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From $100 Billion to $1.3 Trillion
— But Where Is the Definition of Climate Finance?
Dear Shri Bhupender Yadavji :
A few days ago, Down to Earth carried an important report titled
“Baku-to-Belem Roadmap to $1.3 Trillion: Key Report on Climate Finance Released Ahead of Summit”.
It outlines an ambitious plan to mobilise US $1.3 trillion per year by 2035 for
developing nations to meet their climate obligations. The document is expected to
shape discussions leading up to COP 30 (Belem, Brazil) next year.
Two years ago, in my blog
— “Climate Finance Definition? A Rose by Any Other Name?”
— I had argued that before we chase trillions, we must first agree on what exactly
counts as climate finance. That question remains unanswered even today.
1. The Promise of the Roadmap
The new Roadmap proposes a five-pillar strategy — the “Five R’s”:
Replenish, Rechannel, Rebalance, Revamp and Reshape.
Its thematic focus areas span adaptation and loss & damage, nature and its
stewards, clean-energy transitions, agriculture and food systems, and just
transitions.
For the Global South, these are not abstract categories; they are lifelines. India’s
leadership in renewable energy, its vulnerability to climate shocks, and its central
role in the G-20 make this conversation both moral and strategic.
2. Where It Still Falls Short
Yet, beneath the fine prose, the gaps are striking.
The report itself concedes that while ambition has multiplied, new enforcement or
funding mechanisms are limited. It consolidates existing ideas but introduces few
truly innovative pathways.
More importantly, the definition of “climate finance” remains fuzzy.
Is a market-rate loan from a multilateral bank “climate finance”?
Do export-credit guarantees count?
Is it “new and additional,” or simply repackaged ODA?
Without clarity on these fundamentals, even $1.3 trillion can evaporate into
creative accounting and inflated spreadsheets.
3. My Earlier Proposal and Its Continuing Relevance
In my 2023 blog, I proposed that the first step toward trust is a common
definitional framework with clear categories:
-
Climate specificity (does the project directly reduce emissions or enhance resilience?)
-
New and additional flows (beyond existing aid budgets)
-
Concessional terms (not market-rate debt)
-
Predictable and reportable flows (publicly verifiable data).
I also floated a conceptual idea — a global “Climate Tax”, pegged to measurable
environmental harm or premature mortality from pollution, whose proceeds could
automatically flow to impacted developing countries.
That idea may have seemed utopian then, but the Roadmap’s admission that it
lacks enforceable revenue streams makes it more relevant than ever.
Before we can replenish or rechannel finance, we must define the currency of
responsibility itself.
4. Why India Must Act Now
India today is uniquely positioned — both victim and vanguard.
We are among the top recipients of adaptation needs and simultaneously one of
the few major economies still capable of rapid green growth.
If we do not shape the definition, others will.
If we do not demand accountability, funds will remain promises.
As we approach COP 30, India can:
-
Lead the call for a global definition of climate finance that distinguishes
between grants, concessional loans, guarantees, and private flows.
-
Propose a National Climate-Finance Framework — a domestic template
showing how India tracks, classifies, and reports climate inflows and
outflows.
-
Negotiate for more grants and fewer debts. Developing countries need
resilience, not repayment burdens.
-
Pilot innovative instruments — for example, a small domestic carbon-
harm levy, the proceeds of which could finance community-based adaptation
or clean-energy R&D.
-
Build a “South Ledger” — an open database of what has been pledged
versus what has been delivered to the Global South. Transparency itself can
become a diplomatic lever.
5. The Feasibility and the Future
Sceptics may say definitions won’t cool the planet. True — but they determine who
pays for cooling it.
When the Paris Agreement promised $100 billion per year, much of it never
materialised because nobody could agree on who owed what, to whom, and by
when.
The new Roadmap’s $1.3 trillion target will suffer the same fate unless nations like
India insist on definitional discipline.
Our diplomacy must therefore be both moral and mathematical:
moral — because climate justice demands accountability;
mathematical — because vague accounting turns justice into jargon.
6. A Modest Appeal
Hon’ble Shri Yadavji :
Before India’s delegation lands in Belem, may I suggest constituting an expert
working group — jointly from the Environment, Finance and External Affairs
ministries — to draft India’s official definition and classification framework for
climate finance.
This will give us the intellectual high ground and negotiation clarity that others
currently lack.
Let India not merely demand funds but also define what counts as climate finance.
Once that definition exists, both accountability and ambition will finally have a
solid floor.
With warm regards,
Hemen Parekh
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