DELIVERING PROMISES
Budgeting for Adaptation to Climate Change
Gyana Ranjan Panda, Programme, Officer Centre for Budget and Governance Accountability 3/1/2011 4:01:14 AM
It is now unequivocally established through global scientific assessment that climate change is “happening” and it is happening at brisk pace. India’s National Action Plan on Climate Change (NAPCC, 2008) maintains categorically that “Climate Change may alter the distribution and quality of India’s natural resources and adversely affect the livelihood of its people. With an economy closely tied to its natural resources base and climate-sensitive, sectors such as agriculture, water and forestry, it may face a major threat.” With around 72 percent of its population residing in rural areas and dependent on agriculture and allied activities, addressing the challenges is necessary to ensure food security and viable livelihood options for this vast majority of its population. Equally important is the preservation and management of natural resources, for instance the large scale Himalayan ecosystems which is the cradle of immense biodiversity and variety of wildlife; its glacial and river systems forming critical backbone for the human civilization of the plains of northern India. Protecting and preserving India’s huge coastline and island states is significantly crucial as the large section of its inhabitant extremely vulnerable to phenomenon like rise in sea level, cyclones or storm surges and other extreme weather conditions. Moreover a large section of the population depends for their livelihood on the marine ecosystems around the coasts, therefore conservation of these as well as allowing for sustainable exploitation is a major challenge.
The above concerns about degree of climate vulnerability to large sections of society make a stronger case for government ‘planned adaptation’ intervention. It is because reversing the wheel of carbon accumulation through mitigation measures takes considerable period of time. Therefore, adaptation is a natural choice of staying in and coping with the irreversible changes. Precisely, adaptation refers to coping strategies at national and local levels such as modifications in the behavior and responses of individuals to adapt to changes in their immediate natural and socio-economic systems due to climatic variability. Stern Report (2006) in particular has confirmed the proposition that “the benefits of strong, early action on climate change outweigh the costs”. As per IPCC (2007), adaptation is a well thought-out effective tool to address various impacts resulting from warming, already unavoidable due to bygone emissions and emerging emissions that go unchecked. Hence, emphasis is now more on government driven “planned” adaptation measures, policy framework and strategies, and subsequently its specific as well as larger implementation.
Copenhagen summit of Conference of Parties (CoP 15) following the footsteps of Bali Action Plan (BAP) has called upon the member countries to undertake various measures under broad head of ‘Enhanced Action on Adaptation’ which are followings:
- Planning, prioritizing and implementing adaptation actions in specific projects and programmes in the areas of water resources, health, agriculture and food security, infrastructure and settlement, ecosystems and Oceans and coastal zones.
- Impact, vulnerability and adaptation assessments, including assessments of financial needs as well as economic, social and environmental costs and benefits of adaptation options.
- Strengthening institutional capacities and promoting enabling environments for adaptation planning and implementation, including through the integration of adaptation actions into sectoral and national planning.
- Developing means to incentivize the implementation of adaptation actions and other ways to enable climate-resilient development and reduce the vulnerability.
- Building resilience of socio-economic and ecological systems through economic diversification and sustainable management of natural resources.
- Enhancing disaster risk reduction; early warning systems; risk assessment and management; and the establishment of risk sharing and transfer mechanisms and insurance schemes at local, national, subregional and regional levels to address loss and damage associated with climate change impacts in developing countries that are particularly vulnerable to the adverse effects of climate change.
- Research, development, deployment, transfer, diffusion and access to technologies and and capacity-building for adaptation; Strengthening data, information and knowledge systems, education and public awareness.
- Improving research and systematic observation for climate data collection, archiving, analysis and modelling for realistic climatic-related outputs at national and regional levels.
