Transforming Climate Perils into Financial Advantages for Emerging Nations
In a significant move, India's cabinet has approved the Jharia Master Plan, a hazard mitigation programme in Jharia, India, with an estimated cost of approximately £511m (or $692m). This plan, which includes social infrastructure, resettlement, skills development, and land-use management as measures to manage environmental risk, demonstrates a unique approach to climate action that often falls outside conventional climate finance frameworks.
The Jharia Master Plan, however, faces challenges in accessing conventional climate finance. The omission of carbon accounting in Jharia has fiscal and institutional consequences, preventing the intervention from accessing carbon markets and outcome-based finance. This is a common issue faced by non-traditional climate actions in developing countries, which include innovative renewable projects, indigenous agroecology, ecosystem-based adaptation, and community resilience strategies.
For instance, in Africa, countries like Namibia are pioneering green hydrogen production, but face hurdles such as water scarcity and ensuring local community benefits. Meanwhile, many African farmers are revitalizing indigenous agroecology practices, which typically lack inclusion in standard finance mechanisms.
Similarly, in the Caribbean, Barbados promotes resilience measures such as reinforcing home construction, sustainable land use, freshwater storage enhancements, and coral reef restoration. These ecosystem-based and local resilience initiatives often require flexible financing outside conventional frameworks.
To better integrate these climate actions into the international climate finance system, adaptations are needed. These include recognizing and funding indigenous knowledge and ecosystem-based adaptation alongside technological mitigation projects, expanding climate finance eligibility to support community-driven, locally led initiatives, and increasing grant-based, flexible funding and debt relief to lower-income countries.
The Jharia Master Plan, funded through public expenditure and led by national and state institutions, demonstrates that meaningful public investment can achieve emissions reduction and resilience through public administration, land governance, and institutional reform. This approach, while not commonly recognized within mainstream climate finance frameworks, is crucial for tackling climate risk in developing countries.
In Kenya, over 326,000 farmers have adopted improved agricultural practices through public initiatives, leading to an average 41% increase in yields across key value chains. In Ethiopia, rust-resistant wheat varieties have been developed, delivering productivity gains of up to 40% in targeted areas. These examples underscore the potential of public investment in climate action.
Recognizing and scaling such approaches will require a shift in how climate finance is designed and evaluated. This includes developing methodologies for quantifying avoided emissions in unconventional settings and funding mechanisms that reflect the time profiles of institutional reform. Institutional innovation, such as the development of local financial instruments aligned with climate goals in Rwanda, remains largely unrecognized within mainstream climate finance frameworks.
In conclusion, the Jharia Master Plan and similar initiatives in developing countries highlight the need for a more inclusive climate finance system. By recognizing and funding diverse knowledge systems and cooperation models, expanding grant-based, flexible funding, and supporting innovative financial tools, we can better address the complex climate challenges facing developing countries.
References: 1. [Source 1] 2. [Source 2] 3. [Source 3] 4. [Source 4]
- The Jharia Master Plan, despite being innovative in approach, struggles to access conventional climate finance due to the absence of carbon accounting, which poses fiscal and institutional challenges.
- Non-traditional climate actions in developing countries, such as renewable projects, indigenous agroecology, and community resilience strategies, often face similar hurdles in accessing climate finance.
- For example, green hydrogen production in Namibia encounters issues like water scarcity and ensuring local community benefits, while African farmers revitalizing indigenous agroecology practices typically lack finance support.
- In the Caribbean, Barbados' resilience initiatives like home reinforcement, sustainable land use, and coral reef restoration need flexible financing outside conventional frameworks.
- To integrate these non-conventional climate actions into the international climate finance system, adaptations are required, such as funding indigenous knowledge and ecosystem-based adaptation, expanding eligibility for climate finance, and increasing grant-based, flexible funding and debt relief for lower-income countries.
- The Jharia Master Plan, funded through public expenditure and led by national and state institutions, demonstrates that meaningful public investment can drive emissions reduction and resilience through public administration, land governance, and institutional reform.
- Public initiatives in Kenya have seen over 326,000 farmers adopt improved agricultural practices, resulting in an average 41% increase in yields, while Ethiopia's development of rust-resistant wheat varieties has delivered productivity gains of up to 40%.
- Recognizing and scaling such public investment approaches will necessitate a shift in climate finance design and evaluation, involving quantifying avoided emissions in unconventional settings and developing funding mechanisms reflecting the time profiles of institutional reform.
- Institutional innovation, like the development of local financial instruments aligned with climate goals in Rwanda, remains largely unrecognized within mainstream climate finance frameworks.
- In conclusion, a more inclusive climate finance system is needed, which recognizes and funds diverse knowledge systems, cooperative models, and innovative financial tools, to better address the complex climate challenges facing developing countries.
- References: [Source 1], [Source 2], [Source 3], [Source 4].
