Climate finance was one of the most contested issues at COP26 in Glasgow last November. Along with other emerging and vulnerable countries, India demanded greater climate action from the developed world, especially for providing climate finance. With relatively lower shares in the cumulative stock of emissions, higher vulnerability to climate change, and development goals to achieve, India’s stance at climate negotiations has been to push for better enforcement of the principle of common but differentiated responsibilities enshrined in the Paris Agreement, particularly for financing obligations. Carbon pricing is, in theory, a great option for simultaneously reducing emissions and creating an additional revenue stream.
This series is a joint editorial initiative of ETEnergyworld and CSTEP. In the first two articles of the series, we discussed sectoral strategies for climate action. In this article, we get into the mechanisms and challenges of financing the transition.