Nov 22, 2024 07:09 PM IST
By prioritising inclusive climate finance mechanisms that cater to diverse economic contexts, the conference can demonstrate that climate action does not have to come at the expense of development
As the 29th Conference of Parties (CoP29) to the United Nations Framework Convention on Climate Change (UNFCCC) progresses, the global spotlight is once again on the importance of climate finance, particularly in sectors like agriculture, forestry, and other land use (AFOLU) and in emerging economies that bear a disproportionate burden of climate impacts. This year, our expectations extend beyond ambitious pledges to concrete actions on operationalising Article 6.4 of the Paris Agreement, which emphasises market mechanisms to support sustainable development and greenhouse gas mitigation. For countries like India, where the livelihoods of small and marginal farmers and forest-dependent communities are intricately tied to natural resources, the outcomes of COP29 could be transformative — especially if mechanisms are developed within the compliance market to empower these groups to benefit directly from climate finance.
The Energy and Resources Institute (TERI)’s work with the international voluntary carbon market, particularly in nature-based solutions (NbS), has highlighted the complexities and inconsistencies that persist in climate finance mechanisms. We have seen the potential of carbon finance to support both conservation and community development. However, the current lack of uniform standards in climate finance is a significant barrier to realising this potential. Clear, accessible standards are essential for bringing transparency and trust to the voluntary carbon market, especially if we are to channel meaningful investments into NbS projects that directly benefit local communities.
CoP29 offers a unique opportunity to address this issue by establishing mechanisms under Article 6.4 of the Paris Agreement, specifically designed to include smaller stakeholders in the compliance market. Such mechanisms would ensure that carbon market participation is within reach for small and marginal farmers, creating a pathway for them to benefit from climate finance. Hopefully, CoP29 will lead to clear, transparent standards that empower these communities, recognising their contributions to sustainable land use and conservation.
One of the critical issues facing India and similar countries is that conventional climate finance mechanisms often overlook the realities of smallholder farmers and forest-dependent communities. For millions of people across South Asia, agricultural and forest-based livelihoods are deeply interconnected with natural ecosystems. However, existing carbon market frameworks and standards often lack an inclusive outlook, making it challenging to incorporate the realities of fragmented small farmers and forest-dependent communities.
CoP29 must address this gap by introducing guidelines that recognise and support the participation of smaller stakeholders in climate finance. A standardised framework could be transformative, allowing smaller landowners and communities to benefit from carbon credits generated through agroforestry and reforestation projects. This could potentially unlock new revenue streams for farmers and communities dedicated to sustainable practices, creating a model where environmental benefits are matched by financial gains.
With the right support, NbS projects can yield significant financial benefits for communities engaged in conservation. From agroforestry initiatives that improve biodiversity to afforestation projects that restore degraded lands, the opportunities for impactful climate action are vast. The potential of these projects can be realised if CoP29 creates an enabling climate finance ecosystem. The expectation is of a finance architecture that channels resources equitably, ensuring that projects with genuine community involvement and ecological impact receive the recognition and support they deserve.
One of CoP29’s most important tasks is to reconcile climate action with the economic and development priorities of emerging economies. In many developing countries, sustainable development and poverty alleviation remain pressing goals, and it is essential that climate policies do not force trade-offs that compromise these objectives. India, for example, cannot afford to sideline its development agenda in the pursuit of climate goals shaped primarily by developed nations. Instead, we need climate finance mechanisms that support dual objectives — reducing emissions while promoting sustainable economic growth.
This is where CoP29 can make a lasting impact. By prioritising inclusive climate finance mechanisms that cater to diverse economic contexts, the conference can demonstrate that climate action does not have to come at the expense of development. Hopefully, the negotiators will establish policies that empower emerging economies to achieve climate resilience on their own terms, rather than imposing mandates that prioritise the agendas of wealthier countries.
Ultimately, CoP29 has the potential to reshape climate finance in ways that make it more effective, inclusive, and responsive to the real-world challenges of emerging economies. The outcomes will have profound implications for countries like India, where efforts to mitigate the climate crisis must be balanced with the immediate needs of our communities. COP29 has to set not only ambitious climate targets but also create practical pathways for achieving them — ensuring that climate finance becomes a tool for equitable progress rather than an exclusive privilege for the most developed nations.
As we look at the outcomes of CoP29, we hope to see frameworks that prioritise inclusivity, empower smallholders, and encourage sustainable land-use practices. By setting a road map that balances global climate goals with local development, CoP29 can make strides toward a fair and equitable transition to a low-carbon future, leaving no one behind.
Sayanta Ghosh is associate fellow, and Jitendra Vir Sharma is senior director, The Energy and Resources Institute (TERI). The views expressed are personal
Get Current Updates on…
See more
