( Key roles of the proposed Financial Institution(FI)- engage strategically with technology and innovation funding and financing, scale quantum of climate finance for the range of requirements, reset priorities for institutional support in consultation with IPCC and technologists, address global food security- scarcity and shortages, water and shelter; accelerate alternative technology/process solutions in compressing timelines of climate change for effectiveness; increase efficiency in deployment of human and financial resources according to current climate change (CC) crisis /priorities; deploy assistance to less developed and more vulnerable countries; consolidate global repository of knowledge, facilitate knowledge flows in Global south and two way flows between Global South and North, standardize  measures of impact and  design metrics for deployment priorities; assume advocacy role for additional sources of finance, enable- prevention of societal unrest, due to scarcities and shortages of basics -of food ,water, shelter, rising costs of living, inequalities .)

Current status-The Future went Yesterday, many say about the planet’s engagement with meeting CC impacts.  Both  rich and poor, developed and developing countries alike, are seeing  visitations of immense damage brought about by climate change. These adverse effects range from the reversible to the irreversible,  resulting in irretrievable loss as well as  the salvageable. (For instance, losses  of Vulnerable20 countries alone incurred due to CC impacts between  2000-219 are estimated at US$525 bn.). Across the world, as part of the varied global disaster response operations, are several organisations , corporations, laboratories, collaborative groups ,coalitions, local bodies, universities, institutions, alliances , sustainability start ups and regional and sectoral associations  engaged in  finding solutions/alternatives to avert these serious life and livelihood threats brought by CC. The efforts  on technologies to meet CC challenges are funded by a discrete sets of funds from public, institutional and private sources comprising of various types- grants, debt, equity. Add the ironies of our times where basic  requirements to sustain life-food, water and shelter are under threat even as we advance by leaps in science and technology. Due to our current CC crisis and attendant urgency, it is a moot point whether we can afford disaggregated efforts and a pace of an organic interactive evolution of technology and human needs, funded both by government and private investors that enabled innovations during the industrial and digital revolutions or in Silicon Valley and elsewhere. Hence an alternate institutional intervention, in addition, may perhaps be necessary. It is against this background, the need for an apex technology financial institution (FI) to prioritise, accelerate and fund/ finance technology/ innovation to address CC impacts, is placed. The Why and What follow.

1. Range of Technology Needs to meet CC impacts
2. Quantum of Climate Finance required
3. Technology and innovation funding and financing characteristics
4. Setting priorities for institutional support- immediate, Food Water and Shelter and allocation efficiencies.
5. Consolidation of Global Repository of Knowledge
6. Standardise CC impact indicators and devise additional decision making metrics.
7. Play advocacy role -for additional resources, support for the vulnerable and assume navigational leadership.
8. Role of existing global MFIs, DFIs and other constituents of the financial system

a).Range of Technology needs to meet CC impacts

CC impacts management requires technologies, processes and solutions for mitigation, adaptation, decarbonisation, net zero transitions. CC impacts are also of various urgencies-immediate emergencies, disasters and short term requiring different intervention strategies and resources. Then there are efforts on the horizontals including decarbonisation, carbon capture, up cycling, recycling and net zero driven technology and processes. So far, the sectors and action agendas deal with the ghg s originating / contributing sectors viz. energy, mobility, buildings, industry, transport, agriculture and forestry. Maybe it might be more expedient if we reorient  the lens to  look at protecting and regeneratingresources on terra firma,  our rivers and oceans and of course aer, the polluted.

b) Quantum of Climate Finance required

According to the Global Landscape of Climate Finance, (GLCF), December 2021, “Climate finance flows are nowhere near estimated needs, conservatively estimated at USD 4.5 – 5 trillion annually. To achieve the transition to a sustainable, net zero emissions and resilient world this decade, climate investment must increase drastically.” Further GLCF observes,an increase of at least 590% in annual climate finance is required to meet internationally agreed climate objectives by 2030 and to avoid the most dangerous impacts of climate change.The UNEP’s Adaptation Gap Report (UNEP, 2021) estimates that annual adaptation costs in developing economies will be in the range of USD 155 to USD 330 billion by 2030. Almost all the recommendations of the GLCF report of Dec.2021 on climate finance could probably be addressed by such a financial institution and more.

