Leading Climate Expert Advocates for Annual $1 Trillion Finance Goal

New finance goal should be $1 trillion annually, says top climate expert

Excerpts:

What should be the quantum of NCQG going forward that can help developing countries prepare for energy transition?

The NCQG (new collective quantified goal on climate finance) is meant to replace the earlier target of providing and mobilising $100 billion per year collectively by developed countries by 2020. This earlier target had been formalised at COP16 in 2010 and the 2020 timeline was subsequently extended to 2025 at COP21 in 2015. This goal was reportedly achieved two years after the target date, but there remain question marks regarding the accuracy and methodological robustness of the reported figures. Two UNFCCC-related reports/submissions outline both the desired quantum and attributes of the NCQG.

(i) In November 2022, a report by the Independent High-Level Expert Group (IHLEG) constituted by the COP26 and COP27 presidencies together with the UN Climate Change High-Level Champions, found that developing countries (excluding China) will require investments totalling $2.4 trillion per year by 2030, including $1 trillion per year from external sources, to achieve Paris Agreement goals.

(ii) India’s submission on the NCQG to the UNFCCC highlighted some key aspects of India’s position on the subject. Per this submission: (a) Developed countries should proactively fulfil their commitments (b) At least $1 trillion annually, mainly via grants and concessional finance from developed to developing countries (c) NCQG to be accessible, affordable, new, and additional.

Thus, both analytically and per India’s position, the NCQG should be in the region of USD 1 trillion per year. At the same time, this should be composed primarily of grants and concessional finance and be new and additional.

Can India have a mechanism to compensate for the loss and damage caused by these events?

By 2030, the projected cost of loss and damage is estimated to be between $290 and $580 billion for developing countries alone. Looking at India, CEEW’s research suggests that 80% of the Indian population is residing in districts highly vulnerable to extreme climate events, India alone is estimated to have suffered damages of over $56 billion between 2019 and 2023. This accounts for a fourth of the economic damages due to weather-related disasters in the Asia-Pacific region.

That said, India’s disaster response is founded on the National Disaster Management Policy (2009) which provides relief via the National Disaster Response Fund and State Disaster Response Fund. Notwithstanding, loss and damage compensation due to climate-related disasters, follows a different approach. Loss and Damage (L&D) refers to the adverse effects of extreme and slow-onset events – effects that occur despite mitigation and adaptation measures.

Over the past several years, it has become clear that countries that have contributed the least are paying for and bearing the brunt. Relief for L&D, in this understanding, should harness resources based on principles of equity and historical responsibility and advocate for an effort that is led by the developed countries on account of their historical emissions, unfulfilled pledges, and capacity to pay. Supporting developing countries for immediate relief and long-term recovery is critical due to their low resources, economic realities and adaptive capacity to bear the costs of past, present, and foreseeable losses. For instance, it is reported that over 50% of the debt increase in many climate-vulnerable countries relates to funding the recoveries post-disaster.

Globally, India has also already shouldered several leadership initiatives related to loss and damage, such as the launching of the Coalition of Disaster Resilient Infrastructure (CDRI), a multi-stakeholder global partnership to build resilience into infrastructure systems. India is also a founding member of the Infrastructure for Resilient Island States (IRIS), hosted at CDRI in India, which seeks to promote resilient, sustainable, and inclusive infrastructure development in SIDS.

If we look back, COP28 was a step in the right direction, but it hasn’t sufficiently raised climate ambition, held historical polluters accountable, or established effective mechanisms to finance climate resilience and a just low-carbon transition for the Global South. The lack of mandatory (hard) obligation for developed countries to provide support and no mention of the target or the scale of the contribution in the decision text exonerates developed countries from all responsibility.

Currently, the amount mobilised under the fund stands at a mere $661 million. Together with $131 million for funding arrangements, pledges amounted to the equivalent of $792 million against the ask of billions of dollars. So, if we look at developing a compensation mechanism internally in India, there is a need to consider the capacity of the developing world to pay and competing development priorities. What we need is an arrangement wherein the developed nations are the primary contributors, delivery of finance through non-debt-inducing instruments (grants) accounting for the economic realities, and guided by the core principles of equity, historical responsibility and ability to pay. Domestically, India can better focus on incorporating global measures in national policy and practice to support national institutions and make a global call for the development of a Global South-led research consortium dedicated to scientific exploration of “event attribution” to enrich climate science, build research capacity in developing countries, and strengthen the L&D framework to address climate-related risks.

Why do you think we are seeing a spike in extreme weather events this year?

The spike in extreme weather events this year can be attributed to a combination of global climate dynamics and localised factors. One of the primary reasons is the increasing impact of climate change, which has altered weather patterns worldwide. Global average air temperatures began exceeding 1.5C of warming on an almost daily basis in the second half of 2023 when El Niño began kicking in, and this has continued into 2024. Rising global temperatures are intensifying the water cycle, leading to more frequent and severe events like floods, droughts, and cyclones.

