What do you understand by "Climate Budgeting"? What are its advantages and status in India? Discuss.

Published: May 10, 2017

Climate budgeting refers to a policy by which the public funds can be aligned and mobilized for the purpose of national climate policy priorities. In simple words, this is a practice that will make an account of the budgetary measures that are taken by the country which will support climate change and related actions. This will mainly be a supplementary report to the main budget document and will contain the details of the amount of money India is investing annually in climate change.
Advantages of Climate Budgeting

  • Informed decisions- Climate budgeting helps a country to assess how much of its national budgetary expenditures go towards climate change and how much more is needed. Thus, the government by calculating this, makes an informed choice as to the additional resources that need to be put in and where funds has to be aligned.
  • Saving costs of climate protection- The countries, often under pressure from the international forum have to increase their expenditure on environmental protection as a sudden step. This increases the cost to be borne by the country, especially a developing country. Budgeting by keeping the government alert about the infrastructure requirement and by adopting measures on a regular basis, reduces this sudden liability imposed on countries.

Position of India vis-à-vis Climate Budgeting
India does not have a climate budgeting mechanism in place until this financial year. However, after attracting a lot of criticisms from the other nations due to the low expenditure on climate based policies, India has decided to come up with its own climate budgeting. With the gradual change in leadership in the developed countries, it has been realized that India could no longer depend on these nations for financing its climate policies. This calls for a robust step to be taken by the nation itself.
But India has not been able to start this from the budget of 2016-17 due to certain issues like lack of proper research and methodology as to how the fund is to be allocated for climate policies. So, finance ministry is first going to finance a status paper to build a roadmap of the best methodology that could be adopted for the ministries to follow.

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