Climate Finance

Climate finance does not go to countries where it is needed most, but goes where there is opportunity to make money.

About:

●    ‘Climate finance’ is a multifaceted concept. It generally refers to finance for activities aiming to mitigate or adapt to the impacts of climate change.

●    However, it is sometimes conflated with the related and overlapping concepts of green finance, sustainable finance, and low-carbon finance.

According to the United Nations Framework Convention on Climate Change (UNFCCC), the “Climate finance aims at reducing emissions and enhancing sinks of greenhouse gases and aims at reducing vulnerability of, and maintaining and increasing the resilience of, human and ecological systems to negative climate change impacts.”

 

Why is Climate Finance important?

●    It is abundantly clear that the world is being battered by extreme weather events because of climate change. It is also equally clear that the burden of these devastations is disproportionate — they hit the poor in the poorest countries hardest.

●    Climate finance is not just payment or reparations needed to mitigate and adapt to these disproportionate impacts of climate change. It is also about providing finances for the transition that these countries still need to develop. It is critical in enabling countries to transition towards low-carbon and climate-resilient economies and achieving the goals set out in the Paris Agreement.

●    They need to develop differently, so that they can grow without adding as much to the stock of emissions that will further jeopardise our common existence. This is why ‘climate justice’ — as enshrined in the 1992 UNFCCC — matters so much.

●    It was agreed that countries responsible for the stock of emissions in the atmosphere (historical polluters) would need to reduce emissions. It was also agreed that the rest of the world, which had the right to development, would be provided with the finance and technology to grow sustainably.

●    However, over the past 30 years, the world has convened countless conferences only with the intention of diluting and erasing this principle.

●    A report titled ‘Beyond Climate Finance’ made an argument that the nations of the Global South face financial handicaps which hinder their climate ambitions.

●    The cost of finance (interest rates) to set up a solar plant would be 2-5 per cent in Europe; 12-14 per cent in Brazil; and as high as 20 per cent in some African countries. This would make the plant unfeasible in Brazil and African countries where the cost of finance is high in comparison to other developed countries.

Why do we need a New Climate Finance Goal?

●    As per the Organisation for Economic Co-operation and Development (OECD), The developed countries provided $83.3 billion in 2020 out of the promised $100 billion per year.

●    Oxfam analyses figures related to climate finance may be misleading and inflated by as much as 225%, as ‘there is too much dishonest and shady reporting’.

●    Moreover, the $100 billion target set in 2009 was seen more as a political goal, since there was no effort to clarify the definition or source of ‘climate finance’.

New Collective Quantified Goals (NCQG): A commitment of ‘$100 billion per year till 2020’ to developing nations from developed countries was a target set at the Conference of Parties (COP) in 2009. But estimates since then show addressing climate change may cost billions, and even trillions of dollars. Therefore, the 2015 Paris Climate Agreement agreed on setting a New Collective Quantified Goal (NCGQ) for climate financing prior to 2025 with a view to setting a new global climate finance goal by 2025. The recently concluded Bonn Climate Conference in Germany was critical for reviewing and reforming the climate finance architecture. While funds available for climate finance have quantitatively increased, they are inaccessible, privately sourced, delayed and not reaching countries in need. The NCGQ is thus termed as the “most important climate goal”. It pulls up the ceiling on commitment from developed countries and is supposed to anchor the evolving needs and priorities of developing countries based on scientific evidence.

 

Conclusion:

●    Climate change is a global phenomenon which affects all countries equally. Therefore, the world does not need unilateral mechanisms, rather a collective effort supported by developed nations.

●    The Global rating system is designed to make countries fail. Today, the most vulnerable countries, which also need funding for climate mitigation, have a crushingly high debt burden—the money they pay in annual interest is as high as 16 per cent of their governmental revenue in 2023.

●    A report released at the COP27 highlighted that developing and emerging economies, other than China, will need $2 trillion per year by 2030 for energy transition, adaptation, sustainable agriculture and addressing global warming-related loss and damage to develop resilience against climate change.

●    The Bridgetown Agenda aimed at a proposal to unlock new money for concessional finance and highlights key action areas to build a more equitable and fit-for-purpose development finance architecture.

●    The bottom line is that climate finance can no longer be the money that goes to only increase the indebtedness of countries and makes them even more vulnerable to the next disaster.

Gramdan: A Community Ownership

Villages in the districts of Maharashtra and Assam, are fighting to become a gramdan village and trying to lose the category under the Maharashtra Gramdan Act, 1964 and Assam Gramdan Act in 2022 respectively.

