Enhancing India’s Readiness to Climate Finance

Enhancing India’s readiness to access and deliver international climate finance
into further institutional development within other DFIs that focus on different sectors and
geographies, so that climate finance delivery can spread across a wider sub-section of Indian society.
MRV Function
Readiness Gap 7
India has limited experience in measuring, reporting, and verifying domestic, private, and
international climate finance. Systems for tracking volumes of climate finance have not been
systematically applied, and estimates on the impact of climate finance spend are even more limited
In most countries (India included), MRV activities have focused on measurement and reporting
national GHG emissions levels to the UNFCCC through periodic National Communications. Reporting
has also been an important component of donor-funded projects by large international organisations
like the World Bank or climate funds like the CTF. In these cases, countries are usually required to
report on the implementation of a project, and to determine the emissions reduction impact against a
pre-determined baseline level.
While many countries like India have a long track-record of conducting project M&E, these type of
tracking systems have not been applied on a more systematic scale to the climate finance policy
space. This is rapidly changing, as countries are becoming increasingly interested in tracking the total
volume of climate finance that they receive (from international and domestic sources) to determine the
size of the financing gap needed to implement their national strategies. India has not yet made any
coordinated attempt to track the total volume of climate finance it receives, or to estimate the
effectiveness of climate finance in helping to deliver priority actions under the NAPCC. Rather, climate
finance tracking and effectiveness has been restricted to the individual project-level, and has been
driven by donor reporting requirements.
Lessons & Options for India
Experience from South Africa shows that countries are beginning to develop systematic MRV
systems that can track climate finance from international and domestic sources (both public
and private sectors), and use this data to estimate the effectiveness of climate finance in
meeting national climate priorities.
Experience from Indonesia shows that more limited MRV of national budgetary spending on
climate-related activities can provide useful input into the coordination and planning of climate
finance delivery.
The South African government is currently working on the design of a national MRV system
that will track all actions (mitigation, adaptation, and financing) under the country’s National
Climate Change Response Strategy. The system has been designed to track the volume of climate
finance received from a variety of sources – including international funds, the domestic budget, and
private sector investors at the national and international levels. To capture this data, a two-tiered data
collection system has been outlined. At the top level, data will be collected through channels such as
the Ministry of Finance for national expenditure, the OECD/DAC Rio Markers and MDB reporting
channels for bilateral and multilateral climate finance, and voluntary channels for the domestic and
international private sector. Top-level data will be compared against ‘bottom-up’ data that is generated
through reporting on climate change ‘response measures’ – strategies, programmes, policies and
projects that target GHG reductions and improve climate resilience in South Africa. Reporting on
response measures will capture information on the source of project financing, among other metrics
(e.g. GHG emissions reduced, number of people made less vulnerable, etc.), which will be
aggregated within a national database. These two sources of climate finance data will be processed
by a central Climate Finance Advisory Committee – to determine both the cumulative volume of
Ref: Ricardo-AEA/R/ED59216/Final Report
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