National and international finance is increasingly becoming available to address climate change in India, for both mitigation and adaptation. However, the current arrangements for climate finance are dispersed and fragmentary, and lack clear goals and strategies therefore allowing for neither efficiency nor accountability.
In this paper, we propose the creation of an Indian National Climate Fund (INCF) to pool climate finance from different national and international sources, and channel it to the State and local levels.
The INCF should seek to consolidate without centralisation, and to devolve decision-making on the use of climate finance to local governments in keeping with India’s 73rd and 74th Constitutional Amendments. In addition to defining a common vision and principles for climate finance in India, it should aim for coherence with national development goals strategies, and integration across sectors; distributive justice, to ensure that climate finance reaches those who need it most, and that their needs are prioritised; and a balance between different thematic areas (such as mitigation, adaptation, capacity building etc). It should also review progress continuously, and make mid-course corrections where necessary.