Climate Change Innovation Programme INDIA@COP22 INDIA@COP22 Financing India’s State Action Plans for Climate Change: Experience from the Climate Change Innovation Programme Dr. Aditya V. Bahadur FRGS, Regional Programme Development Manager, ACT/CCIP

Today we will cover- • Quick overview of CCIP INDIA@COP22 Today we will cover- • Quick overview of CCIP Short background on SAPCCs SAPCC Financing Frameworks- Estimate L &D Assesing Effectiveness of Planned Actions Quantifying Current Efforts and Identifying Resources & Gaps Finding Finance Cross cutting insights, lessons and learnings Caveat- Manager, not a technical expert on climate finance + paper www.indiaatcop22.org

Climate Change Innovations Programme INDIA@COP22 Climate Change Innovations Programme 5 year UK-India programme on CC planning Working in Assam, Bihar, Chhattisgarh, Kerala, Maharashtra, Odisha Supporting states to improve management of climate finance Applying for climate funds Prioritised and realistic financing plans for SAPCC actions Identification of opportunities in the budget Sectoral and programme studies, especially in the agriculture/water sectors Knowledge management, planning systems www.indiaatcop22.org

State Action Plans on Climate Change INDIA@COP22 State Action Plans on Climate Change First State CC strategies/action plans Provide learning and awareness of importance of CC Vulnerability assessments 50 to 150 actions in 10 clusters Some work on costing Refinement Improve engagement in line departments Review the evidence on vulnerability (previously nat & reg studies being employed) Fill gaps and strengthen justification for actions Revise preliminary work on costing, including balance/phasing of expenditure Bringing in line with medium term expenditure framework Plan coordinated management of finances Before ACT states were working with national and regional evidence + ACT brought sectoral understanding. MTEF- total fiscal envelope www.indiaatcop22.org

SAPCC Financing Frameworks: Estimating L&D INDIA@COP22 SAPCC Financing Frameworks: Estimating L&D Estimating the economic impact of climate change on Gross Domestic Product (GDP) Based on: Exposure to CC & Sensitivity of sectors; many different methodologies climate change to reduce economic growth rate by between 1.4% and 4.3%per year of GDP by 2050 in the States reviewed Many methodologies for estimating L&D exist but three main categories- Use of broad assumptions, proxies and pre-existing measures of sensitivity GIS, risk and hazard probability models & statistical downscaling models Combined economic and biophysical and models www.indiaatcop22.org

SAPCC Financing Frameworks: Assessing Effectiveness of Planned Actions INDIA@COP22 SAPCC Financing Frameworks: Assessing Effectiveness of Planned Actions International Default Values for AD% Assessing effectiveness of adaptation actions- Cost Benefit Analysis Cost Effective Analysis Multi Criterion Analysis Risk Based Approaches Two main approaches- Benefits based approach Objectives based approach CCIP uses the former Change this slide so that we are not starting ‘prioritizing actions within SAPCC’. We look at more than only the plan to look at the budget also. CCIP CC relevance score derived from the benefits based approach. Total benefits reviewed and then see What would happen if the project happened in CC and what not www.indiaatcop22.org

SAPCC Financing Frameworks: Identifying current spending INDIA@COP22 SAPCC Financing Frameworks: Identifying current spending Reviewing past trends in climate expenditure Total adaptation expenditure can be estimated through an analysis of State expenditure, including both development and recurrent, usually at the level of schemes Selecting items that have some CC relevance and then weighting options for CC% percentage using a similar approach as the one identified on previous slide Undertake budget review+ identify line items related to climate change+ then weight it by CC www.indiaatcop22.org

SAPCC Financing Frameworks: Identifying future spending INDIA@COP22 SAPCC Financing Frameworks: Identifying future spending Five Year Financing Scenarios CCIP helping to identify low and high financing scenarios. Low: public expenditure/allocation remains constant+ some international climate finance High: public expenditure increases/ reallocation+ international climate finance disbursed more quickly Scenarios include medium term expenditure framework, international development funds; climate funds (national and international); and the private sector. High scenario www.indiaatcop22.org

SAPCC Financing Frameworks: Identifying the resource gap INDIA@COP22 SAPCC Financing Frameworks: Identifying the resource gap Resource gap for adaptation= difference between the adaptation needs and the adaptation supply. Example from Kerala- GDP of Kerala likely to grow 5X without CC but only 3X with CC Combined impact of existing and planned initiatives will likely stop about 13% of the loss and damage, adaptation gap = 87% www.indiaatcop22.org

SAPCC Financing Frameworks: Finding finance for implementation INDIA@COP22 SAPCC Financing Frameworks: Finding finance for implementation Domestic Budget Support Majority of climate finance in India comes from budgetary sources Private & Blended Funded Business continuity Business opportunity Business as stakeholder International Climate Funds Usually when there is a high degree of CC GEF, AF, ICF National Climate Funds NAF= 300 Crores www.indiaatcop22.org

SAPCC Financing Frameworks: Final thoughts INDIA@COP22 SAPCC Financing Frameworks: Final thoughts New financing instruments need to be introduced Standard guidelines needed Significant training and capacity building is required Moving towards a common approach Approach helps: i) national monitoring of CC actions; ii) MRV for NDCs; iii) mobilise private sector capital and capacities. www.indiaatcop22.org