At the 29th session of the Conference of the Parties (COP29), India voiced its disappointment at the climate finance announcement of $300 billion annually under the New Collective Quantified Goal (NCQG), and rightly so. This goal was
being negotiated to enhance the Global North’s financial pledges to support the Global South in tackling climate-related issues. However, the final commitment fell drastically short of the $1.3 trillion/year demand of the Global South, indicating a clear lack of consideration of equity and common but differentiated responsibilities and respective capabilities (CBDR-RC)—fundamental to the spirit of the Paris Agreement.
Adequate financial resource allocation is a constraint in designing the Global South’s energy transition trajectory. Existing nationally determined contributions (NDCs) are insufficient to limit the global temperature rise to 1.5°C, and ramping up of ambition by the developing nations hinges on climate finance flow from developed countries. Preliminary financial estimations in NDCs indicate that India alone needs over $2.5 trillion to meet its climate mitigation goals by 2030. So far, India has been financing climate actions domestically through national funds, scheduled commercial banks, non-banking financial companies, venture capital funds, alternate investment funds, corporate bonds, green bonds, and domestic private investments. This falls short, given the developmental goals that are yet to be met in India.
Climate finance should not be viewed as a charitable act but a fundamentalnecessity for every nation to protect its economy and population from climatechange impacts.
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Cover image by Mohamed Hassan from Pixabay
