Finding the financial resources to meet nationally determined contributions (NDCs) under climate action would be a ‘daunting challenge’, according to the Economic Survey 2019. NDCs outline actions that India intends to undertake post 2020 to contribute to the fight against climate change.
India has been progressing rapidly towards achieving sustainable development goals, demonstrating its responsibility towards acknowledging emerging threats from climate change, the Survey said.
However, the Survey said it continues to face “myriad developmental challenges", including “lack of adequate resources" without which the proposed NDCs, which are a cornerstone of the Paris Agreement on greenhouse gas emissions, would not be fulfilled. “The international community witnessed various claims by developed countries about climate finance flows, but the actual amount of flows is far from these claims," the annual document said.
India would need around $206 billion (at 2014-15 prices) between 2015 and 2030 to implement new technologies and practices in cultivation, improve crop production, increase forest cover, watershed development programmes, flood management and make cities climate resilient in key areas such as agriculture, forestry, fisheries infrastructure, water resources, and ecosystems, according to initial estimates as given in the NDCs.
Additional investments will be needed for greater resilience and better disaster management. The preliminary total estimate for meeting India’s climate change actions between now and 2030 is $2.5 trillion (at 2014-15 prices).
“Finding required financial resources, especially from the private sector, is going to be a daunting challenge," said the report. This would mean mobilizing resources from a variety of sources, in particular the private sector, as well as from domestic public budgets and international public finance, it said.
Private sector financing has been mostly done by banks. However, increasing the scale of sustainable investments may create capacity problems for banks if they are the primary providers of sustainable debt, the report said. “Therefore, capital market products are required to free up the banks’ balance sheet capacity and allow them to underwrite loans to meet the accelerating demands for new sustainable investments," it said.
Developed countries had committed to $100 billion per annum for climate adaptation and mitigation by 2020. However, these commitments have not materialized.