CLIMATE AID
–Jaibatruka Mohanta*
“We are the first generation to feel the sting of climate change, and we are the last generation that can do something about it.” -Jay Inslee
Introduction
Climate Aid can be understood as local, national or transnational financing that is drawn from public, private or other alternative sources that seek to support mitigation and adaptation actions related to the issues that arise in response to climate change.
Reducing carbon emissions requires large-scale investments in the form of green financing; climate aid is the need of the hour, for its mitigation. Further, investment is equally important for adaptation, since financial resources are required to support countries’ that are most vulnerable to the impact of climate change and embrace its consequences.
When dealing with climate aid, climate change is a crucial point. Human lives and health are being affected due to climate change in numerous ways. It is estimated by the World Health Organization (WHO) that by the year 2030 there can be 250,000 deaths per year globally as a result of starvation, malaria, diarrhoea and heat stress.[1] As a result, the healthcare sector might have to expend a whopping $2 – $4 billion dollars annually to mitigate such scenarios. In addition, there are numerous ways in which climate change is affecting human lives and health.
This piece will shed light on the urgent need of climate aid and how countries are vulnerable to the affects of climate change. It will then go on to analyze the steps taken globally to address this burning issue. In addition, it will touch upon the gap between the developed and developing nations; addressing the altercation as to who is more responsible for climate change. Further, towards the end it will dissect the intricacies involved in green financing and how the same needs to be carefully planned and invested.
The overreaching impact of Climate Change
In June 2022, Pakistan started facing heavy rains that prolonged till September, 2022. In this period, several provinces of Pakistan were severely inundated. Close to around seventeen-hundred (1700) people or even more lost their lives, twelve-thousand (12,800) and more severely injured, almost one and a half-million (1.5) & more than eight-lakh fifty thousand houses destroyed. In addition, thirteen-thousand (13000) kilometres of road network were affected, with close to five and a half million acres of crop-land and around one million livestock lost to the mighty floods caused due to the torrential monsoons’.[2]
In the aftermath, of the devastating floods, Mr. Antonio Guterres, Secretary General to the United Nations, during a visit to southern Pakistan, remarked that,
‘I have seen many humanitarian disasters in the world, but I have never seen climate carnage on this scale’.
Further, about six-thousand and four hundred (6400) miles away from Pakistan in the western Pacific Ocean lies the Marshall Islands. Where in the wake of rising sea levels, a part of a coastal cemetery has already been washed away into the ocean, and the coast is being dotted with concrete walls, boulders and piles of vegetation to stave off storms. However, the barriers haven’t acted as a protective measure against flooding and erosion, at an island that is home to more than twenty-seven thousand (27,000) people.[3]
This brings us to the focal point, which is climate disasters have begun. And it is not incidents of the past from which we need to draw lessons; however, the repercussions are right before our eyes.
The recent 2022 Lancet Countdown report published has warned of adverse relationship between climate change and health diseases. It stated about India that heat related deaths have significantly increased by 55%. The rising heat has further incurred a loss of 167.2 billion potential labour hours in 2021 owing to excessive heat exposure resulting in major income losses. The growing temperature has alarmed India’s food security concerns, as a fall of 2% was recorded in the total output for maize, while rice and wheat have come down by 1% each.[4]
Likewise, the Reserve Bank of India (RBI) in its discussion paper on Climate Risk and Sustainable Finance[5] referred to the India Meteorological Department (IMD)’s report on India climate’s climate and placed on record that 2021 was the warmest year in the last two-decades and fifth warmest since 1901[6]. This rise is average temperatures have already started to show its effects, with 756 instances of natural disasters recorded in the last century (from 1900 to 2000).[7] In contrast 354 disasters have been recorded in just the past two-decades (from 2000 to 2021), that construes to 88% of natural disasters have taken place in the last 20 years.
It is also well known that not every nation has equal responsibility towards global warming & climate change. In fact, majority of the causes of the global climate problem may be ascribed to the wealthiest nations. However, the effects of global warming will fall especially hard on poorer and vulnerable nations.[8] In light of this, the global community needs to take a step back in terms of green house emissions and a step forward towards green energy.