About:

●    Gramdan is a village where all the land is owned jointly by its residents.

●    The residents of the Gramdan villages believe that land is not a private property but a collective resource that provides food and livelihood and should be saved and passed on to the next generation.

Timeline:

●    The concept of Gramdan is an expansion of Bhoodan — a movement for redistribution of land from big landowners to the landless, started by Vinoba Bhave in 1951.

●    Uttar Pradesh became the first state to pass a law on gramdan villages in 1962.

●    At Present, only seven states in the country — Uttar Pradesh, Andhra Pradesh, Bihar, Odisha, Rajasthan, Maharashtra and Tamil Nadu — have laws that allow setting up these village republics.

Basic features of Gramdan:

●    At least 75 percent of the landowners in the village surrender ownership of the land to the village community.

●    Such land should at least be 60 percent of the village land.

●    5 percent of the surrendered land is distributed to the landless in the village for cultivation.

●    Recipients of such land cannot transfer the same without the permission of the community.

●    Rest of it remains with the donors; they and their descendants can work on it and reap the benefits. But they cannot sell it outside the village or to anyone in the village who has not joined gramdan.

●    All the cultivators who have joined gramdan should contribute 2.5 percent of their income to the community.

Key differences with other villages Most of the gramdan states have a gramdan board that allocates funds to the gram sabhas — a village council of all its eligible voters — of its gramdans, unlike other villages, which are administered by the panchayat and revenue departments. For other administrative purposes, a gramdan functions like any village, under its own gram sabha.

 

Issues:

●    Limited spread of Gramdan: Seven states (Uttar Pradesh, Andhra Pradesh, Bihar, Odisha, Rajasthan, Maharashtra and Tamil Nadu) have laws to set up gramdan villages that have community land ownership. So far, only 3,660 villages have managed to become a gramdan.

●    Since the land is not in the name of an individual, one cannot use it to avail bank loans or to claim agricultural subsidies.

●    A major problem faced by gramdan village residents is denial of crop insurance, because the agricultural land was not registered with the name of the resident of Gramdan village. In such a scenario, many gramdan village residents want to sell their land, but cannot.

●    The concept of gramdan is losing relevance because of the disinclination of state governments to create such villages. And through amendments, the State governments have diluted the provisions of their gramdan laws over the years.

Case of Rajasthan: The many amendments to the Rajasthan Gramdan Act, 1971, have not only taken away the powers of gramdan villages, but also weakened the sentiment for its creation so much that many residents want the village to be declared as common villages. Case of Assam: Government of Assam repealed the Gramdan Act in 2022 by passing the Assam Land and Revenue Regulation (Amendment) Bill, purportedly to counter encroachment on donated lands. Gram sabhas in all the gramdan villages are almost inactive now.

 

However, Gramdans can be a great source of social and financial security.

Case of Seed village in Rajasthan:

The village became a Gramdan in 1980 and has a population of about 1,000. ‘Hare Bhare Gaon Ki Ore’, published by Centre for Science and Environment (CSE) in 1991, mentions Seed being the only village in the country to have a complete plan for the use of its land, and how its sustainable policies ensure availability of fodder for the village even during the drought of 1987.

There is a strong tide towards acquiring agricultural land and forestland. If gramdans are created, then land will be protected from any old or new laws of land acquisition.

PRELIMS FACTS

IUCN finds population decline for nearly half of species:                      

●    About 48 percent of the world's species are seeing a decline in population.

 

●    In 2022, the UN Intergovernmental Science – Policy Platform on Biodiversity and Ecosystem Services (IPBES) released its "Global Assessment Report on Biodiversity and Ecosystem Services", in which it said that 25 percent of the world's plant and animal species are at risk of extinction.

●    The International Union for Conservation of Nature (IUCN) says 28 percent of the world's species are threatened and it considers that nearly 33 percent of five species (mammals, birds, reptiles, amphibians, fish and insects) "safe" are seeing a decline.

●    The researchers also estimate that populations of 49 percent of species are stable, with another 3 percent recording an increase in numbers.

Extreme Climate: Floods batter drought hit Europe and Africa

●    Spain emerged from the driest spring in history, it saw heavy rainfall and flash floods. According to Spain's Meteorological Office, this year's summer in Spain is set to be the driest since 1961.

●    A similar trend of drought to flash flood was also seen in some countries that comprise the Horn of Africa (Djibouti, Eritrea, Ethiopia, and Somalia), which had prior to this downpour seen rainfalls fail for six consecutive years. The flash floods came at a time when the region of Horn of Africa was recovering from its worst drought in the last 40 years.