In India, this has been particularly evident, as 2024 has been a year of extremes—from record-breaking heatwaves that scorched many parts of the country to devastating floods that disrupted lives and livelihoods coupled with unusual patterns in the monsoon and more intense cyclones along the coasts.

Our analysis at CEEW, where we studied 40 years of monsoon data, shows a significant shift and erratic patterns, especially in the last decade. The study found that 55% of tehsils witnessed an increase and 11% witnessed a decrease in southwest monsoon rainfall in the past decade. However, the same tehsils also saw an increase in the frequency of heavy rainfall days, indicating the uneven distribution of the increase in total rainfall due to extreme events.

Climate change risk is determined by three factors: the likelihood of dangerous events (hazards), the number of people and assets in harm’s way (exposure), and how susceptible these people and assets are to damage (vulnerability). With rising instances of extreme weather events, as more people begin to live in coastal areas (increase in exposure) and as more infrastructure is built in hilly regions (increase in vulnerability) that are more sensitive to landslides, the risk and impact of climate change is set to increase.

CEEW’s district-level Climate Vulnerability Index highlights India’s vulnerability to hydro-meteorological disasters and identifies that more than 75%of districts in India, home to over 80% of India’s population, are vulnerable to extreme weather events such as floods, droughts, and cyclones.

Additionally, urbanisation and environmental degradation in India have exacerbated the effects of these extreme events. Rapid, unplanned urban expansion has led to the loss of natural buffers like wetlands and forests, which traditionally absorbed the impact of heavy rains and storms. In regions like the Himalayas, deforestation and infrastructure projects without adequate environmental safeguards have increased vulnerability to landslides and flash floods. The combination of these global and local factors is leading to more frequent and severe weather events in India. What’s crucial to understand is that this isn’t just a one-off event; we’re witnessing a trend where each year brings more severe and widespread climate impacts. This underscores the urgent need for India to strengthen its adaptive capacities and build resilience against a future where extreme weather events become the norm.

We are seeing floods in Delhi, Gurugram, Chandigarh and landslides in Kerala. How much has this got to do with mindless infrastructure planning and lack of foresight?

India is urbanising rapidly, with cities like Delhi, Gurugram, and Bengaluru expanding to meet the needs of growing populations and economic activities. However, this rapid development is taking place alongside significant shifts in weather patterns as well, making these urban areas increasingly vulnerable to extreme weather events. An analysis by CEEW found that 23 per cent of districts, including New Delhi, Bengaluru, and Indore, have experienced both deficient and excessive rainfall in the last 40 years. In the last decade, the patterns have shifted towards more wetter conditions and extreme rainfall. This means that these areas are seeing more unpredictable and extreme weather, with dry spells followed by intense rain, leading to a higher risk of both droughts and floods.

Urban flooding, which is significantly different from rural flooding, is becoming a major issue due to this combination of rapid urbanisation and changing monsoon patterns. Urban areas, with their developed catchments and impermeable surfaces, see flood peaks—meaning the highest point of water flow during a flood—up to eight times higher than in rural areas (NDMA). Faster flow times in cities—where water rushes through streets and drains much more quickly than in natural landscapes—lead to rapid flooding, giving little time for response and causing significant damage to infrastructure and property. This is particularly concerning in states with high GDPs, such as Maharashtra, Tamil Nadu, Gujarat, and Karnataka, where 64 per cent of tehsils or sub-districts have seen an increase in heavy rainfall days over the past decade, putting not just lives but also costly infrastructure at risk.

The need for better urban planning that accounts for climate risks is more urgent than ever. Comprehensive land-use planning, strict zoning regulations, and robust stormwater drainage systems are critical to reducing the risk of extreme weather events in cities. Several cities have developed provisions for stormwater drainage systems, however, such systems easily become overwhelmed in cases of extreme weather events when the quantity of rainfall surpasses the normal quantities. For example, Delhi recorded the highest rainfall on a single day for the first time in 88 years in June 2024, causing widespread flooding. Hence, cities need to accommodate the increasing risk due to climate change and build capacity for extreme weather events. For example, CEEW’s ward-by-ward assessment in Thane identified flood hotspots and developed a pre- and post-monsoon plan to manage the increasing risk. However, many cities still fail to incorporate future climate risks into their Master Plans, and where plans do exist, they often lack the institutio4nal capacity and financial resources for implementation. While the Ministry of Housing and Urban Affairs has issued guidelines and manuals, urban local bodies (ULBs) frequently struggle with funding and training to effectively use these resources. However, states like Himachal Pradesh are integrating adaptation measures into urban planning and building institutional capacity under the Indian Himalayas Climate Adaptation Programme (IHCAP).

But, without significant improvements in urban planning and institutional capacity, Indian cities will continue to face rising risks from extreme weather events, with potentially devastating consequences.

How can India protect itself from severe economic losses from these events?

