Sustainability and Climate Change: India and the World

The Paris Agreement: a bottom-up departure from Kyoto

The Paris Agreement, adopted at the 21st Conference of Parties (COP 21) under the UNFCCC in December 2015, succeeded the Kyoto Protocol as the world's governing climate framework, and its defining structural difference from Kyoto is worth stating precisely. Kyoto imposed top-down, binding emission-reduction targets on a limited set of developed countries. Paris instead takes a bottom-up approach: every country submits its own Nationally Determined Contribution (NDC), a self-set national climate action plan, resubmitted and strengthened every five years, with the explicit expectation that each successive NDC represents a genuine progression beyond the last. The Agreement's central temperature goal is to hold the increase in global average temperature to well below 2°C above pre-industrial levels, while pursuing efforts to limit it further to 1.5°C. It is also explicitly built on the principle of CBDR-RC (Common But Differentiated Responsibilities and Respective Capabilities), recognising that countries carry different obligations depending on their own development level and historical contribution to emissions, and it commits developed countries to mobilise US$100 billion a year in climate finance for developing countries, with a new, higher collective goal to be set before 2025. A global stock-take, assessing collective progress against the Agreement's goals across all its elements, takes place every five years starting in 2023.

Sustainable Development Goals: India's own implementation track

The Sustainable Development Goals (SDGs), the successor framework to the Millennium Development Goals, are tracked in India through a dedicated national indicator framework developed by the Ministry of Statistics and Programme Implementation in coordination with central ministries and other stakeholders, with NITI Aayog playing the coordinating role of collecting, validating and documenting best practice across states and sectors as implementation proceeds.

Green finance versus climate finance: two genuinely different ideas

This chapter draws a distinction between two terms that are frequently, and wrongly, used as if they were interchangeable, and getting the difference precisely right is exactly what this chapter's own questions are built to test.

Green finance is the broader of the two terms, referring generally to financial investment flowing toward projects and initiatives that promote a more sustainable economy overall, clean energy, energy efficiency, green buildings, sustainable transport, water and waste management, and greening the banking and bond markets among the areas it commonly covers. The term has no single, universally agreed definition, and several different working definitions (China's Green Credit Guidelines, the Climate Bonds Taxonomy, the World Bank/IFC's Sustainability Framework, among others) currently coexist side by side rather than converging on one standard. India's own dedicated vehicle for this is the National Clean Energy Fund (NCEF), created in 2010-11 from a cess levied on coal production and imports, following the "polluter pays" principle, and used to finance clean-energy initiatives including the Jawaharlal Nehru National Solar Mission's solar installations; India's banks have also issued green bonds, with SEBI approving formal guidelines for them in 2016.

Climate finance is narrower and more specific: finance flows, chiefly from developed to developing countries, specifically earmarked for climate change adaptation and mitigation under the UNFCCC and Paris Agreement framework, tied directly to the US$100 billion annual goal already covered above. Climate finance's own defining problem is the reverse of green finance's: rather than having no definition at all, it has an unresolved, contested one, since the Paris Agreement itself does not define what counts as climate finance, and past attempts to estimate it (an OECD report on the 2013-14 period, for instance) have been criticised for double-counting, since they folded in the full value of multilateral development bank loans and general official development assistance (ODA) alongside genuine climate-specific spending, rather than counting only funds provided solely for climate purposes.

Quick revision points

• Paris Agreement (COP 21, December 2015, succeeded Kyoto Protocol): bottom-up, not top-down, built on each country's own Nationally Determined Contribution (NDC), resubmitted every five years with expected progression. Goal: well below 2°C, pursuing 1.5°C. Built on CBDR-RC. Commits developed countries to US$100 billion a year in climate finance, a higher goal to be set before 2025. Global stock-take every five years from 2023.
• SDGs in India: tracked via a national indicator framework (Ministry of Statistics and Programme Implementation, with central ministries), with NITI Aayog coordinating implementation, collecting and validating best practice across states.
• Green finance: a broad term (no single universal definition) for investment flowing toward sustainable-economy projects generally (clean energy, green buildings, sustainable transport, etc.). India's own vehicle: the National Clean Energy Fund (NCEF, 2010-11, funded by a coal cess under the polluter-pays principle); SEBI approved green bond guidelines in 2016.
• Climate finance: narrower, specifically finance for climate adaptation/mitigation flowing from developed to developing countries under UNFCCC/Paris, tied to the $100 billion goal. Its own problem is an unresolved definition, leading to double-counting in past estimates (MDB loans and general ODA folded in alongside genuinely climate-specific funds).