India must institute a robust framework for climate governance

While local governments and states have made strides in adaptation measures and community-driven initiatives, the country’s central institutional frameworks and governance mechanisms are not yet aligned with its goals. 

Global experience underscores the need for a decentralized approach, empowering local governments and supported by robust legislation and financial incentives, to address diverse climate challenges.

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Climate legislation: India’s current climate policies are fragmented across sectors and lack coherence, undermining their effectiveness. A national climate law could unify efforts across central, state and local levels, fostering clarity, transparency and accountability. Such a framework would integrate mitigation, adaptation and resilience-creation with India’s broader development agenda, aligning local actions with international commitments while addressing regional vulnerabilities.

Clarify roles and responsibilities: A robust framework must delineate roles across all levels of governance.

Centralize regulation: Mitigation efforts, like emission reduction, require national oversight to prevent free-rider issues and maintain alignment with global goals.

Localize implementation: Adaptation strategies, such as disaster resilience and sustainable agriculture, are best handled by states and local bodies, leveraging their on-ground knowledge. India could establish state-specific emission targets with judicial mechanisms for accountability, while fiscal incentives could reward states showing progress in renewable-energy adoption and carbon sequestration.

Enhance coordination mechanisms: This would help coordinate climate action across levels of government.

Use intergovernmental councils: Permanent mechanisms, like a restructured Prime Minister’s Council on Climate Change or an independent Climate Commission, could align efforts across ministries, states and sectors.

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Tackle cross-border challenges: Issues like river-basin management and transboundary air pollution require integrated solutions, with state climate councils collaborating under federal oversight.

Centralize reporting: A climate dashboard could provide real-time insights into fund allocations and progress.

 Deploy dedicated climate funds: Establish performance-based grants and adaptation-focused funding. A ‘climate resilience scorecard’ can quantify risks, attract private investments and prioritize high-impact projects.

Use carbon pricing: Borrowing from the EU’s emission trading system, India could adopt absolute pricing mechanisms to send consistent market signals while channelling revenues toward state-level adaptation projects.

Monitor green public finance: Climate-responsive budgeting and expenditure tagging would ensure transparency and alignment with national goals. For accountability, states should submit annual climate action reports tied to funding incentives, evaluated by the Comptroller and Auditor General.

Assure public access: A climate dashboard with comprehensive updates on implementation and utilization should be open to all.

Ensure grassroots participation: Successful programmes, such as Odisha’s green budgeting and Tamil Nadu’s water conservation initiatives, demonstrate the importance of community engagement.

Fund local bodies: Targeted financial mechanisms could support climate projects at municipal and local government levels. Capacity-building programmes would help local institutions implement effective action plans.

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Track scientific advancements for adaptation: A dynamic legislative framework should evolve with the emergence of new knowledge. With a cue taken from New Zealand’s Climate Change Response Act, India could mandate regular reviews of climate policies to reflect advancements in science and technology.

Pilot programmes: Encouraging states to innovate through pilot projects—like Rajasthan’s solar initiatives or Kerala’s flood management systems—can identify scalable solutions for national implementation.

Leverage fiscal federalism: This is critical for fostering cooperation and accountability. To become a central player in climate policy implementation and bridge gaps between policy and funding, India’s Finance Commission could expand its mandate to integrate environmental considerations into fiscal policy more comprehensively. In particular, the commission could align fiscal incentives with performance-based metrics, thus helping drive climate action across states and local governments.

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India is at a pivotal moment in its climate battle. A decentralized governance framework under national oversight can address local vulnerabilities while ensuring alignment with broader goals. Enacting comprehensive climate legislation and creating a cohesive governance framework can close gaps in its current approach and accelerate progress on India’s climate ambitions. Such a framework must integrate fiscal federalism, transparency and accountability, while empowering states and local bodies to lead adaptation and resilience efforts.

The author is distinguished fellow at the Centre for Social and Economic Progress and former member of the 15th Finance Commission.