A FI would be better placed to leverage access to financial resources and deploy according to CC appropriate priorities. Also it would be able to raise resources with better efficiency and tap various types of capital such as ESG funds, impact capital and contemporary sources in addition to the usual categories of aid, grants, equity, and debt, hybrids, from public, private and third sector. New innovative networks are required too- including angel & venture capital apart from market and institutional sources. The deployment can also use various mechanisms say an International finance facility for CC adaptation technologies. or Specific Funds according to the vulnerability factor. E.g. a Fund for front line countries and towns, victims of sea level rise.

c) Technology and innovation funding and financing characteristics

Technology innovation financing/ funding is different from conventional financing of projects, infrastructure or other development programs. Technology/process innovation has different life cycles commencing from R&D to pilots to scaling to technology transfer, deployment and adaptation. This affects the evaluations of technology choices from both their relevance at a point in time as well as the commitment of human and financial resources.  The technical inputs from scientists, technologists and investors will be essential in this dynamic situation of CC.

d) Setting priorities for institutional support- immediate, Food Water and Shelter & Allocation efficiencies

Review of CC technologies priorities that are to be supported in consultation with the IPCC and scientists/technologists and practitioners, would meet both the critical needs as well as endeavor allocation efficiencies of human and financial resources. Priorities need to be calibrated according to the timeline of urgencies. Subsequent to the December 2021report, the CC impacts affecting agriculture and therefore food from both land and (fish) water, have been so pronounced that the urgency of interventions has increased even further. Extreme weather conditions, droughts are being witnessed across the developed world too- Europe, the USA, UK. A reordering of priorities of technologies for mitigation decarburization has acquired an increased urgency and the immediate need maybe for such an FI to focus not on the polluters alone (Energy, mobility, Buildings) but the polluted -land and water affecting agriculture, our breadbaskets, food and livelihoods. It would appear that Global food security, food scarcity (due to production factors) and shortages (due to market factors), water and shelter – basic needs, would come to occupy prime place in priority lists.

e) Consolidation of Global Repository of Knowledge

 The proposed FI could also spearhead the consolidation of knowledge  repositories and databases. There are many collaborative efforts on CC related technologies spanning various sectors, such as WIPO green, projects supported by the European Parliament , the apex  UNFCC ,UNEP, Climate vulnerable forum, Financial futures center and many other efforts at national and local community levels that are engaging the attention of practitioners and policy makers. A consolidation of best practices and solutions for different sectors and indigenous knowledge systems, accessible in a consolidated database may be useful and efficient.

f) Standardise and design new indicators to measure CC impact sensitivity.

In addition to standardizing CC Impact sensitivity, explore additional indicators to enable prioritization and allocation policies. The vulnerabilities index could be further fine-tuned to include say a ‘plimsoll line index’ (pun unintended) to decide intervention strategies..

g) The proposed institution will have the role of a leader in managing crisis, ordering of priorities, financing and enabling CC impact management. It would enable knowledge transfers, training e.g. indigenous knowledge in water management and agriculture practices.

h) Existing DFIs and para global MFIs have their hands full dealing with economic and financial stability and financing infrastructure and development projects/ programs in countries affected and bracing for CC impacts on various sectors of the economy. Also there will be areas where CC technologies would be an integral part of a development /economic activity, and would need support. In addition, economic sectors will have to adapt to the oil and climate transition shocks, CC induced migration and justice issues for nations to deal with, broadening the canvas of engagement of existing FIs and other players in time to come.

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair.”  Charles Dickens, A Tale of Two Cities,1859…!

Girijaa Upadhyay

(An economist with work experience in the intersectional space of development and finance and policy; currently teaches a masters level course on Development Finance at Pune, India.)

Email: girijau2@yahoo.com

August 22, 2022