Research area: Climate Policy

Ratcheting Ambition in Climate Finance: Key Challenges and Goals for COP29

Introduction

The 29th Conference of the Parties (COP29) to the United Nations Framework Convention on Climate Change (UNFCCC), scheduled to be held in Baku, Azerbaijan, in November 2024, presents another pivotal moment in global climate action. A key area of focus at COP29 will be the decision on a New Collective Quantified Goal (NCQG) for climate finance, which is meant to replace the 2009 pledge by developed countries to provide $100 billion annually to developing countries by 2020.

Seen as a key symbol of trust, transparency, and cooperation between developed and developing countries, the NCQG is a crucial lever for strengthening the shared responsibility and mutual commitment essential for tackling the climate crisis.

This issue brief provides an overview of key issues to watch in NCQG discussions, exploring the role and relevance of the NCQG, strategies for its effective implementation, and implications of the outcome for broader climate diplomacy. The brief is based on insights shared during SFC’s recent webinar, “Climate Finance at COP 29: What New, Collective, Quantified Ambition?”, held on October 28, 2024, which aimed to summarise and contextualise the current state of play in climate finance negotiations as COP29 approaches.

The speakers for this webinar were Joe Thwaites, Senior Advocate at the Natural Resources Defense Council (NRDC); Jonathan Beynon, Senior Policy Associate at the Center for Global Development (CGD); and Avantika Goswami, Programme Manager at the Centre for Science and Environment (CSE). The session was moderated by Aman Srivastava, Fellow and Coordinator, Climate Policy, at the Sustainable Futures Collaborative (SFC).

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The Regulatory and Market Landscape for Climate Finance Into India’s Renewable Energy Sector

Executive summary

India’s clean energy landscape has developed rapidly over the last decade, enabled by an improving policy and regulatory architecture. Nevertheless, challenges remain that have impacted the scale and direction of climate finance flows to this sector, particularly from international sources. As India aims to further ramp up the pace of its RE deployment, both large- and small-scale, this brief analyzes these challenges from regulatory, institutional mandate, coordination and market development angles, and explores ways to address them.

Based on a literature review and 13 expert interviews in the large scale renewable energy, rooftop solar, and energy efficiency sectors, we find that regulatory challenges are relatively minor in the large scale RE sector, and that this may cause international funders to channel finance accordingly. In other words, the established governance structure facilitates a relatively easy flow of climate finance. On the other hand, the small scale renewables and energy efficiency sectors have received comparatively less policy support, and a lack of awareness and scale contributes to considerably less funding flowing to these sectors.

Overall, while the government has an important role to play in continuing to improve the policy and regulatory environment for clean energy finance – including international flows into the country – there is an equal role for funders to adapt their funding processes and scopes to the domestic context. Harmonizing these parallel efforts will require improved coordination between the various actors, including through more defined processes for consultations within the overall institutional architecture for climate action in India.

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Climate Change: Policy, Institutional, and Legal Framework

Abstract

Transforming towards a low-carbon, climate-resilient society will require reimagining existing governance arrangements. This chapter in ‘The Oxford Handbook of Environmental and Natural Resources Law in India‘ documents how India’s policies, institutions, and legal structures have changed in response to climate change. These developments have been opportunistic in character, with policy changes preceding institutional development. Policies are many and widespread, therefore, but lack strategic coherence. A more deliberate approach would bring with it enhanced governance requirements, including new structures for coordination, deliberation, and strategy-setting. This chapter pays attention to the prospects for climate law in India in this context, discussing different approaches to constructing firmer legal foundations for climate action.

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