In its latest economic survey, India spotlights expenditure on climate adaptation and why rich countries must pay up, but in its budget the country stops short of making adaptation spending a priority
Rishabh Shrivastava
India’s latest economic survey released last Friday highlights the country’s climate vulnerability, its emissions and action plans. And it is critical reading particularly in the context of 2024 emerging as the hottest year in human history and the newly elected President of the United States Donald Trump once again moving the US out of the Paris Agreement.
Economic Survey 2024 states that India’s aim is to focus on building a National Adaptation Plan - the country’s adaptation expenditure has increased from 3.7% in 2016 to 5.6% in 2022 by mobilising domestic final resources as the “flow of international finance has remained grossly inadequate”, putting an unfair burden on India.
The survey criticizes the new climate finance deal for providing $ 300 billion annually that was reached at COP29 held in Baku in November 2024, saying that it goes against the principles of equity, fairness, and the established Paris Agreement. It notes that the country struggles to scale clean energy due to a lack of storage technologies and access to critical minerals, for which robust climate finance support is the way out.
At COP29, India’s Chandni Raina, Advisor with India’s Department of Economic Affairs, had sought much higher ambitions from rich nations.
“The Global South is being pushed to transit to no-carbon pathways even at the cost of our growth… other measures are being imposed by developed country parties to make this transition really not easy,” Raina had said in a fiery speech.
“This amount is a paltry sum and not something that will enable conducive climate action,” she had said.
India had a similar stance in the ongoing case at the International Case of Justice filed by the Pacific island nation Vanuatu, supported by other countries. During the hearing of this case, India argued that developing nations were the hardest hit by climate change, despite contributing the least to it. "If the contribution to degradation is unequal, the responsibility must also be unequal," Luther M. Rangreji, Joint Secretary in the Ministry of External Affairs (MEA) had said.
The economic survey reiterates these points. The survey notes that all the G7 countries continue to rely heavily on fossil fuels for almost the last six decades - calling it a classic case of “friction between energy security and energy transition”. Ensuring stable supply and containing the rise in power prices has made the adoption of renewable energy patchy for rich countries, marks the survey.
The Migration Story has in these columns earlier analysed India’s own dependence on coal for energy security even as it builds its green energy capacity.
The survey continues to endorse the use of coal and notes that most of the countries like the US and the UK used coal to achieve industrialization and development for a long period. Moreover, these countries continue to approve large-scale oil and gas projects as well, while wanting developing countries to take up the less efficient, costlier, and riskier options.
The survey highlights that abandoning coal-powered plants before their end of life would not be economically viable, as it would result in stranded investments without stable alternatives in place.
And yet, the survey notes how India has scaled new heights in its renewable energy capacity, meeting 46.8% of the country’s energy demand, with an aim to meet 50% of the total energy requirement by 2030.
It cites schemes like PM Surya Ghar Muft Bijli Yojana and the New Solar Power Scheme (for Tribal and PVTG Habitations/Villages) and Scheme for the Development of Solar Parks and Ultra-mega Solar Power Projects for having played a major role in advancing the green energy targets for India.
Adaptation versus Mitigation
India argues for the need of more funding for adaptation vis-a-vis mitigation.
But first, let’s understand the difference between the two:
The European Environment Agency (EEA) describes adaptation as “taking appropriate action to prevent or minimise the damage” climate change can cause. Examples of adaptation may range from individuals reducing their exposure to high temperatures to large-scale efforts such as building defences to protect against sea level rise, it notes.
“In essence, adaptation can be understood as the process of adjusting to the current and future effects of climate change.”
Mitigation, on the other hand, means efforts to reduce greenhouse gas emissions being emitted into the atmosphere, examples of which include using non fossil fuel sources of energy such as solar and wind, switching to electric vehicles, increasing forest cover and so on.
According to an analysis by the Climate Policy Initiative, the ratio of funding for climate adaptation to mitigation stands at 1:8, at INR 37,000 crore per year and INR 3,09,000 crore per year respectively for 2019. In the same year, 94% of the adaptation-based funding was mobilized by domestic resources while the remaining 6% was from international sources. Also, the last year’s budget made provisions to support mitigation strategies, while making only indirect references to adaptation.
