Paris Global Climate Financing Summit

Climate finance

• Climate finance is a broad term that can refer either to the role of finance in facilitating efforts to address climate change or to the obligations owed by richer nations to poorer ones.
• Climate finance is used to incentivize investment and development in renewable energy infrastructure, sustainable agriculture, or other adaptations to climate change.

Global Initiatives:

• Green Climate Fund (GCF): In 2010, member countries of the United Nations Framework Convention on Climate Change (UNFCCC) agreed to establish the Green Climate Fund (GCF) during the COP 16 summit. 
  • The GCF supports developing countries in their transition to low-emission and climate-resilient development. 
  • Headquarters: Incheon, Republic of Korea.
• Loss and Damages Fund: At the COP27 summit, delegates from the United Nations agreed to create a ‘Loss and Damages’ fund, which aims to compensate the most vulnerable countries for their losses resulting from climate-related disasters.

Initiatives in India:

• National Adaptation Fund for Climate Change (NAFCC): It was established in 2015 to provide financial support for climate change adaptation in Indian states and union territories that are particularly vulnerable to its adverse effects.
• National Clean Energy Fund: It was created in 2010 through the Finance Bill 2010-11. It is funded through a carbon tax on coal use by industries and is aimed at promoting clean energy. 
  • The fund supports research and development of clean energy technologies in both fossil fuel-based and non-fossil fuel-based sectors.
• The National Adaptation Fund: Established in 2014 with an initial corpus of Rs. 100 crores. 
  • It operates under the Ministry of Environment, Forests, and Climate Change (MoEF&CC) and aims to bridge the gap between the financial needs for adaptation and the available funds.