Government Policy Response on Adaptation in India
The government’s adaptation responses to climate change are two fold: responding through the existing developmental paradigm; and making some new programme interventions in the most vulnerable sectors. The 11th Plan, although shying away from making any specific commitments, has emphasised that development itself would be a crucial policy response on adaptation. Therefore, it emphasises that a strong economy with strong growth would be the core strategy for dealing with the challenges of climate change. Meanwhile, the National Action Plan on Climate Change (NAPCC, 2009) has proposed eight very specific missions1 to deal with the challenge. The stated objectives of the approach is to promote understanding of the issues of climate change, adaptation and mitigation, energy efficiency and natural resource conservation through active government intervention, public-private partnerships and civil society action as suited to individual mission objectives. The NAPCC has clearly identified eight different sectors which are vulnerable to climate change and require adaptation response in terms of government policy and provisioning. These sectors are a) Crop improvement, b) Drought proofing, c) Forestry, d) Water resources, e) Coastal regions, f) Health, g) Risk financing and h) Disaster management.
A predominant feature of the disclosures made in the policy document revolve around the necessity of intervention in the area of management and conservation of natural resources, up-scaling of ecosystem services and the necessity of reforms and innovative management practices at the interface of human beings with natural resources and ecosystems. For example, the Action Plan lays considerable emphasis on reduction in vulnerability in agricultural sector through development of climate-resistant crops, improvement of irrigation, better pest management and strengthening extension services and capacity building. Additionally, it also stresses on wasteland development, development of watershed and conservation of wetlands, forests and biodiversity. The existing areas of interventions listed focus on related issues like health improvement and disease control, protection of coastal areas, disaster mitigation and risk management. The Action Plan, in addition to the sectoral interventions, stresses on expansion of existing knowledge base and its dissemination through increased investments in research and innovation, monitoring and impact assessment.
However, the National Action Plan faces some serious lacuna. Firstly, although, the policy measures prescribed by the government spell out the ongoing and upcoming thrust areas for intervention, it stops short of distinguishing the linkages that ought to be present in each of the sectoral measures. For example, there is a distinct case for hyphenating interventions in sectors like agricultural sustainability, drought proofing and management of water resources. If one looks at agricultural sustainability, it is strongly dependent on the other two sectors. In this case, while shortage of water or long dry spells leading to crop loss is a specific sectoral issue and requires augmentation of irrigation measures; measures in general relating to drought proofing and management of water resources have multi-sectoral implications like betterment of drinking water supply leading to health improvements, prevention of desertification and wetland conservation in the context of forestry and biodiversity management. Although the Action Plan clusters each of the areas under a different mission or sectoral intervention in any given ministry, it does not explore the linkages between these sectors and possibilities of convergence.
Secondly, the Action Plan has largely overlooked three crucial aspects of development viz. food security, educational infrastructure and housing for the poor. It only makes a cursory reference to infrastructure on education and housing aspects in the section on ‘Disaster Management Response to Extreme Climate Events’. The section notes the necessity and cost-effectiveness of incorporating appropriate features in the initial design and construction of infrastructure projects and the necessity of insuring the existing infrastructure created under Sarva Shiksha Abhiyan (SSA), Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and Indira Awas Yojana (IAY).
Finally, the Action Plan falls short of detailing the required provisioning for holistic adaptation programmes. It only cursorily mentions the government expenditure on adaptation as 2.6 percent of GDP in 2006-07. The government estimation of expenditure on adaptation in India is composed of a collection of programmes/ schemes across sectors like poverty alleviation, crop improvement, drought proofing and flood control, health improvement and prevention of diseases, risk financing, disaster management and forest conservation. Of these sectors, all except poverty alleviation pertain to interventions in specific vulnerable sectors or areas of concern. NAPCC, in its discussion on the existing measures on adaptation has not elucidated the interventions on poverty alleviation, which it construes as adaptation, or its linkages with the other sectors. Moreover, the discussion on mission mode approach in NAPCC focuses on improvement in energy efficiency, ecosystem services and creation of knowledge networks and does not indicate how these measures will complement the existing interventions on improvement in human conditions.
