India’s push for climate finance in Economic Survey 2023 reflects its stance as G20 President

Union Minister for Finance and Corporate Affairs, Nirmala Sitharaman, the Minister of State for Finance, Pankaj Chaudhary and the Minister of State for Finance, Bhagwat Kishanrao Karad on the eve of Budget 2023, in New Delhi on January 31, 2023. Photo by PIB

Union Minister for Finance and Corporate Affairs, Nirmala Sitharaman, the Minister of State for Finance, Pankaj Chaudhary and the Minister of State for Finance, Bhagwat Kishanrao Karad on the eve of Budget 2023, in New Delhi on January 31, 2023. Photo by PIB

  • India’s 2023 Economic Survey, which was presented ahead of the union budget, underlined the urgency of green finance, a relevant area of focus as India assumes presidency of the G20, an intergovernmental forum for international economic cooperation.
  • The Russia-Ukraine war and the subsequent efforts by European countries to protect their energy interests were mentioned in the survey to indicate the energy priority of developing countries.
  • The survey lists India’s actions and achievements on climate change and biodiversity conservation.

As the host of the G20 presidency, India makes a strong case for green finance for developing countries through its Economic Survey tabled in the Parliament on January 31. It says developing nations are caught between development priorities and fighting against climate change.

As a precursor to the Union Budget, the Economic Survey intends to provide the status of the Indian economy through various indicators. The incumbent government presented the last full-fledged budget of its current tenure, today, February 1.

In chapter seven of the Economic Survey, dedicated to climate change, India’s long-standing position is reiterated – a lack of finance will hamper the fight against climate change, the most pressing issue of current times. The chapter notes that India has voluntarily undertaken climate actions. If developed countries expect more ambitious climate measures from India, they must equate it with enhanced initiatives in terms of providing means of implementation, including finance, technology transfer, and capacity-building support.

The survey highlights the challenge for developing countries to access funding for climate action. “Public finances in developed countries are stretched and do not seem to have the intent to mobilise adequate resources for climate action in developing countries. They also do not have the appetite to provide additional capital to multilateral institutions for them to be able to lend more or mobilise greater resources,” it reads.

India has been advocating principles of equity and Common But Differentiated Responsibilities and Respective Capabilities (CBDR-RC), which indicates that while all countries have the shared obligation towards addressing climate change or preventing environmental destruction, the responsibility is not equally distributed among all, since different countries have different capabilities. The CBDR-RC was formalised in the United Nations Framework Convention on Climate Change (UNFCCC) of Earth Summit in Rio de Janeiro, 1992.

Pronab Sen, the first chief statistician of India and former chairman of the National Statistical Commission, told Mongabay-India that the country has been raising its stance in support of these principles at every opportunity. “Through this (Economic Survey), I feel, India aims to signal that there is no dilution in its stand,” he added.

Prime Minister Narendra Modi in G20 all party meeting held in Delhi on December 5, 2022. India holds the Presidency of the G20 from December 1, 2022, to November 30, 2023.
Prime Minister Narendra Modi in G20 all party meeting held in Delhi on December 5, 2022. India holds the Presidency of the G20 from December 1, 2022, to November 30, 2023. Photo by Press Information Bureau of India (PIB).

India’s push for green finance for developing countries, and its inclusion even in the country’s Economic Survey, is connected to India’s current G20 presidency, observes Dhruba Purkayastha, the India director of Climate Policy Initiative (CPI), an independent non-profit research and advisory institution. India holds the Presidency of the G20 from December 1, 2022, to November 30, 2023, where countries with a combined global GDP of 85% will deliberate upon several globally important issues, including trade, climate change, environment, energy transition etc.

Purkayastha says that India is raising the issue of climate finance on behalf of the Global South and that this has been an unresolved issue over many years. Whether it is Nationally Determined Contributions (NDC) or net zero commitment, India is at the forefront of the fight against climate change, he said, adding that, on climate finance, India is in a position to lead global thinking. There is a need to figure out a pathway because capital needs to flow from Global North to climate investments in developing countries, he suggests.

