According to climate experts, a 3.2°C increase in global temperatures might result in an 18 percent decline in global GDP. This would result in more frequent and severe floods in coastal areas, which would put countless lives in danger and have the potential to cost trillions of dollars in damages. Good intentions alone won’t be enough to stop climate change. To prevent the world from getting worse over the next few decades, adaptation and mitigation procedures need funding, which can come from both public and private sources.
Climate finance is “finance that aims at reducing emissions and enhancing sinks of greenhouse gases and aims at reducing the vulnerability of and maintaining and increasing the resilience of human and ecological systems to negative climate change impacts”, as defined by the United Nations Framework Convention on Climate Change (UNFCCC) Standing Committee on Finance.
The Conference of Parties (COP) to the UNFCCC held its 21st session in Paris in 2015, ushering in a new era for climate financing, policies, and markets. By limiting global warming to well below 2°C over pre-industrial levels, the Paris Agreement has set a worldwide action plan to put the world on track to avert disastrous climate change. It comprises funding for initiatives and programmes aimed at reducing greenhouse gas emissions that are channelled through national, regional, and international organisations. To encourage and facilitate the shift towards low-carbon, climate-resilient growth and development through capacity building, research and development, and economic development, they include climate-specific support mechanisms and financial aid for mitigation and adaptation efforts.
The Paris Agreement and the accomplishment of its long-term objectives are centred on Nationally Determined Contributions (NDCs). NDCs represent each country’s efforts to reduce carbon emissions at a national level and prepare for the effects of climate change. Each Party shall prepare, communicate, and maintain consecutive NDCs that it seeks to achieve as per Article 4, Paragraph 2, of the Paris Agreement.
The UNFCCC received India’s Intended Nationally Determined Contribution (NDC) on October 2, 2015. The proposed programme was euphemistically referred to as “Panchamrita,” which is Hindi for “five ambrosia,” by Shri Narendra Modi, Prime Minister of India. India has committed to cut its GDP’s emissions intensity by 45 percent from 2005 levels by 2030 and to install around 50 percent of its installed capacity for non-fossil fuel-based energy sources. However, concerns have arisen whether India would be able to adequately finance the ambitious climate action plan under its NDC given that financial flows are straggling not only in India but in all emerging and developing nations.
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