NEW DELHI: Amid the US tariff war and its exit from the Paris Agreement, a group of European climate envoys met their Indian counterparts to discuss how to mobilise climate funding through private investment and keep the multilateral climate treaty alive.
“Our discussions focused on how to keep the Paris Agreement functional and viable for all of us, rather than abandoning it,” said Anthony Agotha, EU Special Envoy for Climate and Environment at the European External Action Service (EEAS).
During their three-day visit from April 2 to 4, the climate envoys from Denmark, Germany, the Netherlands, Sweden, and the EEAS expressed concerns about the significant gap in climate mitigation funding in the wake of by the US withdrawal from the climate treaty.
The envoys sought to engage their Indian counterparts to facilitate private investment in energy transition and address the funding gap. Countries in the Global South have estimated a requirement of $1.3 trillion in climate finance to support the nationally determined contributions (NDCs) of developing countries.
So far, developed countries have proposed $300 billion per year by 2035 under the New Collective Quantified Goal on Climate Finance, which falls far short of what is needed.
When asked whether the inadequate climate funds have created a trust deficit between developed and developing nations, the climate envoys noted that funds should be channeled through market mechanisms.
Gerhard Schlaudraff, Deputy Envoy for International Climate Action in Germany, said developed countries have raised their contributions from $100 billion to $300 billion, and the remaining funds should come from market channels.
“There are $200 trillion in private capital globally, and we need to source the remaining $1 trillion from there,” Gerhard explained. “The demand for $1.3 trillion initially came from the G-77 countries, with India later leading this demand.”
The US, as the largest greenhouse gas emitter, has complicated fund generation by leaving the Paris Agreement. “How long can we maintain our contributions if the biggest polluter has left the treaty? We have to answer to our citizens as well. Meeting the climate funding targets has become increasingly complex,” Anthony Agotha remarked.
Asked about any discussions on the Carbon Border Adjustment Mechanism (CBAM), the envoys defended it as a climate-friendly policy. “The CBAM is a critical issue for us. We view it as neither punitive nor protectionist but rather as a climate-friendly policy. We aim to simplify it to assist importers and aid developing countries in their energy transitions,” Agotha said.
The EU’s CBAM policy seeks to address “carbon leakage” by imposing duties on imports of certain carbon-intensive goods. Amid buzz of reduce dependency on Russian gas, some EU countries, like the Netherland, may invest in nuclear energy programme.