The economic losses from extreme weather events in India are staggering, with a significant portion of these losses being uninsured. An analysis by Munich Re suggests that losses from natural disasters amounted to USD 270 billion in 2022, of which 55 per cent were uninsured. Furthermore, the Coalition for Disaster Resilient Infrastructure (CDRI) estimates that low- and middle-income countries (LMICs), including India, face an average annual loss of USD 397 billion due to infrastructure damage alone. This accounts for 54 per cent of the total infrastructure risk globally. Himachal Pradesh suffered losses amounting to INR 1,140 crore, with the maximum damage to the road infrastructure during the recent rainfall and floods this year, underscoring the urgent need for India to protect its infrastructure from future climate risks. Climate change and the rising frequency of extreme weather events have also been identified as the single biggest risk by industries and businesses, according to the Global Risks Report 2024. Extreme weather events such as floods impact FMCG companies by affecting the production of agricultural materials, and heatwaves affect labour productivity in urban areas resulting in significant economic losses. Without action, these losses will only escalate, threatening not just the economy but also the livelihoods of millions.

To mitigate these losses, India must prioritise the development of disaster-resilient infrastructure. According to the World Bank, investing in resilient infrastructure in LMICs could yield net benefits of USD 4.2 trillion, with USD 4 in benefit for every USD 1 invested. This highlights the importance of building infrastructure that can withstand extreme weather events, reducing both immediate damage and long-term economic impacts. Additionally, cities should develop City Climate Action Plans (CCAPs) which must be based on risk and vulnerability assessments that identify the most vulnerable groups and identify mechanisms to implement local-level adaptation. Cities like Mumbai, Bangalore and Chennai have already started this process, allocating financial and human resources to manage risks such as urban flooding more effectively.

Integrating Nature-based Solutions (NbS) into urban planning can also play a critical role in reducing economic losses. NbS, such as green roofs, rain gardens, and constructed wetlands, are cost-effective and sustainable, providing multiple benefits, including flood risk reduction and improved urban resilience. For instance, Pune’s pilot project to manage stormwater through NbS has shown how natural infrastructure can mitigate flood risks while also enhancing urban green spaces. Moreover, climate-proofing industries can help reduce disruptions and productivity losses by assessing their vulnerability to extreme weather and developing insurance mechanisms.

Finally, scaling adaptation finance through mechanisms like municipal and resilience bonds or public-private partnerships will be essential for implementing these strategies at the local level. The successful issuance of green bonds by the Indore Municipal Corporation, for example, demonstrates how innovative financial instruments can support urban resilience efforts.

How can cities respond to extreme heat like the episodes we saw this summer?

First, the extreme heat events witnessed this year, not only in India but globally, have intensified the focus on urgent heat action and validated the IPCC’s predictions that heat-related health risks will be one of the greatest challenges for South Asian countries. This urgency is further underscored by the United Nations Secretary-General’s call to action on extreme heat, which calls for a concerted effort to enhance international cooperation in caring for the vulnerable, protecting workers, boosting economic and societal resilience through data and science, and limiting temperature rise to 1.5°C by phasing out fossil fuels and investing in renewable energy.

Over the last decade, India has demonstrated leadership in addressing heatwaves through pioneering Heat Action Plans (HAPs), National Disaster Management Authority (NDMA) guidelines, workshops, and the India Meteorological Department’s early warning systems. However, as extreme heat events intensify and our cities warm at twice the rate of the rest of India due to urbanisation and climate change, further efforts are crucial.

First, cities must urgently enhance public health resilience against heatwaves, which, though invisible, have widespread and often underestimated impacts on human health, ranging from heat stroke to productivity loss. Unlike cyclones and floods, the effects of heatwaves on the population are less tangible, making precise measurements of when the temperatures become hazardous to human health and where the at-risk populations are for preparation of the health sector is crucial. The second generation of heat action plans (HAPs) created by Indian cities should shift focus from response to comprehensive preparedness. Currently, over 97% of HAPs lack integrated risk and vulnerability assessments, limiting the ability to prioritise actions during heatwaves.

For example, CEEW’s collaboration with the Thane Municipal Corporation resulted in a heat risk mapping framework that considers extreme temperatures, humidity, urban heat islands, and health vulnerabilities — ward by ward. Additionally, the lack of heat-health impact data hampers efforts to mitigate risks. The National Centre for Disease Control’s new formats as part of the National Programme on Climate Change and Human Health for recording heat-related health data must be adopted by states and local bodies.

Second, heat is not currently recognised as a notified national disaster eligible for full funding under disaster management funds such as the State Disaster Response Fund (SDRF), making it essential to integrate heat action into long-term urban planning. This can be achieved by aligning heat risk mitigation strategies with existing central and state-sponsored schemes and programmes. For instance, initiatives like enhancing green cover and rejuvenating water bodies should be aligned with the SMART City and AMRUT Missions, offering dual benefits. Additionally, co-beneficial solutions such as cool roofs and solar rooftops should be integrated into urban planning. Proven models, such as the Net Zero cooling shelter in Jodhpur, parametric insurance in Ahmedabad for outdoor women workers, and Telangana’s cool roof policy, should be scaled up through collaborations among civil society organisations, private players, and the government.

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