India released its first climate adaptation plan in 2008 - called the National Action Plan on Climate Change. This action plan comprised eight national missions ranging from solar to sustainable agriculture. And In 2015, the country set up the National Adaptation Fund for Climate Change (NAFCC) to meet the cost of adaptation to climate change for the State and Union Territories of India that are particularly vulnerable to the adverse effects of climate change. This year’s Economic Survey placed paramount importance on adaptation funding in India - by proposing to create a National Adaptation Plan.
But the allocation for the NAFCC fell from Rs 118 crore in 2015 to Rs 20.94 crore in 2022-23, to zero in 2023-24 and 2024-25 - noted policy researcher Evita Rodrigues in her analysis for Article 14.
“These moves come alongside estimations that 14 million Indians were displaced due to climatic and environmental disruptions; a number that is predicted to grow more than three times to 45 million by 2050,” she wrote.
She further noted: In India, state governments are key players on climate adaptation, with several vulnerable sectors like water resources, land and public health falling under state purview. With India’s national adaptation financing lacking a dedicated fund for addressing climate mobility, whether slow-onset or sudden-onset, this responsibility seems to fall on state governments with limited capacity.
The focus on adaptation notwithstanding, the budget fell short of making the actual allocations.
During the launch of the budget, V. Anantha Nageswaran, Chief Economic Advisor advocated for adaptation funding rather than focus on mitigation strategies. But the budget once again prioritized the spending on mitigation measures like scaling solar energy and investing in the National Green Hydrogen mission.
This had analysts flummoxed. Ecological economist Nilanjan Ghosh was quoted in Down to Earth magazine saying: “After the economic review highlighting the need to focus on climate adaptation yesterday, we expected greater fund support in the area”.
Campaigners said even the focus on some priority areas such as agriculture will yield no gains if there was no finance for measures to improve climate resilience.
"While the Budget acknowledges the need to boost agricultural production and resilience, it falls short where it matters most—adaptation funding. Without real investment in climate adaptation, farmers will be left defenceless against increasingly erratic and extreme weather. The livelihoods of millions are at serious risk, and without urgent action, our food systems and rural communities will bear the brunt of the climate crisis,” said climate campaigner Harjeet Singh and founder of nonprofit Satat Sampada Climate Foundation in a post on the social media platform, LinkedIn.
Rising Risks
Experts point at the risks associated with lack of clear-cut funding for adaptation measures. Mangroves, for examples, are at high risk. India lost 40% of its mangrove cover during the last century. For example, Kerala lost 95% of its mangroves in the last three decades, according to a study published in Regional Studies in Marine Science Journal.
“If you consider highly vulnerable areas like the Sunderbans, which depend almost solely on adaptation, the gap is much bigger. A ballpark assessment is that the climate financial need for the Sunderbans is about three times greater than the GDP of the island region with a population of close to five million,” says Ecological economist Nilanjan Ghosh while speaking with The Telegraph.
The economic survey lists multiple measures the government has undertaken.
Atal Mission for Rejuvenation and Urban Transformation (AMRUT), for example, is one of the flagship urban development schemes for rejuvenating water bodies, creating green spaces, and transforming public transport systems. The survey also highlights AMRUT’s role in enhancing the capacity of cities to recycle wastewater and manage sewage.
It states that cities are at the forefront of the climate crisis, facing severe challenges such as heat stress, groundwater depletion, and urban floods and that sustainable development and climate actions have become integral to urban investments through various missions and programs after 2015.
For strengthening the adaptation in coastal areas, the survey suggests plantation and maintenance of mangrove forests. The ‘Mangrove Initiative for Shoreline Habitats & Tangible Incomes (MISHTI)’ which was introduced in the Union Budget for 2023-24, can play a major role in protecting coastlines by promoting and conserving mangroves, notes the survey.
MISHTI also provides employment opportunities to coastal communities by enhancing sustainable livelihood options and improving the support and services the mangrove ecosystem provides to the community and the economy, according to the survey.
With additional reporting from The Migration Story
Rishabh is a lawyer and researcher working on issues of law, policy and development.
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