‘Water Credits’ Can Fund Climate Needs
Water credits represent a fixed quantum of water that is conserved or generated and can be transacted between water deficit and water surplus entities within a sub-basin | Photo Credit: YAVUZSARIYILDIZ
The agenda for COP27 in Egypt this year, which began November 6, is set for targeting the critical question on climate finance. The negotiations can mark an important year for the Global South, given that these countries are the most vulnerable to climate change.
According to the World Bank, India bears losses worth $9.8 billion each year as a result of extreme events, with floods alone accounting for 50 per cent of the damages. In 2020, floods led to damages equivalent to 0.15 per cent of the country’s GDP in addition to thousands of lives being lost or impacted. With its updated Nationally Determined Contributions (NDC) this year, India has set targets on improving climate adaptation.
To achieve this, mobilising more finance from both domestic and international sources is a priority. However, this can be a major challenge because international support is skewed towards mitigation projects. Moreover, the modalities of financing mechanisms have seen a shift from grants to loans.
It is necessary to find alternative means of leveraging local financing opportunities to build resilience and continue the trajectory of growth despite the increasing uncertainties due to climate change.
From the private sector, CSR allocations can be reimagined as adaptation finance. In a study by KPMG, the top 100 companies in India in 2018-19 spent approximately $1.06 billion towards CSR initiatives.
Acknowledgements
Ishita Jalan and Mukta Deodhar for The Hindu business line.
The authors conducted this work when they were with the Centre for Social and Environmental Innovation at the Ashoka Trust for Research in Ecology and the Environment. WELL Labs is now taking forward this work in collaboration with ATREE.
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