Minister of Environment, Forest and Climate Change Intervenes at High-Level Ministerial Dialogue on Climate Finance at COP 27

Union Minister of Environment, Forest and Climate Change, Shri Bhupender Yadav intervened at a High-Level Ministerial Dialogue on Climate Finance at COP 27 today. In his intervention, he said-

” Access to Finance and Technology in developing countries is a must-have if we expect to protect our earth and ourselves from apocalyptic changes. The commitment made by the developed countries to mobilize $100 b from diverse sources by 2020 was a meager amount and remains unachieved till now.  The current needs of developing countries are estimated to be in the order of trillions.

There are several estimates of climate finance. The OECD estimates the flows to be USD83.3 billion in 2020 and USD79.9 billion in 2018, while Oxfam estimates the mobilized amount to be USD19-22.5 billion per year in 2017-18. Other estimates from UNFCCC, are USD45.4 billion in 2017 and USD51.8 billion in 2018.   Evidently, there is no understanding of what really comprises climate finance. Transparency and Trust are the backbones of all multilateral discussions. Having a clear definition of climate finance will promote transparency and trust, vital for furthering constructive deliberations. While we take note of the work carried out by the Standing Committee on Finance, there is a need to further work in arriving at a meaningful definition of climate finance.

High transaction costs for accessing project preparation grants and considerable cofinancing requirements from the developing country need to be addressed. Slow disbursements, lack of flexibility to adapt to changing requirements, and long complex approval procedures with stringent eligibility criteria make difficult access to climate finance difficult. It is not the absence of a bankable project pipeline, but the procedures, inflexibility in approach, and lack of trust with respect to direct access entities that is a problem.

The new collective quantified goal for the period post-2025 needs to be an ambitious mobilization target at grant/concessional term. We require an ambitious flow of financial resources from various sources- public and private with the developed countries playing a pivotal role in incentivizing flows to the developing countries so that finance-the key means of implementation- is at grant/concessional rates. The Nationally Determined Contributions and the Needs determination reports could be a good basis to estimate the requirement. We are also of the view that action to improve the functioning of the financial mechanism to enable access is also critical.

There is only a small window of opportunity to rectify a problem that has accumulated over the centuries. It is really time for concerted action if we want to curtail temperature rise to sustain life.”