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The 29th Conference of the Parties (COP29) of the United Nations Framework Convention on Climate Change (UNFCCC) has key climate finance issues at the top of its agenda.
Climate finance is a regional, national or transnational financing made from public, private and any other alternative sources of financing to support mitigation and adaptation actions to address climate change.
1992: UNFCCC Established
Green Climate Fund (GCF) |
It was the first such climate fund established in 2010 under the UNFCCC.It is the largest dedicated climate finance fund that supports low-emission and climate-resilient projects in developing countries.To obtain the financing under it the project proposals must be submitted through accredited entities.Accredited Entities are organizations which partner with the Green Climate Fund to implement GCF-financed projects. AEs can be private, public, non-governmental, sub-national, national, or regional. They work with countries to develop project ideas, submit funding proposals, and manage and monitor projects Example: GCF approved a $300 million project in Bangladesh for coastal climate resilience in 2019. |
Adaptation Fund (AF) |
It was established in 2001 under the United Nations Framework Convention on Climate Change (UNFCCC).It finances adaptation projects in vulnerable developing countries.It is governed by the Adaptation Fund Board and allows direct access for countries like Least Developed Countries (LDCs).Water management in Ethiopia and early warning systems for cyclones in Madagascar are notable projects. |
Climate Investment Funds (CIF) |
They were established in 2008 to finance pilot projects in developing countries. It provides financing for renewable energy, energy efficiency, and climate resilience.It has invested in solar power projects in India in Gujarat and energy efficiency improvements in Kenya's agriculture.It includes the Clean Technology Fund (CTF) and the Strategic Climate Fund (SCF).Clean Technology Fund (CTF) It supports financial resources to invest in clean technology projects in developing countries. The CTF focuses on low-carbon technologies with the potential to reduce greenhouse gas emissions, such as renewable energy, energy efficiency, and clean transport. Strategic Climate Fund (SCF) It provides dedicated funding to new pilot projects to address climate change challenges. It supports seven targeted programs that include the Forest Investment Program, Pilot Program for Climate Resilience, and Scaling Up Renewable Energy Program in Low-Income Countries |
Global Environment Facility (GEF) |
It was established before the 1992 Rio Earth Summit and includes 184 countries and international institutions, civil society organisations, and the private sector.It offers grants and concessional financing through programs like the Special Climate Change Fund and the Least Developed Countries Fund. |
Loss and Damage Fund (LDF) |
The fund was established at the 2022 UNFCCC Conference (COP27) held in Egypt.It is newly established under the UNFCCC to support countries facing irreversible and unavoidable climate impacts.It is overseen by a Governing Board and the World Bank serves as the interim trustee for four years. |
It was created in 2015 to cover the costs of climate change adaptation for India's Union Territories and States that are most at risk from its negative consequences.
It was established to support clean energy and was initially financed by a carbon tax on the industry's use of coal.
The Finance Secretary serves as the chairman of an Inter-Ministerial Group that oversees it.
Its mission is to finance the development of new clean energy technologies in both the fossil fuel and non-fossil fuel industries.
It was established in 2014 with a corpus of Rs. 100 crores to bridge the gap between the need and the availability of climate funds.
The fund operates under the Ministry of Environment, Forests, and Climate Change (MoEF&CC).
Important articles for reference
Green credit and Carbon credit
Evolution and Essentials of climate policy
Sources:
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PRACTICE QUESTION Q.Consider the following statements about Climate Investment Funds (CIF):
Which of the above statements are incorrect? A)1 and 2 only B)2 and 3 only C)1, 2 and 3 only D)None Ans: D Explanation: Statement 1 is correct: Climate Investment Funds (CIF) were established in 2008 to finance pilot projects in developing countries.It provides financing for renewable energy, energy efficiency, and climate resilience.It has invested in solar power projects in India in Gujarat and energy efficiency improvements in Kenya's agriculture.Statement 2 is correct:Fund includes the Clean Technology Fund (CTF) and the Strategic Climate Fund (SCF).Clean Technology Fund (CTF) It supports financial resources to invest in clean technology projects in developing countries. The CTF focuses on low-carbon technologies with the potential to reduce greenhouse gas emissions, such as renewable energy, energy efficiency, and clean transport. Strategic Climate Fund (SCF) It provides dedicated funding to new pilot projects to address climate change challenges. It supports seven targeted programs that include the Forest Investment Program, Pilot Program for Climate Resilience, and Scaling Up Renewable Energy Program in Low-Income Countries. Statement 3 is correct: The World Bank is the Trustee of the CIFs, which works with most major multilateral development banks. |
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