CLIMATE FINANCE (Syllabus: GS Paper 3 – Env and Eco)

Context: India has been a vocal advocate and leader among G20 nations in calling for urgent climate financing.

Climate Finance

• Definition: It refers to financial resources provided by developed countries to support climate mitigation and adaptation efforts in developing nations.
• Importance: of climate finance in addressing global climate change challenges and promoting sustainable development.
• Global Mechanism: The UNFCCC, Kyoto Protocol, and Paris Agreement call on Parties with larger financial resources (Developed Countries) to provide financial support to those who are less wealthy and more vulnerable (Developing Countries).

Global Financial Mechanisms

• Global Environmental Facility: The GEF, established on the eve of the 1992 Rio Earth Summit, is a catalyst for action on the environment. 
• Through its strategic investments, the GEF works with partners to tackle the planet's biggest environmental issues.
• Least Developed Countries Fund (LDCF): The Least Developed Countries Fund (LDCF) was established in 2001 to support a work programme to assist Least Developed Country Parties (LDCs) carry out, inter alia, the preparation and implementation of national adaptation programmes of action (NAPAs).
• The SCCF, or Special Climate Change Fund: It was created in 2001 to address the specific needs of developing countries under the UNFCCC to adapt to the impact of climate change and increase resilience. 

G20

• Origin: Formed in 1999 in the backdrop of the financial crisis of the late 1990s that hit East Asia and Southeast Asia in particular.
• Aim and objective: To secure global financial stability by involving middle-income countries.
• Members: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States and the EU.