start to the year’s first major climate negotiation, there is scope for agreements to deviate away from equity considerations once we start discussing pathways, financing packages, and collective goals.

First and foremost, the energy transition itself must be equitable. Many rich countries, who are also historical polluters, have transitioned from coal to natural gas — which is cleaner but is still a fossil fuel. Developed countries must rapidly reduce their use of coal, oil, and natural gas, and also reduce energy demand through efficiency measures and appropriate behaviour change.

Large developing countries like India, South Africa, Vietnam, and Indonesia derive more than 75 per cent of their primary energy from fossil fuels today. It is not easy to transition away from them, especially when energy demand is still growing.

Moreover, these countries have lower per capita energy use than the developed world and must balance their need for economic development with their commitment to reducing emissions.

The challenge is to find a way to accommodate energy needs without compromising development goals or exacerbating climate change. For this, they must domestically create sectoral pathways for decarbonisation, for not just the power sector, but also for hard-to abate industrial sectors and transport. This will enable the creation of clear ‘asks’ or projects where international financing can be demanded and directed.

CSE-DTE support the setting of a global renewable energy target. The developed world needs to take the lead and add vast amounts of RE capacity while simultaneously phasing out fossil fuels.

The developing world cannot sit back — it needs to scale up RE as well, but to make that possible adequate finance and technology support is required from developed countries.

Concessional financing — with as little dependence on debt-creating instruments as possible — is needed to accelerate the transition in developing countries. This will help developing countries reduce fossil dependence, and also cushion their economies from taxation regimes like carbon border taxes that can reduce the competitiveness of commodities made from dirty power.

Thus, rather than primarily placing demands or “sticks” on phasing out coal, JET-P deals must become the “carrot” to grow clean energy infrastructure in the developing world.

Read more:

Finance is the headline issue for climate politics in 2023. As the 27th Conference of Parties (COP27) to the United Nations Framework Convention on Climate Change provided no concrete outcome on climate finance, there is a lot riding on the Bonn Climate Change Conference in Germany, scheduled from June 5-15, 2023. 

While the $100 billion climate finance goal — first pledged in 2009 — may be met this year, discussions on its successor, the New Collective Quantified Goal (NCQG) on climate finance, will continue at Bonn, where the Sixth Technical Expert Dialogue (TED) will deliberate on the “quantum” of money for the new goal as well as “mobilisation and provision of financial sources”.

According to an estimate by the Organisation for Economic Co-operation and Development, a total of $83.3 billion was provided to developing and emerging economies in 2020 — $16.7 billion short of $100 billion. 

The $100 billion goal was not a negotiated goal, it was conceptualised in a somewhat arbitrary fashion by developed country leaders and does not reflect the true financing needs developing countries face today. 

The Stern-Songwe report of 2022 estimated that $1 trillion per year will be needed in external climate finance by 2030 for emerging and developing economies other than China. The UNFCCC Standing Committee on Climate Finance estimated the needs of developing countries to be from $5.8-11.5 trillion.

The NCQG is expected to be operational by 2025 and will be designed to consider the needs of developing nations.  At COP26 in Glasgow, an ad hoc work programme for the NCQG for 2022-24 was set up. Under this programme, Parties agreed to have four TEDs annually through 2024 to guide the technical work to inform political deliberations at COP.

At COP27, experts lamented the fact that instead of discussing substantive matters like the quantum of finance, the final cover text included procedural details only. It called for the need to significantly strengthen the ad hoc work programme, given the climate emergency. 

It also noted that NCQG should build on lessons learned from the $100 billion per year target. The co-chairs of NCQG were asked to develop a work plan to outline the preliminary topics for each TED in 2023. This was published on March 28, 2023. 

The fifth TED was conducted on March 8-10, 2023. Parties discussed the potential options for the framing and structure of the NCQG.

What will be discussed in Bonn?

The sixth TED will be held on June 12 and 13, 2023 at the Bonn climate conference. The theme will be “quantity, mobilisation and provision of financial sources”. 

Several Parties have submitted their views ahead of the discussions. India, on behalf of the Like-Minded Developing Countries (LMDC) bloc, has said that quantity should be determined based on the needs and priorities of developing countries using a bottom-up approach. Quantity deals with actual figures such as the amount of funds. 

The Least Developed Countries (LDC) bloc has also called for the need to determine the quantitative target. They added that developing countries’ Nationally Determined Contributions (NDC) and National Adaptation Plans (NAP) can provide a benchmark for computing country needs and quantum of finance. The bloc has also asked for finance for loss and damage to be addressed as part of the new goal and included in 2023 NCQG deliberations. 

Civil society organisations have asked for the new goal to be needs-based and science-based. They added that future climate finance should not be in the form of debt-inducing loans and that debt cancellations should be treated as an innovative source of climate finance.

It is clear that discussions on the NCQG must progress with ambition this year. The new figure should be based on evolving climate science and the needs of developing countries. It must be tied to specific results and outcomes to be achieved in a time-bound manner. 

There is also a need for a roadmap on delivery to ensure accountability and transparency. Delays in delivering the updated NCQG figure in the post-2025 period will severely impair climate action in developing countries. 

In 2020, according to OECD, 70 per cent of the $83.3 billion in climate finance was provided to developing countries as concessional and non-concessional loans, while only 26 per cent was in the form of grants (approximately $17.9 billion). 

The currently evolving debt crisis in the Global South underlines the urgent need for more grant-based climate finance, without which developing countries will be pushed deeper into debt, negatively impacting their development.

If you can’t define it, you can’t measure it

In India’s submission to the ad-hoc work program on NCQG on the work plan for 2023, the country has asked for a clear definition of climate finance. It is hard to fathom that there is no universally accepted definition of climate finance. Without it, tracking climate finance flows is challenging. 

It is up to each donor country to label any funds as climate finance. According to the UNFCCC Standing Committee on Finance, climate finance is that which “aims at reducing emissions, and enhancing sinks of greenhouse gases and aims at reducing vulnerability of, and maintaining and increasing the resilience of, human and ecological systems to negative climate change impacts”. 

But there is no standard, internationally agreed definition of what can be counted as climate finance or even what should be reported as “new” or “additional” climate finance. A clear definition is needed so that there is accountability, transparency and traceability of financial flows from developed to developing countries.

Beyond climate finance

Through the UNFCCC multilateral process, the spotlight must be on finance in various concrete forms this year — filling up a loss and damage fund, concessional finance for the energy transition and decarbonisation in developing countries, more financing for adaptation and progress on the NCQG towards an ambitious new goal reflective of the true needs of the developing world. 

Beyond climate finance, urgent attention must be directed to other financial barriers that are hindering the green transition in developing countries. Around 93 per cent of the most climate vulnerable countries are already in debt-distress or face a high risk of being in debt-distress, according to Action Aid. 

The International Energy Agency stated that the high cost of capital and rising borrowing costs reduce the economic attractiveness of clean energy investment in developing countries, even if they possess rich renewable resources. 

This conversation was catalysed in 2022 by the tabling of the Bridgetown Agenda, which put forth a package of proposals. The COP27 cover decision called for reform of multilateral development banks “to define a new vision and commensurate operational model, channels and instruments that are fit for the purpose of adequately addressing the global climate emergency”. 

Climate was a key issue of focus at the Spring Meetings of the International Monetary Fund and the World Bank. Demands must be scaled up at the Summit on a New Global Financing Pact to be hosted by France on June 22-23, where CSE will be in attendance. 2023 has to be all about the money.