India Secures $1.16 Billion for Climate Action

India gets $1.16 billion in climate finance, raising questions on future climate goals.

India has mobilized $1.16 billion in climate finance through its climate action plan. The money has been raised from the financial instruments of the UNFCCC. This was the written response from the Union Environment Minister, Bhupender Yadav, on February 6 to a query raised in Parliament while informing that this amount was composed of funds sourced from GCF, GEF, and Adaptation Fund.

In regard to the current allocation, more than half are coming from Green Climate Fund allocation amounting to $803.9 million is seen as being a new type of financial instrument aimed at developing countries to get them building on their capacity building to fight or overcome climatic change. Again, $346.52 is coming from global environment facility because it impacts international environmental issues associated with climatic change. This contribution from the Adaptation Fund accounts for $16.86 million, primarily aimed at building up strength in vulnerable nations against climate-induced impacts.

Minister Yadav further added, "Despite the international financing done, India still finances most of its climate action from domestic sources. This has a bearing that India is on the right trajectory to adaptation and resilience building to climate change and that it doesn't seem much away from hitting its climate goal even if funding from abroad has been minimal".

This declaration followed warnings about the climate finance going globally. At the 2024 UN climate conference in Azerbaijan, developed countries were expected to commit a lot of money into supporting developing countries' efforts towards climate. Instead, they only promised $300 billion by 2035, much smaller than the $1.3 trillion that should be set for every year beginning 2025. India has also been vocal while condemning the lack of financial measures taken for the unmet amount in tackling this increasing climate crisis.

The Indian government said the short supply of climate finance would not allow progress on global climate goals. India has repeatedly been saying that the funding gap is not only a failure of responsibility by the developed nations but also a major obstacle to global climate action.

The recent Economic Survey further echoes that sentiment within the observation. More importantly, however, it means that funding gap would lead India into reviewing its own 2030 climate targets. In fact, the survey comments that if such adequate climate finance is not done, India may see its drive towards its own climate goals come under a dampener. This of course would impact the other priorities in development themselves if one were to drain climate finance there.
Aggressive targets towards 2030 have been envisioned under India's climate goals where three critical commitments have been pledged.
The very first commitment entered is a 45 percent drop in the emissions intensity from its 2005 levels in the year 2030.
The country will ensure at least 50 percent of electricity generation will come from non-fossil fuel sources.
India will add more forest and tree cover to absorb an additional 2.5 to 3 billion tonnes of carbon dioxide per year.

It is important because these targets have far greater implications for India, anchoring its much larger climate commitment and global climate agenda. However, funding remains a problem, likely to reduce what finances are available to support such ambitious objectives.

The government of India continues to fund its climate initiatives from domestic resources. However, the international financial landscape is equally relevant. With countries like India pushing for carbon footprint reduction and building climate resilience, financial support from developed nations will ultimately determine the possibility of achieving such goals.

Conclusion:While it is a step forward for India to increase its climate finance, the question is whether it would be enough to take India through its long-term climate goals. With a very uncertain future for global climate finance, India and other developing nations need to work in close coordination with the international community to ensure timely and effective financial support. This indeed is a very critical step for India in securing its $1.16 billion funding for climate projects, but with huge challenges, as there's not enough support from developed countries to meet their climate targets. The new reality of climate change worldwide puts no greater pressure than the demand for adequate and sustainable funding to help support climate action in developing countries.

Source: Rajya Sabha, Union Ministry of Environment and Economic Survey