Climate finance refers to local, national or transnational financing—drawn from public, private and alternative sources of financing—that seeks to support mitigation and adaptation actions.
Issues
The climate finance landscape in India is highly heterogeneous, fragmented and dispersed. There are a large number of sources providing climate finance and there is no main agency directing/ streamlining the funds towards national climate goals.
The problems thrown up by the absence of a central coordinating unit is compounded by lack of a coherent domestic climate strategy.
There are several actors involved and each of these actors are providing India some portion of funds that help attain climate goals. The actors have their own interests, priorities and mandates and there is an urgent need for coordinating the multiple financial sources, both domestic and international.
Compared with the investment required to avoid dangerous levels of climate change, the $100-billion pledge is minuscule.
Fund Mechanism in India
National Clean Energy Fund (NCEF): NCEF was introduced in the budget 2010-11. The Fund is designed as a non-lapsable fund under Public Accounts with its secretariat in Plan Finance II Division, Department of Expenditure, MoF. The NCEF has been instituted to support research and innovative clean energy projects in public and private sector entities.
National Adaptation Fund (NAF): Government established a National Adaptation Fund in 2015 with the budget allocation of Rs. 350 crore for the year 2015-16 and 2016-17. The primary aim of the fund is to assist states and Union Territories vulnerable to the impacts of climate change to meet the costs of adaptation. National Bank for Agriculture and Rural Development (NABARD) has been made the National Implementing Entity for the Fund.
Compensatory Afforestation Fund (CAMPA): Under the India Forest Conservation Act of 1980, the state government is liable to receive compensation for the forest land diverted towards non forest purposes in the state. The compensation is to be given by the agency diverting the forest land to the state government on twice the amount of land diverted
National Disaster Response Fund (NDRF) is defined in Section 46 of the Disaster Management Act, 2005 (DM Act) as a fund managed by the Central Government for meeting the expenses for emergency response, relief and rehabilitation due to a disaster. NDRF is constituted to supplement the funds of the State Disaster Response Funds (SDRF) of the states to facilitate immediate relief in case of severe calamities.