He feels that the G20 Sustainable Finance Task Force which aims to mobilise sustainable finance, offers an opportunity for India, as the host of G20, to lead the global narrative on the issue of sustainable finance.  The world lacks an institutional mechanism to intermediate climate finance where climate investments need to happen, he said and noted that there is a need for global institutional risk mitigation architecture for this which could be managed by International Solar Alliance (ISA). He added that India can show leadership on this issue by framing and structuring a possible global institutional mechanism as an intergovernmental institutional mechanism where every country gets representation and is primarily focused on reducing the cost of capital towards climate investments in non-OECD countries.

Geopolitics at play

The latest Economic Survey highlights the Russia-Ukraine war and how European countries have rushed to coal to secure their energy interest without thinking of bigger climate goals. “The behaviour of European nations in 2022, eminently understandable, demonstrates the return of energy security as a prime requirement for countries. Therefore, it stands to reason that it would be no different for developing economies, too,” it says.

The war-induced recession may also play a role in climate finance, says Krithika Ravishankar, a senior analyst in the Climate, Environment, and Sustainability sector at the Center for Study of Science, Technology and Policy (CSTEP). “With a global recession expected to occur over the next year, developed countries that have consistently shirked responsibility for their share of cumulative emissions will likely be even less responsive to continued climate-finance demands,” she adds.

The Economic Survey points out further concerns hampering climate action such as the fact that Rare Earth Elements (REE) and Critical Minerals (CM) – which are key components of renewable energy and other green technologies – are available only in a few countries and processed in even fewer countries. And “globally synchronised energy transition to non-fossil fuels might be difficult to pull off if adequate REE and CM are not available,” says the survey, compares these elements to crude oil, which was a key player in the geopolitics of the last 50 years or so.

An e-rickshaw in New Delhi. Chief Economic Advisor, V. Anantha Nageswaran, in Press Conference on Economic Survey 2022-23, talked about energy transition as one of the pillars pushing the economic growth of India. Photo by Manish Kumar/ Mongabay.

Energy transitions a pillar to push economic growth

Chief Economic Advisor V. Anantha Nageswaran, termed energy transition as one of the few pillars giving a push to the India economy. He was speaking to the media after the survey was tabled in Parliament. He said that India is well ahead of its target for renewable energy in its overall energy mix. India has set target for 40% of installed capacity will come from non-fossil fuel by 2030. The goal is now increased to 50% by 2030. “We have eight missions now addressing climate concerns. We updated our NDC in COP 27. India has launched the National Green Hydrogen Mission recently. The first tranche of a sovereign green bond worth one billion dollars was just auctioned and received a better yield,” he said.

He reiterated what the survey also indicates – that India is vulnerable to climate change because of its long coastline, monsoon-dependent agriculture, and a large agrarian economy.

The survey gives a detailed list of India’s efforts on climate action and what it has achieved. It lists the progress of eight national missions which are targetted towards climate action and meeting commitments towards NDC). For example, India has achieved a solar power capacity of 61.62 GW under the National Solar Mission. The survey also claims that the forest and tree cover in India has shown a gradual and steady trend of increase in the last one and a half decades.

It additionally claims that carbon stocks in forests in India have gone up from 6941 million tonnes in 2011 to 7204 in 2019. India has recorded increasing mangrove cover from 4639 square kilometres in 2009 to 4992 square kilometres in 2021, the survey notes.

The survey also highlights India’s efforts for the conservation of biodiversity. India enacted the Biological Diversity Act in 2002. Project Cheetah, under which eight Namibian wild cheetahs were introduced in Kuno National Park of Madhya Pradesh, gets space in the list of achievements along with success stories of tiger and lion conservation.

The survey concludes the chapter by saying, “The global climate agenda will advance if advanced countries can set examples of policy and behavioural changes that work in their backyard and whose trade-offs are well recognised and accepted by their people. Then, it might be realistic to expect such policies and behavioural expectations of households to succeed in developing countries with suitable adaptation.”


Banner image: Union Minister for Finance, Nirmala Sitharaman along with her colleagues on the eve of Budget 2023, in New Delhi on January 31, 2023. Photo by Press Information Bureau of India (PIB).

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