Global Steps in Climate Aid
Almost a decade ago, during the 2009 United Nations Climate Change Conference held at Copenhagen, the wealthy nations had made a significant commitment. They committed to providing less developed countries with US$100 billion annually to assist them in coping with climate change and preventing additional temperature increases.[9] This promise is long from being realized. A report published by the United Nations in 2020, showed the $100 billion target was out of reach.[10]
Further, fast forward to the 2021 United Nations Climate Change Conference (COP 26) held at Glasgow, the governments of Germany, Netherlands, Norway, United Kingdom, & the United States, along with 17 other philanthropic foundations have pledged to spend $1.7 billion US dollars between the time frame of 2012 and 2025 to protect the indigenous people and forest communities in order to support their endeavour as the custodian’ of mother Earth’s forests.[11]
Therefore, on a close perusal of international organizations, it can be seen that global leaders are meeting and pledging funds towards the various dimensions of climate change in the name of climate financing. Leadership summits with a focus on green finance have been on the rise. In the backdrop of the same, recently, Ms. Shinta Widjaja Kamdani, Chairperson of Business 20 (B20), the official G20 forum for dialogue with global business community remarked that the G20’s presidency’s arrival in south-east Asian countries is an opportunity to prioritize the issues faced by emerging market economies. In addition, India that is about to assume the G20 presidency by the fall of 2022 – and it should press on the issue of climate financing that has been pledged by the developed nations.[12]
The Steps Towards Green Financing
Since the year 2008 institutions such as the World Bank have played a significant role in providing green bonds. The World Bank alone has issued $14.4 billion in green bonds. These funds have supported one-hundred and eleven (111) projects all over the world, with a focus on sustainable transportation (27%), agriculture and land use (15%), and renewable energy and efficiency (33%).[13]
Interestingly, one of the foremost green financed project is the Rampur Hydropower Project, which was planned to supply low-carbon hydroelectric power to northern India’s electrical sector. As on date it is generating roughly 2 megawatts of power annually and avoiding 1.4 million tonnes of carbon emissions and this was financed by green bond issuances.[14]
The United Nations has a long term climate finance plan in place. It has an aim in mobilisation and scaling up of resources for climate finance coming from a wide range of sources, including alternative sources, both public and private, bilateral and international. The Conference of the Parties (COP) have decided on the following activities to be carried out through the year 2020 and further: the secretariat will organise annual in-session workshops; developed countries will provide information on methods and strategies for stepping up climate finance every two years; and a high-level ministerial dialogue on climate finance will be held every two years.[15]
The developed country parties to the Cancun Agreements in 2010 agreed to a target of jointly mobilising USD 100 billion per year by 2020 as mentioned above to meet the needs of developing countries, within the context of genuine mitigation steps and transparency on implementation. The parties agreed that before 2025, the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement shall define a new collective quantifiable target from a floor of USD 100 billion each year.[16]
In India, its Central Bank has suggested Regulated Entities (REs) to consider a taking into account a variety of quantitative and qualitative measures and techniques, according to the entity’s size, business activities, and complexity of business operations, to assess its exposure to financial risks resulting from climate change. The materiality of climate-related and environmental risk factors may be taken into account by the REs when setting the metrics for these risks, and issues with higher materiality may be prioritised and monitored more closely.[17]
A New Ray of Hope
In continuance, the RBI in order to facilitate the target for green financing in India, through its discussion paper on Climate Risk and Sustainable Finance is seeking to encourage Regulated Entities (REs) to establish a voluntary funding target in order to increase green funding with the prior approval of their Boards. In addition, it has also suggested that the financial milestones should be reviewed annually to see its environmental impact directly.[18]
It has also stressed in making the banking processes more environment-friendly, by ensuring the REs convert their branches into ‘green’ branches, thus eliminating the use of paper and making the entire process paperless. Further it has proposed to convert data centres to green data centres by switching them to centres powered by renewable resources.[19]
However, another side to the green energy is about green waste. The solar panels and wind mills – which have out grown their shelf life are getting filling up landfills and in turn accumulating to a large amount of waste globally.
Therefore, the focus must not only be on green financing of renewable projects, however, on the proper re-use of these materials in order to achieve the real objective of climate aid.
