staina ilit and limate han e ndia and he orld 19.7
issues6 involved with the mobilisation of green risks pose irreversible costs. Complexity arises in
finance: the case of financing for addressing adaptation
(i) For a developing country like India, and mitigation of GHG emissions. Provision of
poverty alleviation and development finance is embedded in the convention and has
are of vital importance and resources also been mentioned in the Paris Agreement for
should not be diverted from meeting addressing the adaptation and mitigation needs of
these development needs. Green finance developing countries. Tracking of climate finance
should not be limited only to investment is equally important. Lack of a clear definition of
in renewable energy, as, for a country climate finance has led to controversies in recent
like India, coal based power accounts estimates of climate finance.
for around 60 per cent of installed The Climate Finance in 2013-14 and the
capacity. Emphasis should be on greening US$100 Billion Goal report released (late 2015)
coal technology. In fact, green finance by the OECD (Organisation for Economic Co-
for development and transfer of green operation and Development) states that the
technology is important as most green mobilization of climate finance from developed to
technologies in developed countries are
developing countries had reached US$62 billion
in the private domain and are subject
in 2014. The report seems to include the full
to intellectual property rights (IPRs),
value of multilateral development bank (MDB)
making them cost prohibitive.
loans as well as official development assistance
(ii) Green bonds are perceived as new and (ODA), some private finance, export credits, etc.
attach higher risk and their tenure is also
as climate finance, leading to double counting.
shorter. There is a need to reduce risks to
Also it includes the promises, pledges and multi-
make them investment grade.
year commitments and not actual disbursements
(iii) There is also a need for an internationally as climate finance. The decline in allocation of
agreed upon definition of green financing ODA to the least developed countries (LDC) in
as its absence could lead to over- the past year, could perhaps be linked to higher
allocation to ‘climate-related objectives’, implying
(iv) While environmental risk assessment is that ODA is being diverted to ‘climate-related
important, banks should not overestimate activities’.
risks while providing green finance.
The Paris Agreement mandates that
(v) Green finance should also consider transparent and consistent information on
unsustainable patterns of consumption support provided and mobilized through public
as a parameter in deciding finance,
interventions for developing country Parties be
particularly conspicuous consumption
provided by developed countries. However, it is
and unsustainable lifestyles in developed
silent on the definition of climate finance. While
the question of what counts as climate finance
would be decided at a later stage by the Standing
Committee on Finance under the UNFCCC, it
World is alive to the compulsion of combating is important that it should highlight certain basic
climate change as unmitigated climate change elements like7—
6. Ibid., Vol. 2, pp. 182–83. 7. Ibid., pp. 185–86.