Climate Financing Initiatives : Environment for UPSC Exams

Climate Financing Initiatives : Environment for UPSC Exams

Climate Financing Initiatives

  • Climate finance refers to local, national or transnational financing, which may be drawn from public, private and alternative sources of financing.

  • It is critical to addressing climate change because large-scale investments are required to significantly reduce emissions, notably in sectors that emit large quantities of greenhouse gases.

  • It is equally important for adaptation, for which significant financial resources will be similarly required to allow countries to adapt to the adverse effects and reduce the impacts of climate change.

Different types of climate finance initiatives:

  • Global Environment Facility (GEF) is a multilateral body of governments, civil society, banks etc. acting as a financial mechanism to environmental conventions like UNFCCC etc.

  • Green Climate Fund was created by UNFCCC in 2011 as an operating entity of financial mechanism of the UNFCCC.

  • Carbon taxes and cess by the national governments.

  • Clean Development Mechanism – It involves investment by developed countries in emission reduction projects in developing countries

  • Joint Implementation (JI) - JI enables developed countries to carry out emission reduction projects in other developed countries.

  • Perform Achieve Trade (PAT) - It is a market-based trading scheme under National Mission on Enhanced Energy Efficiency (NMEEE). It involves trading in energy efficiency certificates to offset emissions.

  • Climate Bond Initiative- It is an international, investor- focused not-for-profit organization It's the only organisation working to mobilize $100 trillion bond market for climate change solutions.

  • Green Bond- The capital for green bond is raised to fund ‘green’ projects like renewable energy, emission reductions etc. First Green Bond was issued by World Bank in 2007. There is no standard definition of green bonds as of now.

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