*Jaibatruka Mohanta, Research Fellow, Centre for Environmental Law, Education, Research & Advocacy (CEERA), National Law School of India University (NLSIU), Bengaluru!
[1] Climate Change, World Health Organization, https://www.who.int/health-topics/climate-change#tab=tab_1 (last visited Nov. 03, 2022).
[2] Anees Suleman Mariyam, The Anatomy of Pakistan’s 2022 Floods, The Diplomat (Oct. 20, 2022), https://thediplomat.com/2022/10/the-anatomy-of-pakistans-2022-floods/.
[3] Sophie Yeo, Where Climate Cash is Flowing and Why it’s not Enough, Nature (Sept. 17, 2019), https://www.nature.com/articles/d41586-019-02712-3.
[4] Marina Romanello, et. al, The 2022 Report of the Lancet Countdown on Health and Climate Change: Health at the Mercy of Fossil Fuels, The Lancet (Oct. 25, 2022), https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(22)01540-9/fulltext.
[5] Reserve Bank of India, Discussion Paper on Climate Risk and Sustainable Finance, https://rbidocs.rbi.org.in/rdocs/Publications/PDFs/CLIMATERISK46CEE62999A4424BB731066765009961.PDF (last visited Nov. 03, 2022).
[6] India Meteorological Department, Ministry of Earth Sciences, Government of India, Annual Report (2020), https://mausam.imd.gov.in/imd_latest/contents/ar2020.pdf.
[7] For a Few Dollars More!: The Immediate Need to Mitigate Natural Disasters in India that are now Becoming More of a Trend than a Black Swan Event, 46 SBI Research Ecowrap FY 22 (November 26, 2021), https://www.sbi.co.in/documents/13958/10990811/261121-Ecowrap_20211126.pdf.
[8] Sebastian Banthaiany et. al, Climate Models Predict Increasing Temperature Variability in Poor Countries, Science Advances (May 2, 2018), https://www.science.org/doi/10.1126/sciadv.aar5809.
[9] Climate Change Pledges by Rich Countries Represent Little New Money, Mongabay (Feb. 19, 2010), https://news.mongabay.com/2010/02/climate-change-pledges-by-rich-countries-represent-little-new-money/.
[10] Independent Expert Group on Climate Finance, Delivering on the $100 Billion Climate Finance Commitment and Transforming Climate Finance (2020), https://www.un.org/sites/un2.un.org/files/2020/12/100_billion_climate_finance_report.pdf.
[11] COP26 IPLC Forest Tenure Joint Donor Statement: Advancing Support for Indigenous Peoples’ and Local Communities’ Tenure Rights and their Forest Guardianship Glasgow COP 26, November 2021, UKCoP26 (Nov. 11, 2021), https://ukcop26.org/cop26-iplc-forest-tenure-joint-donor-statement/.
[12] Ravi Dutta Mishra, EMs Must Press for Climate Aid, Says G20 Business Forum Chief, LiveMint (Oct. 11, 2022), https://www.livemint.com/news/world/ems-must-press-for-climate-aid-says-g20-business-forum-chief-11665510395849.html.
[13] The World Bank, Impact Report 2020: Sustainable Development Bonds and Green Bonds 44-45 (2020), https://issuu.com/jlim5/docs/world-bank-ibrd-impact-report-2020.
[14] The World Bank, Impact Report 2020: Sustainable Development Bonds and Green Bonds 100-101 (2020), https://issuu.com/jlim5/docs/world-bank-ibrd-impact-report-2020.
[15] Introduction to Climate Finance, United Nations Climate Change Conference, https://unfccc.int/topics/introduction-to-climate-finance (last visited Nov. 03, 2022).
[16] Parties Serving as the Meeting of the Parties to the Paris Agreement (CMA), United Nations Climate Change https://unfccc.int/process/bodies/supreme-bodies/conference-of-the-parties-serving-as-the-meeting-of-the-parties-to-the-paris-agreement-cma (last visited Nov. 03, 2022).
[17] Id.
[18] Reserve Bank of India, Discussion Paper on Climate Risk and Sustainable Finance, https://rbidocs.rbi.org.in/rdocs/Publications/PDFs/CLIMATERISK46CEE62999A4424BB731066765009961.PDF (last visited Nov. 03, 2022).
[19] Id.
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