Annual climate finance needs are estimated to increase substantially, reaching well beyond $10 trillion by 2050, the Comptroller and Auditor General of India (CAG) Girish Chandra Murmu said on Tuesday. 

Any failure to meet these financial demands will exacerbate the rise in global temperatures, simultaneously intensifying socio-economic consequences of climate-related disasters, Murmu warned at a seminar on ‘Climate Financing’ in the Capital.

Unfortunately, despite the stark cost–benefit analysis, climate finance remains significantly inadequate, he added.

Climate finance is a catalyst for change, empowering nations, communities, and businesses to adopt green technologies, invest in renewable energy and foster sustainable practices. 

Noting that climate finance is a scarce resource, Murmu said such scarcity of finance requires development of a green finance ecosystem, including innovative financial instruments, green budgeting, targeted interventions, incentives and monitoring.

“As scarcity warrants optimal utilisation, this green finance needs to be combined with the Supreme Audit Institution’s (SAI) role of facilitating transparency and accountability”, Murmu said. 

Allocation of finance

SAIs with their mandate of stewards of public finance, have the responsibility and the opportunity to ensure that financial resources allocated to address climate change are used transparently, efficiently and effectively, he added.

Murmu said that SAIs need to evaluate the efficiency of financial mechanisms and scrutinise overall governance and decision-making processes involved in the broad spectrum of public sector climate financing. This is needed to ensure that these are accountable, participatory, and responsive to the needs of affected communities. 

The audits should bring out recommendations to ensure that investments deliver the intended environmental and social outcomes, and benefits reach the communities most vulnerable to climate change impacts, Murmu added.

CAG noted that India is committed to development choices along low carbon pathways, coupling socio-economic developmental goals with sustainability goals, as exemplified by the National Action Plan on Climate Change (NAPCC) 2008. The Delhi Metro Network’s reliance on solar energy illustrates implementation of these principles. 

The Delhi Metro meets 60 per cent of its daytime energy demand through solar power generated at the Ultra Mega Solar Park in Rewa, Madhya Pradesh. 

Although the third largest energy consuming country in the world, India stands 4th globally in renewable energy installed capacity (including Large Hydro). 

Low-carbon economy

The National Adaptation Fund for Climate Change and the National Clean Energy Fund, are instrumental in driving India’s transition towards a low-carbon economy.  Climate action must percolate to private sector also.  Similar initiatives are expected to be adopted by private sector which will prove to be a force multiplier.

Murmu said that SAI India has undertaken multiple audits related to environmental and climate issues in the country. Some of these audits include Compliance audit on Compensatory Afforestation in India; Performance audits on the Renewable Energy Sector in India; Environmental Clearance and post Clearance Monitoring; Ground Water Management and Regulation and Conservation of Coastal Ecosystems, etc.

However, accountability in climate finance presents unique challenges, and SAIs need tailored methodologies and risk assessment tools to evaluate the efficiency, effectiveness, and impact of climate finance initiatives. 

Impactful audits in this arena have to address multiple dimensions, focussing on outcome. “I am optimistic that over time, such audits would evolve and be followed by rigorous introspection, critically assessing our achievements and shortcomings. This will help us work towards refining our strategies, strengthening our resources, and qualitatively improving our recommendations”, Murmu said.

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