Analysis of Adaptation Expenditure from the Union Budget
The CBGA-Oxfam India study (2009) provides alternative figures on adaptation expenditure in India at the union level. Contrary to government claims of 2.6 percent of GDP as of 2006-07, the study instead pegs the expenditure on adaptation in India at around 1.7 percent of GDP at market prices (1999-00 series) on the same financial year (RE). With the new GDP figures available (2004-05 series), the adaptation expenditure figure (as percent) of GDP is 1.64 percent of GDP. However, expenditure on adaptation by the government has increased at a rapid pace from 2006-07 at an average annual growth rate of 27 percent and is reported to be around 2.64 percent of GDP (1999-00 series) and 2.52 percent of GDP (2004-05 series) for the financial year 2010 -11(BE).
Likewise, adaptation expenditure as percent of total budgetary expenditure also reflects an increase over the last five years. Its share to total budgetary expenditure has increased from 12.1 percent in 2006-07 (RE) to 15.7 percent in 2010-11 (BE).
The overall costing of adaptation expenditure can be further classified into two sectors: expenditure towards the enhancement of human capabilities, and expenditures towards Natural Resources Management and Conservation. Various plan programmes/schemes relating to poverty alleviation; health improvement and disease control; and risk management through insurances, are oriented towards enhancing human capability to meet the challenges of climate vulnerability, while the second category, includes those programmes and schemes being implemented for the conservation and management of natural resource relating to agriculture and allied services, land development, drought proofing and flood control, water resources, forestry and biodiversity conservation, coastal, and marine resources management, and disaster management. The analysis of budgets 2010-11 (BE) reveals that outlays towards adaptation are heavily in favor of expenditure towards enhancing human capabilities. It constitutes more than 85 percent of total expenditure on adaptation to climate change (i.e. around 2.32 percent of GDP out of the total of 2.64 percent of GDP). Among those sectors which are significant in the adaptation provisioning is the expenditure relating to “poverty alleviation, livelihood and food security.” It constitutes 72 percent in the total adaptation spending. The existing budgetary allocation for improvement in ecosystem services and natural resources management and conservation is a meager 0.32 percent of GDP in 2010-11 (BE).
Expectations from Union Budgets 2011-12
1. Need to Prioritise Natural Resources Management in Budgetary Allocation
Many nodal administrative agencies which are crucial to the management of natural resources such as Ministry of Environment and Forest (MoEF), Ministry of Water Resources (MoWR), Department of Land Resources (DoLR) have not been given priority in fund allocation in the Union Budget. In the Union Budget 2010-11, the total budget for MoEF is 0.21% of total Union Budget outlays and 0.03% of GDP; MoWR Budget for the same financial year is 0.09% of Union Budget and 0.01% of GDP; and the Departmental Budget for DoLR is 0.24% of Union Budget and 0.03% of GDP in the same financial year. The three important ministries/departments with the core mandate of protecting and conservation of forestry and wildlife, bio-diversity and natural resources management, coastal management, water resources, flooding, and development of land resources including drought proofing have not been adequately prioritized in the developmental planning of the country. It is shocking to note that none of the ministries/departments at the union level have implemented any specific plan/programmes pertaining to Climate Change adaptation and mitigation. This reveals the problems of integrating the element of environmental sustainability in the 11th Five Year Plan and hence strengthens the need for comprehensive integration in the 12th Five Year Plan.
The lack of prioritisation and integration in planning also reflects inadequate sectoral allocation for the specific programmes, poor implementation, poor quality of spending, poor capacity of implementing agencies and above all poor outcomes. Crucial schemes like National Afforestation Programme (NAP), Integrated Forest Protection Scheme (currently known as Intensification of Forest Management), Biosphere Reserves Conservation Programme, Mangroves Eco-systems and Wetlands Conservation Programme, Natural Resources Management Programme, and Biodiversity Conservation Programme have not received adequate allocation. Less priority signifies less government intervention in ecological restoration and eco-developmental activities in the country. The Standing Committee Report on Demands for Grants (2010-11) of the MoEF highlighted that the MoEF in its Annual Plan 2010-11 proposed an outlay of Rs 1271.11 crores for new schemes/ components in the existing schemes.
