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India has the opportunity to play a significant role in providing global-level financial support for just transitions and many other initiatives as the chair of G20 countries. There is also an opportunity for India to play a role in a global agreement for this purpose. India can use its leadership to advance equitable solutions, especially in the area of climate change.
The climate think tank 'Climate Trends' organized a webinar to discuss opportunities available to India as the president of G20 countries and how it can use its leadership to advance equitable solutions.
Avinash Persaud, Emeritus Professor of Gresham College, believes that India is in the best position to resolve issues related to action finance.
He added that India needs to recognize the injustice being done to the environment, and the world needs even more investment in resilience.
Persaud suggested that India should play a crucial role in increasing the scope of multilateral development banks to provide new loans and increase their loan portfolio.
Concerns about Green Financing Initiatives
Ulka Kelkar, Director of the Climate Change Program at the World Resources Institute India, noted that various countries around the world have had to reduce their domestic spending at the cost of sustainability building and adaptation. This is not just a case of repaying loans, but also a matter related to funding for adaptation.
Kelkar also said that various banks, including the World Bank, are not generating new additional funds for green transitions in various sectors such as energy, but funds are being transferred from sectors like agriculture, health, and water to finance low-carbon energy infrastructure.
Referring to the Just Energy Transition Partnership (JETP) set up to help select emerging countries that are heavily dependent on coal to make a just energy transition, Kelkar said that there was a lot of enthusiasm about JETP in the beginning but when the facts related to it came to the fore, this enthusiasm kept disappearing.
97 percent of the JETP is going to South Africa's account in the form of loans rather than financing. This is certainly disappointing because these are not activities that can be financed through debt.
Key findings from IPCC report discussed
During a recent discussion, the speaker highlighted two noteworthy facts from the latest IPCC report. Firstly, the wealthiest 10% of the world's population are responsible for almost half of all greenhouse gas emissions, while the bottom 50%, who are most affected by climate change, only contribute to 15% of emissions.
This unequal distribution of responsibility highlights the need for addressing inequality and injustice. Secondly, it was pointed out that the existing and proposed fossil fuel infrastructure is set to emit 850 billion tonnes of greenhouse gases, which is far more than the 510 billion tonnes that can be accommodated in the 1.5°C carbon budget.
Lack of Enthusiasm for JETP
RR Rashmi, Distinguished Fellow and Programme Director, Earth Science and Climate Change raises fundamental questions about JETP, pointing out that the issues related to energy transition at the domestic and global levels are quite different.
He said that the lack of consideration for these differences in JETP has led policymakers to question how JETP's energy transition finance differs from the existing systems in the international capital market and financial system, particularly in relation to supporting pollution-free development.
He pointed out that the JETP raises important questions about the equitable dimensions of energy transition, such as whether it will only focus on coal-based energy systems or support the transition to renewable energy. Additionally, he questioned whether the multilateral financial system is already providing sufficient loans to India.
Speaking on the current global situation, Rashmi emphasized that the world is at risk of failing to meet emission reduction targets, and is on track to exceed a 1.5°C rise in global temperatures.
As the current year is India's G-20 presidency, he stressed the importance of addressing the challenge of climate change and achieving global adaptation goals. However, he questioned whether any major successes would be achieved in the upcoming COP, stating that this is the most fundamental question.
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