Enhancing India’s Readiness to Climate Finance

12.02.2016 Views
Enhancing India’s readiness to access and deliver international climate finance Figure 3.3: Current total public climate finance, is underweight in India and overweight in Latin America, when compared to future mitigation and adaptation finance needs Source: Buchner et al. (2012), IEA (2012), World Bank (2010), Vivid Economics. 31 3.4 India’s climate finance performance: High-level trends The analysis in the previous section shows that India is already attracting climate finance that can help the country meet its sustainable development goals – although likely not at the level needed to fully implement the country’s main climate change strategy. In sum, the main messages that come out of this analysis are: India has developed a comprehensive national climate change policy – the NAPCC – which addresses eight priorities for sustainable development with climate change cobenefits. The NAPCC is not backed by a coordinated financing strategy – although estimates of the cost to implement the Plan are at least $38 billion. Since 2003, India has accessed $554 million from multilateral climate funds, with the CTF and GEF being the two most important sources. In 2012 India received nearly $928 million in bilateral climate finance for mitigation and adaptation, excluding funding from Japan. 76% of this financing came from Germany. For both bilateral and multilateral climate finance, delays on disbursement and project implementation remain a barrier that needs to be overcome in India. India was the second largest recipient of CDM investment, behind China, although CDM financing has begun to dry-up and cannot be expected to play a major role in the future. Renewable energy projects are the main destination for private sector climate finance investment, comprising 77% of total CDM funding. Strong government action under the 31 Vivid Economics (2014), Delivery vehicle options for the International Climate Fund, report prepared for ICF spending departments. Ref: Ricardo-AEA/R/ED59216/Final Report 17

Enhancing India’s readiness to access and deliver international climate finance NAPCC will need to be taken to channel investment into other priority sectors in India, such as energy efficiency. Estimates on India’s total annual climate finance flows are likely to be much higher than the cumulative value of multilateral, bilateral and CDM funding outlined in this report, as additional sources of private finance, multilateral climate finance not channelled through dedicated climate funds, and donors like Japan are added to the calculation. India’s track record in accessing climate finance is strong in absolute terms compared to peer countries like Brazil, China, Indonesia, Mexico, South Africa & Thailand. Existing climate finance volumes are nevertheless insufficient to meet the $38billion funding goal necessary to implement the NAPCC, and will need to be supplemented with government revenues, private investment, and further international climate finance. Ref: Ricardo-AEA/R/ED59216/Final Report 18

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Enhancing India’s Readiness to Climate Finance

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