Editorial: Climate finance holds key
Despite the lofty promises, western countries have failed to compensate for the damage they have caused to the environment over decades. Undoubtedly, the issue of climate finance will be the key focus of the deliberations as nations gear up for yet another round of the United Nations climate conference — COP27— slated to be held […]
Despite the lofty promises, western countries have failed to compensate for the damage they have caused to the environment over decades. Undoubtedly, the issue of climate finance will be the key focus of the deliberations as nations gear up for yet another round of the United Nations climate conference — COP27— slated to be held at Sharm el-Sheikh in Egypt early next month. The success of the climate negotiations, and thereby energy transition, would hinge on climate finance by the industrialised nations. The ambitious climate goals set by India and other countries can be met only if they get adequate funds. According to the official calculations presented in Parliament a few years ago, India will need at least $2.5 trillion to meet its 2030 climate targets. It translates into $170 billion every year till 2030. But the updated NDC (nationally determined contribution) is much more ambitious and requires much more funds. According to the International Financial Services Centres Authority Expert Committee on Sustainable Finance report, India will require investments of $10 trillion to achieve the net-zero target by 2070. It is clear that without any real progress on finance, there will be no equity in climate negotiations. India’s arguments at the upcoming summit will continue to revolve around the transfer of technology and climate finance from developed to developing regions. In 2009, rich nations agreed to send $100 billion a year in climate finance by 2020 but failed to meet the target in full. However, they have been putting pressure on developing nations to increase the NDC ambition or meet ‘Net Zero’ (bringing greenhouse gas emissions to zero level) targets early.
Developed countries, which have historically contributed to most emissions leading to temperature rise and climate change, must take responsibility for assisting developing nations financially by putting a compensation mechanism in place. India’s position on loss and damage due to climate change is that developed countries have a bigger contribution to environmental damage and resultant calamities that have taken place in developing countries, in particular the island nations. On their part, the developing nations are already doing what they can to achieve climate goals without climate finance. The COP27 would, hopefully, help in bridging the trust deficit. The world will have to reach net-zero emissions of carbon by 2050 if it is to limit the temperature rise to 1.5°C. For India, achieving climate targets involves a huge set of challenges because it is among the countries which are still dependent on coal for meeting their energy requirements. In order to switch to clean energy, the country must invest heavily in R&D and chalk out clear plans that are environmentally friendly for sectors like infrastructure, transport, industrial production and forestry. India needs to explore ways to secure finances and technologies to fund its massive transition to clean energy.
