Day-to-day multilateral negotiations remain an important issue of international policy. They have to pave the way for a global, formal and quantified agreement which is needed to fight climate change in the long run. But in actual terms, fighting climate change, both mitigation as well as adaptation, will rely on programmes initiated by governments, companies and civil society, which need to be intensified, whatever be the global framework. And today, India and the French Development Agency (AFD) are signing the first loans which are part of this effort.
India has the potential to lead. It published its National Action Plan on Climate Change (NAPCC) in 2008, signalling its dedication to promoting ecologically sustainable growth. The National Mission on Enhanced Energy Efficiency has just been launched. The stakes are particularly daunting, because climate change threatens the ability to sustain high and inclusive growth. Given these stakes, India is well placed to advance the empirical search for a green and inclusive growth trajectory and to help set the necessary international standards of environmental awareness.
There is also a clear challenge for international cooperation in effectively engaging the best minds, financial resources and technologies in implementing innovative solutions. There are numerous opportunities for India and its foreign partners to work together. Investments are blossoming and funds from international agencies can sustain and catalyse this movement and help reach out to potential actors of the fight against climate change. The French Government, through the AFD, has committed over two billion euros in support of its partners’ programmes and projects for climate change mitigation and adaptation in 2009, thus promoting reciprocal knowledge, stronger relations and shared know-how.
Since its opening in India in 2007, the AFD has developed a close working relationship with the Indian Government in the framework of the NAPCC. The first two projects passed by its board in 2009 provide a good example of how such cooperation between a bilateral donor and the Indian government can help speed up the transformation of the energy mix for growth and climate change mitigation. A subsidised line of credit of 70 million euros was opened for the benefit of the Indian Renewable Energy Development Agency (IREDA) in order to fund renewable energy projects (solar, biomass, etc), a recognised priority area in India's energy policy.
Another such ‘soft’ credit line of 50 million euros has also been granted to the Small Industry Development Bank of India (SIDBI) in order to spur investments by micro, small and medium enterprises (MSMEs) in energy efficiency. This shows how development cooperation can effectively support a public policy that focuses on demand management and energy efficiency by increasing credit leverage in a financial institution.
The first two instances highlight the potential for innovative financial solutions that foster effective public private partnerships and help engage a host of private actors and financial intermediaries in implementing public policies. New instruments and new ways of financing them will play a crucial role in the mobilisation of all actors behind climate change mitigation and adaptation as well as in the search for technical innovations. Other modes of cooperation can also be developed at the national level. In various instances, notably in Indonesia, in cooperation with the Japanese Government, the AFD has lent resources directly to the national budget to support sectoral policies aimed at climate change adaptation and mitigation. Through such programmes, a fruitful exchange takes place that also allows capacity building and mainstreaming climate change policies among all stakeholders and interested public ministries and agencies.
The international cooperation system is well placed to support climate-friendly, sustainable growth trajectories. It has become a network of networks, especially on environment and climate change issues, where all actors, from top to bottom and from all countries, add their piece to the puzzle. In this framework, bilateral development agencies have an important role to play because they can engage in an open and fruitful policy dialogue and mobilise financial and technical instruments through innovative approaches.
Such cooperation can also document and cross-fertilise practices by learning and financing the best. India and France have to learn from each other on climate change, notwithstanding the international political agenda. This is also one of the key aspects of our ongoing bilateral dialogue. It gives substance to and is translated into concrete actions in support of the fight against climate change. The AFD is committed to deepening its contribution through loans, technical assistance and sharing of experience.
The author is chief economist, French Development Agency
