Consolidation and devolution of national climate finance: The case of India

National and international finance is increasingly becoming available in developing countries to address climate change for both mitigation and adaptation. However, existing (domestic) arrangements for climate finance are often dispersed and fragmentary, and lack clear goals and strategies, therefore allowing for neither efficiency nor accountability.

This ecbi Policy Brief by Anju Sharma, Benito Müller, and Pratim Roy examines the governance arrangements for climate finance in India, and proposes the creation of an Indian National Climate Fund to pool climate finance from different national and international sources, to channel it to the State and local levels.

The Fund should seek to 'consolidate without centralisation', and to devolve decision-making on the use of climate finance to local governments. In addition to defining a common vision and principles for climate finance, such a National Funding Entity should aim for coherence with national development goals strategies, and integration across sectors; distributive justice, to ensure that climate finance reaches those who need it most, and that their needs are prioritised; and a balance between different thematic areas (such as mitigation, adaptation, capacity building etc.). It should also review progress continuously, and make mid-course corrections where necessary.