However, due to resource constraint and priority accorded to completion of ongoing schemes, lower provisions have been made for them (some examples can be found in Table 2). Besides, it failed to secure people’s participation in planning and regeneration efforts to ensure sustainability and equitable distribution of forest products from the regenerated lands and in promoting partnerships in the management and administration of forests and common property resources. Such insignificant allocation hamper efforts to strengthen species conservation, creating basic infrastructure for management, habitat development, augmenting water resources, compensatory ameliorative measures for habitat restoration, eco-development, village relocation and use of technology for monitoring and evaluation.
2. Integration of Adaptation Planning in Bottom-up Planning Processes:
For effective adaptation, the union budget 2011-12 should make a departure by integrating approaches at the government and institutional level with bottom-up planning to capture variations in regional, national, and local knowledge. Empowerment of communities with regard to social and technological adaptation processes is also necessary. This will add to their knowledge and provide useful information for climate-poverty inter-linkages, vulnerability assessments, and last but not the least, access to good quality information about the impact of climate change at the local level. It will provide the base for early warning and information distribution systems and help anticipate and prevent disasters and any other imminent climatic changes. Here are some instances that provide dearth of local adaptation planning that require integration in the national planning.
Instance 1:
In Assam and Arunachal Pradesh, community build, owned and managed “Raised Earthen Flood Shelter” is an example of decentralised decision making in adaptation financing. It is a good practice and potential for scaling up because it is community owned and community manageable structure within the periphery of traditional practice which provides immediate shelter provisions for flood affected people along with their livestock and other household belongings; provides provision for continuing the emergency services viz. public health, schools, ICDS etc locally. The other potential factor for scaling up the “raised earthen flood shelter” because it provides opportunity for income generation to the flood affected through extending unskilled manual labour (earth works) on constructing the flood shelter. Such practices can be replicated in low lying areas of those states which are prone to unseasonal and heavy rainfalls and floods due to abrupt changes in the climatic conditions
Instance 2:
In Maharashtra, the establishment, management and maintenance of small weather stations/agro-me stations at the village level has enabled them to analyse locally the data for the ambient temperature, relative humidity, precipitation and wind speed. Though this is being implemented as pilot projects, however such adaptation projects would be extremely useful in the case of anticipating floods, managing water harvesting systems, micro-farming, etc.
3. Need for Constituting National Adaptation Fund:
The constitution of such a fund will provide dedicated finances to address the differential needs arising out of climate change, over and above the existing developmental interventions by the government. Such an initiative will enable the government to earmark and channelise dedicated financial resources to vulnerable sectors and strengthen the linkages that possibly exist between current interventions and the additional one’s being formulated. This can also help establish and finance a knowledge network for adaptation to climate change and provide technological assistance to local communities in vulnerable areas. This fund can be constituted under the auspices of the Planning Commission or Ministry of Finance as they exercise overarching authority across ministries and administrative divisions at the union level.
Concluding Remarks
Budget is a crucial policy document which reflects government’s future policy direction for the country. Climate Change is fast emerging as global problems whose impacts are already felt in the national growth trajectory and more importantly taking tolls upon the nation’s crusade against poverty and providing essentials services to the poor and downtrodden. It is clearly established that climate change hits the poorest the most and hence the government as custodian of public purse need to mainstream certain urgent adaptation policy decisions, sectorally and cross-sectorally, into national, sub-national and grassroots planning processes and allocate adequate provisioning to implement such adaptation programmatic intervention. The union budgets of bygone years have focused to augment economic growth trajectory devoid of climatic consideration. Time has come to make a rethink of these economic strategies as development without environmental sustainability will hamper, not help, the country’s economy in the long run.
