Enhancing India’s Readiness to Climate Finance

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Enhancing India’s readiness to access and deliver international climate finance Following extensive consultation and development with stakeholders working in the climate finance policy space, this report lays out a series of metrics that can be used to analyse climate finance readiness in a specific country for each of the four main functions of readiness. To a large degree, the metrics have been developed in consultation with experts who developed GIZ’s Clif Reflect Tool. The metrics take the form of a series of questions about a country’s readiness, grouped in two Tiers under each of the main readiness functions. The questions from GIZ’s Clif Reflect Tool have been adapted to fit within the Readiness Framework functions, and where necessary, have been supplemented by questions developed by the project team. Figure 4.2 provides a high-level outline of the Framework’s evaluation criteria. At the top of the pyramid, each function provides a headline theme relating to climate finance readiness at the national level. For each of these functions, a series of Tier 1 indicators have been elaborated that cover all of the sub-themes of the function. Finally, each of these Tier 1 indicators are backed by a number of Tier 2 indicators (see Tables 4.1-4.3), which are questions that analyse the skills and capacities held by institutions and actors who perform the sub-themes of the four readiness functions. Importantly, the questions have been designed to highlight the planning, management, and implementation competencies listed in the Readiness Framework. As such, when the Framework is used to evaluate a country’s climate finance readiness, the detailed indicators will elicit responses that highlight the extent that these key climate finance competencies are present in key agencies and institutions in the country in question. To apply the Framework in practice, experts working in climate change and environmental policy, finance, and relevant sectors – representing government, national or regional implementing agencies, civil society, think tanks, research institutions, the private sector, and international donors – are consulted and asked Tier 2 questions relevant to their expertise. Answers from the Tier 2 level are scored by the evaluators and aggregated at the Tier 1 level to give headline Tier 1 messages – which can in turn be aggregated to give high-level messages at the functional level. Chapter 5 covers this methodology for application in India in greater detail. Table 4.1: Detailed Tier 1 & Tier 2 indicators for the Political & Strategic functions Political & Strategic Functions Tier 1 Indicators 1. GHG emissions Have emissions estimates been identified at the national and sectoral levels? 2. Risk & Vulnerability Have climate impacts, vulnerabilities, & risks been identified? 3. Economic impacts of climate change Have implications of climate change for the national economy been estimated? Tier 2 Indicators 1.1 What are the major emissions sources in the country? 1.2 What systems (if any) are in place to estimate and account for economy wide emissions (e.g. greenhouse gas inventories, national communications, etc.)? 2.1 What assessments (if any) of climate risk at country and sectoral levels have been completed? 2.2 What are the country’s major vulnerabilities to climate change and what sectors are expected to be most heavily impacted? 3.1 Have the implications of climate change for current public and private sector investment / economic strategies in key target sectors been considered? 3.2 Have the costs and benefits of taking action to shift these strategies been assessed and quantified? Ref: Ricardo-AEA/R/ED59216/Final Report 23
Enhancing India’s readiness to access and deliver international climate finance 4. Institutional response to climate change Have effective institutional mechanisms to respond to climate change been put into place? 5. Institutional capacity to access & coordinate climate finance Is there strong institutional experience/knowledge in accessing & delivering international climate finance? 6. Mainstreaming of CC into national budgets Is climate change mainstreamed into the national budget and financial planning cycle? 7. Role/engagement of private sector Is the private sector involved in the national climate change response? 4.1 Is there a strategy, plan or policy that addresses climate change? 4.2 Who are the key actors/institutions who have championed the climate change response? 4.3 What arrangements for key actors to exchange information and develop collaborative approaches exist and are used? 4.4 How often do key actors meet, and what is the level of engagement and commitment? 4.5 Is there high level political commitment to these arrangements? 4.6 How formalised are these arrangements? 5.1 Are officials at relevant ministries aware of international climate finance opportunities? 5.2 What experience is there in accessing international climate finance? 5.3 How are cross-cutting issues and decisions on climate related funding coordinated across various ministries and DFIs? Are roles clearly defined? 5.4 Have efforts been made to assess where international climate finance might add the most value? (What sectors, what type of financing?) 5.5 Who liaises with existing international funds? 5.6 Do Government and Development Finance Institutions (DFIs) have the capacity to identify and successfully access international climate finance? 6.1 Are climate change priorities reflected in the national strategy also reflected in the budget? 6.2 Do staff in key ministries have expertise or tools to consider climate change linkages in national budgeting planning cycle? 6.3 Have the impacts of climate change on domestic revenues been assessed in national macroeconomic forecasts? 7.1 Have the implications of climate finance for the private investor community been assessed? 7.2 To what extent are there ongoing programmes or projects that seek to encourage private sector investment? How well have they worked? 7.3 To what extent are there forums in place to engage the private sector on climate change issues? 7.4 To what extent do investors and private actors have access to / awareness of/ and use tools to assess climate change impacts (e.g. GHG accounting, or climate risk screening tools)? Ref: Ricardo-AEA/R/ED59216/Final Report 24
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