Urgent Need for Climate Risk Framework & Adaptation Funding in India

New Delhi, Feb 21 (PTI) India is yet to create a common framework for evaluating risks due to climate change and a systematic methodology for ascertaining the extent to which development programmes address climate risk and vulnerability, according to a report released on Wednesday.

The report by Climate Policy Initiative -- a multi-national analysis and advisory organisation with expertise in finance and policy -- said the lack of a common framework for evaluating climate risks makes it hard to tell how development projects address these issues, and to track funding for adaptation measures.

Despite these challenges, it said, there is a growing push for climate adaptation action in India, leading to plans, policies and schemes at the national and state levels. However, the focus and progress vary among states.

The report, titled "Financing Adaptation in India", also highlighted the need for "significant" investment for adaptation (adjusting to the effects of climate change) in the country.

An analysis of state action plans for climate change shows six states -- Odisha, Tamil Nadu, Kerala, Haryana, Himachal Pradesh and Goa -- alone require USD 5.5 billion annually until 2030, Climate Policy Initiative researchers said.

While some states like Odisha and Tamil Nadu mention funding gaps, others hint at insufficient resources for adaptation efforts, citing barriers like limited funds, they said.

The report said states bear the primary responsibility for adaptation but economic challenges, exacerbated by the 2019-20 economic slowdown and the COVID-19 pandemic, limited their ability to invest.

"States also face borrowing constraints under new fiscal rules and pressure to reduce existing debt burdens, which further constrain their ability to bridge the adaptation funding gap," according to the report.

To address these challenges, the Climate Policy Initiative report recommended involving adaptation interventions in the criteria for distributing funds to states and introducing borrowing ceilings based on climate risks.

"This can help relatively more vulnerable states have access to increased finance," the Climate Policy Initiative suggested.

It also called for better green finance data to understand investment needs, track progress and ensure transparency.

High-quality data can help, among other things, increase transparency, which is critical to informing better decision-making.

"India's common framework for vulnerability assessments has paved the way for adaptation planning at the sub-national and local levels. The need of the hour is to establish a framework for physical risk assessment and introduce methodologies for categorising adaptation action to enable risk-informed decision-making and increase adaptation finance flows," said the report's co-author Uma Pal.

The introduction of a common methodology for categorising adaptation action is crucial for addressing the country's adaptation financing needs, she said.