End-notes
1 These eight national missions include a) National Solar Mission, b) National Mission for Enhanced Energy Efficiency, c) National Mission on Sustainable Habitat, d) National Water Mission, e) National Mission for Sustaining the Himalayan Ecosystems, f) National Mission for a Green India, g) National Mission for Sustainable Agriculture, h) National Mission on Strategic Knowledge for Climate Change. Out of all the eight missions, the first three missions pertain to developing alternative energy sources and improving energy efficiency to reduce emission of greenhouse gases into the atmosphere and thereby constitute initiatives for mitigation purposes. The remaining five national missions have specific components of adaptation into their objective or are wholly adaptation-specific.
References and Additional Thinking
Bali Action Plan (2007), Report of the Conference of the Parties on its thirteenth session, held in Bali from 3rd to 15th December 2007, United Nations Framework Convention on Climate Change (UNFCCC).
Central Statistical Organisation (2008), Compendium of Environmental Statistics in India, Government of India.
Economic Survey (2008-09), Ministry of Finance, Government of India.
Expenditure Budgets (Vol. 1&2) of Various Years, Union Budget Documents, Government of India.
Fourteenth Lok Sabha, (2008-09), “Impact of Global Climate Change on Agriculture and Allied Sectors in India”, 47th Report on Standing Committee on Agriculture, New Delhi: Parliament of India.
Ganguly, Kaushik & Panda, Gyana Ranjan (2009), Public Provisioning for Adaptation to Climate Change: An Analysis of the Union Budget for India for 2006-07, 2007-08 and 2008-09, (New Delhi: Oxfam India Trust)
Government of India Submission to UNFCCC on enhancing action on adaptation. Document is accessed on dated 21st October 2009, http://unfccc.int/files/na/application/pdf/indiaadaptation041208.pdf
India’s Initial National Communication to the United Nations Framework Convention on Climate Change (2004), Ministry of Environment and Forests, Government of India.
India’s Public Finance Statistics (2008), Ministry of Finance, Government of India.
Intergovernmental Panel on Climate Change (IPCC) (2007), Climate Change 2007: Impacts, Adaptation and Vulnerability: Contribution of Working Group II to the Fourth Assessment Report (Chapter 10), Cambridge : Cambridge University Press, UK.
Intergovernmental Panel on Climate Change (IPCC) (2007), Fourth Assessment Report, Cambridge : Cambridge University Press, UK.
Ministry of Environment & Forests (MoEF, 2007), India: Addressing Energy Security and Climate Change, Government of India.
National Action Plan on Climate Change (2008), Prime Minister’s Council on Climate Change, New Delhi: Government of India
Panda, Gyana Ranjan (2008), Climate Change and Food Security in India, Budget Track, Volume 6, Track 1, pp16-19.
Parikh, Jyoti K. and Parikh, Kirit. 2002, “Climate Change: India’s Perceptions, Positions, Policies and Possibilities,” Climate Change and Development, Paris: Organization for Economic Cooperation and Development.
Philander, S. George (Ed) (2008), Encyclopedia of Global Warming and Climate Change (Vol. 1-3), New Delhi: Sage Publications.
“The Stern Review: On the Economics of Climate Change” (2006) HM treasury, UK Government
UNFCCC (2007), Climate Change: Impacts, Vulnerability and Adaptation in Developing Countries, Bonn, Germany: Climate Change Secretariat (UNFCCC).
(Gyana Ranjan Panda joined CBGA in August 2007. He has a master’s degree in Political Science from Utkal University and an M. Phil in International Relations from Jawaharlal Nehru University. He had earlier worked with the National Centre for Educational Research and Training, doing research on various aspects of education. In CBGA, he has worked on research studies focusing on constraints in utilization of funds in the social sector and budgetary provisions for adaptation to climate change in India. He has led CBGA’s work on demystifying the budgets and budgetary processes in other South Asian countries. As a Programme Officer, he leads the organisation’s efforts pertaining to advocacy with Members of Parliament.
The views expressed in the write-up are personal and do not re?ect the official policy or position of the organization.)
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