India says climate finance is not an ‘investment goal’
(Source – The Hindu, International Edition – Page No. – 1, Page No. – 5 )
| Topic: GS2 – International Relations, GS3 – Environment |
| Context |
| ● At COP29 in Baku, India emphasised equitable climate finance, urging developed nations to fulfil their obligations under the Paris Agreement by mobilising $1.3 trillion annually until 2030.
● India also opposed unilateral trade measures like the EU’s CBAM, labelling them discriminatory and a hindrance to global cooperation. |
India’s Position on Climate Finance
- India emphasised that climate finance should not be viewed as “investment goals” by developed countries.
- It highlighted that the Paris Agreement mandates developed countries to provide and mobilise climate finance unidirectionally to support developing nations.
- India reiterated that $5-6.8 trillion of climate finance is required globally until 2030, as per ongoing discussions.
- A New Collective Quantified Goal on Climate Finance is under deliberation, aiming to replace the outdated $100 billion annual target set in 2009 for 2020-2025.
Focus of COP29: New Climate Finance Target
- The COP29 discussions are critical for establishing a new operational target by 2025 to support developing nations’ transition to renewable energy without hindering developmental progress.
- India, representing developing nations, stressed that developed countries must commit to mobilising $1.3 trillion annually till 2030 to address climate adaptation and transition needs.
India’s Stance on Unilateral Trade Measures
- India strongly opposed “protectionist” trade measures linked to carbon emissions, stating that they are discriminatory and violate principles of equity.
- Such measures, India argued, shift the financial burden of low-carbon transitions onto developing and low-income countries.
China-Led Petition Against Trade Restrictions
- A petition led by a grouping of major developing countries proposed a formal agenda item to address unilateral trade measures linked to climate change.
- These measures primarily target the European Union’s Carbon Border Adjustment Mechanism (CBAM), a tax on imports not meeting EU carbon norms.
| What is Carbon Border Adjustment Mechanism (CBAM)? |
| ● Purpose: The Carbon Border Adjustment Mechanism (CBAM) is a European Union proposal designed to impose a carbon tax on imported goods from countries with less stringent environmental regulations.
● Goal: It aims to prevent carbon leakage, ensuring that EU industries are not disadvantaged by stricter climate policies compared to foreign competitors. ● Products Affected: CBAM targets goods like cement, steel, aluminium, fertilisers, and electricity that are imported into the EU. ● Implementation: Currently in a transitional phase, CBAM will come into full effect on January 1, 2026. ● Controversy: The mechanism has faced criticism for being seen as a protectionist measure and discriminatory against developing nations, which might not have equivalent carbon policies. |
Key Concerns with CBAM
- India and other nations described CBAM-like policies as “arbitrary and unjustifiable unilateral measures”.
- These measures are seen as undermining multilateral cooperation on climate goals while disproportionately impacting developing countries.
| PYQ: Should the pursuit of carbon credit and the clean development mechanism set up under UNFCCC be maintained even though there has been a massive slide in the value of carbon credit? Discuss with respect to India’s energy needs for economic growth. (200 words/12.5m) (UPSC CSE (M) GS-3 2014) |
| Practice Question: Discuss the significance of equitable climate finance and the challenges posed by unilateral trade measures like the Carbon Border Adjustment Mechanism (CBAM) in fostering global cooperation for combating climate change. (250 Words /15 marks) |
