CLIMATE CHANGE FINANCE REQUIREMENT

 

Finance is a critical enabler of climate change action. However, an overall assessment and quantification of finance requirements for adaptation and mitigation for a country with so much diversity and demand is a difficult task given the rapid pace of changing technologies and innovation. Estimates by various studies vary in projecting precise requirements but converge on the enormity of funds that would be needed.

 

Preliminary estimates indicate that India would need around USD 206 billion (at 2014-15 prices) between 2015 and 2030 for implementing adaptation actions in agriculture, forestry, fisheries infrastructure, water resources and ecosystems. Apart from this there will be additional investments needed for strengthening resilience and disaster management. An Asian Development Bank Study on assessing the costs of climate change adaptation in South Asia indicates that approximate adaptation cost for India in energy sector alone would roughly be about USD 7.7 billion in 2030s. The report also projects the economic damage and losses in India from climate change to be around 1.8% of its GDP annually by 2050. Mitigation requirements are even more enormous. Estimates by NITI Aayog (National Institution for Transforming India) indicate that the mitigation activities for moderate low carbon development would cost around USD 834 billion till 2030 at 2011 prices.

 

India's climate actions have so far been largely financed from domestic resources. A substantial scaling up of the climate action plans would require greater resources. A detailed and full scale assessment of international climate finance needs will be finalized at a later stage and would depend on the gap between actual cost of implementation of India’s plans and what can be made available from domestic sources. While this would evolve over time, a preliminary estimate suggests that at least USD 2.5 trillion (at 2014-15 prices) will be required for meeting India's climate change actions between now and 2030.

 

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