| Climate Finance Defined by the UNFCCC as “local, national, or transnational financing — drawn from public, private, and alternative sources — that seeks to support mitigation and adaptation actions addressing climate change.” The OECD tracks flows of climate finance, mostly in the form of loans (69.4% in 2022) and grants (28%), but concerns exist about accuracy, such as including unfulfilled commitments and commercial loans. |
- The 29th Conference of the Parties (COP29), to be held in Baku, Azerbaijan in November is expected to focus on climate finance, with key discussions on the needs of developing countries and the post-2025 climate finance goals.
- Developing countries are highly vulnerable to climate change, relying heavily on agriculture and other climate-sensitive sectors.
- Despite their vulnerability, they contribute relatively little to global emissions, with developed nations accounting for 57% of cumulative emissions since 1850.
- The 2009 Copenhagen Accord pledged $100 billion annually in climate finance by 2020, but the target remains unmet.
- A new post-2025 mobilization target will be discussed at COP29.
- India’s Climate Finance Needs:
- By 2030, India targets 500 GW of non-fossil energy capacity, 5 million metric tonnes of green hydrogen production, and expanded electric vehicle adoption.
- Long-term investments needed for India to achieve net-zero emissions by 2070 are estimated at ₹850 lakh crore.
| New Collective Quantified Goal (NCQG): A priority at COP29 is setting the NCQG for climate finance, which should focus on actual disbursals, new and additional funds, direct public grants, and private capital mobilized by public investments. An independent group has estimated that developing countries (excluding China) will need $1 trillion annually in external finance by 2030. |
Dig Deeper: Read about India’s initiative to achieve Climate Finance needs.
