India’s Stance on Climate Finance and Paris Agreement at COP29

NewsDecode | Environment & International Relations | Mains Paper 3: Conservation, Environmental Pollution and Degradation, Environmental Impact Assessment

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For Students:

From a UPSC perspective, focus on India’s climate policy, Paris Agreement commitments, and climate finance in international negotiations.

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Why in the News?

• Ahead of COP29, India has reaffirmed its stance on climate finance, advocating for developed countries to honor their financial commitments under the Paris Agreement. India is expected to underline these "red lines" as essential for achieving global climate goals and ensuring equity in climate action.

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Key Issues and India’s Position on Climate Finance

• Climate Finance Commitments: The Paris Agreement, signed in 2015, mandated developed nations to mobilise $100 billion annually in climate finance by 2020 to support developing countries in climate adaptation and mitigation efforts. This target has consistently been missed, leading to concerns over funding gaps for sustainable development.

• India’s Call for Equity: India emphasises that climate action should align with principles of equity and Common but Differentiated Responsibilities (CBDR), meaning developed countries, historically responsible for high emissions, should bear a greater share of financial and technological support for climate action in developing countries.

• Loss and Damage Funding: India also supports establishing a clear Loss and Damage framework, which would ensure funds for developing countries severely impacted by climate-induced disasters. This provision is crucial for climate resilience, particularly in vulnerable regions.

• Push for Transparent and Predictable Funding: India advocates for predictable and transparent climate finance flows, urging that the $100 billion target should be met with public funds rather than reliance on private sector investments. This would provide stability and assurance to developing countries in planning long-term climate projects.

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India’s Climate Policy and Role in COP29

• Nationally Determined Contributions (NDCs): India’s NDCs aim to reduce the emissions intensity of GDP by 33-35% by 2030, increase the share of non-fossil fuel energy, and create a cumulative carbon sink of 2.5-3 billion tonnes of CO₂ equivalent through afforestation. India seeks recognition of its climate achievements, especially given its low historical emissions.

• Renewable Energy Goals: With a commitment to achieving 500 GW of renewable energy capacity by 2030, India is positioning itself as a leader in clean energy transformation, but underscores that continued progress hinges on adequate climate finance.

• Just Transition: India advocates for a just transition that balances climate objectives with socioeconomic needs, ensuring that sectors reliant on fossil fuels receive support to transition towards green jobs without harming livelihoods.

• Technology Transfer: India urges developed nations to fulfill technology transfer commitments to facilitate clean energy adoption and infrastructure development. Access to affordable technology is critical for India to meet its ambitious energy and emission targets.

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Global Climate Landscape and COP29 Expectations

• Climate Finance Shortfalls: The OECD estimates that climate finance reached only $83.3 billion in 2020, falling short of the $100 billion goal. At COP29, developing nations will likely intensify calls for higher and more reliable funding commitments from developed countries.

• Push for Accountability: Nations like India may push for mechanisms to monitor and verify climate finance commitments to ensure accountability, as many developed nations often rely on inflated or non-transparent reporting practices.

• Long-Term Finance Goal: As the world approaches the post-2025 period, India and other developing countries are expected to advocate for a new climate finance goal, potentially surpassing $100 billion to address increased adaptation and resilience needs.

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Challenges to Achieving Climate Finance Goals

• Developed Nations’ Reluctance: Many developed nations are hesitant to fully commit public funds, preferring private sector involvement, which often results in unreliable and unpredictable funding flows for developing countries.

• Economic Pressures: Global economic challenges, such as inflation and post-pandemic recovery, have strained budgets, impacting the ability of developed countries to fulfill climate finance commitments.

• Complexities in Loss and Damage: Establishing a Loss and Damage mechanism remains challenging, with developed nations wary of binding commitments that could lead to significant financial obligations.

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Way Forward for India and Developing Nations at COP29

• Alliance with Developing Nations: India is expected to collaborate with other developing countries to create a unified voice on climate finance, strengthening negotiations for predictable and adequate funding.

• Emphasis on Transparency and Accountability: India can push for frameworks to monitor climate finance contributions, ensuring that funds are new, additional, and reflective of true public investment, rather than recycled or re-labelled aid.

• Advocating for Enhanced Green Technology Access: By lobbying for technology transfer, India can ensure developing countries gain access to sustainable technology without bearing high costs, crucial for accelerating clean energy transitions.

• Focus on Adaptation and Resilience: India’s stance at COP29 will likely include a strong call for adaptation finance to address the needs of vulnerable communities, which is essential for building resilience against climate change impacts.

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Mains PYQ

Q. Explain how international climate agreements and financing frameworks impact India's environmental and economic policies. Discuss India’s position in the global climate negotiation landscape. (UPSC IAS)