Five Reasons Why Indian Cities Need Climate Budgets


Mumbai has recently launched its first “Climate Budget”, bringing the spotlight back on cities’ role in achieving Net Zero targets. Here is everything to know about climate budgeting and how Indian cities can benefit from it.



Cities and urban areas are considered as some of the most vibrant ecosystems worldwide. Housing about half of the global population, World Bank suggests that these economic powerhouses generate over 80% of the global GDP. However, they are also some of the largest polluters. Estimates by the UNEP suggest that cities are responsible for 70% of the global carbon dioxide (CO2) emissions. Making cities are an integral part of the fight against climate change. In this light city-level climate action takes center stage in limiting temperature rise to the 1.5°C target of the Paris Agreement.

Initiatives such as the C40 aim to galvanize city-level climate action to promote emissions reductions and resilience building. Under this initiative, the Climate Budgeting Programme helps cities mainstream climate in their governance and financial decisions. Recently, Mumbai has become the first Indian city to release a climate budget. Under this, the Brihanmumbai Municipal Corporation (BMC) has ensured that the city-wide administrative machinery and financial resources are available to implement the Mumbai Climate Action Plan (MCAP).

Indian Cities and Climate Action

Indian cities are some of the world’s most densely populated urbanities and are highly vulnerable to impacts of climate change. While they are major contributors to global CO2 emissions, they are also highly vulnerable to the impacts of climate change. The residents of some of the largest urban conglomerates are already facing urban flooding, urban heat island effects, cyclones, harsher winters and increased frequency and intensity of extreme rainfall events during monsoons. A majority of Indian cities are located on the coast and face the threat of coastal flooding and erosion due to rising sea levels.

Beyond extreme weather events, the municipal machinery is under severe stress due to the impacts of climate change on public health, productivity and public infrastructure. These factors stunt the growth potential of cities. In this backdrop, empowering climate action at the urban local body level becomes crucial.

Tools such as Climate budgeting have proven useful in integrating climate targets from cities’ climate action plans into its mainstream governance structures. This enables climate action to be implemented, monitored, evaluated and reported across responsible functionaries in the city- wide administration.


Top Five Reasons for Indian Cities to Adopt Climate Budgets


  • Transforms Long-Term Goals to Short-Term Measurable Action:
    This approach helps break down the long term goals into short-term, funded and measurable actions. It is a useful tool to mainstream climate action into city’s annual administrative, budgeting and spending decisions.
  • Localize Climate Action: Indian cities are diverse in terms of their geographic features, micro-climatic conditions, demographic profiles and public infrastructure. As the climate budgets are designed by the urban local bodies, they allow the functionaries to tailor the climate action to meet the unique climate priorities of every city. These can be achieved by assigning different weightage to adaptation, mitigation and climate resilience, as per the local needs of cities. Additionally, it assigns responsibility, ensures transparency and accountability for climate action at the city level.
  • Decentralize Climate Action:
    Climate budgets allow cities to use their existing city administrative machinery to implement emission reduction plans. This ensures alignment of work undertaken by urban local bodies (ULB) with city specific climate action plans. For instance, synergies can be identified between various departments of ULBs with climate action, in the area of waste management, water supply, urban land-use planning, public transport, among others. This way routine ULB functions are better aligned to further city level climate resilience. Additionally, these budgets can allow for decentralization of funds, functions and functionaries and further empower local authorities to build resilience against climate vulnerabilities.
  • Mapping Progress:
    The decentralized approach adopted through climate budgeting helps map city’s progress on meeting its climate targets. Through a robust system of monitoring and evaluation, the city can strengthen its climate impact analysis and improve governance processes. This approach allows continuous monitoring and transparency in achieving goals and staying on track. It enables data-backed decision making for emissions reductions. Furthermore, it helps create feedback-loops for assessing efficiency of the interventions.
  • Collaborative Climate Action:
    The yearly review can help identify potential climate projects and interventions which can be cross financed through external financial mechanisms. These can expand the scope and scale of the projects and enhance technical expertise and coordination support.

The canvas for city-level climate action is vast. At Pune International Centre we have done extensive research under our Energy, Environment and Climate Change (EECC) program on city level climate action for Pune. Driving the agenda for reduction in GHG emissions, you can access EECC’s work on “Making PMR Net Carbon Neutral”. The EECC program has been instrumental in establishing India’s first of its kind “Carbon Neutrality Facilitation Cell” at the Pune Divisional Commissioner’s office. To know more about our work, you can visit our website PIC and EECC.

Written by Sanika Potnis.
The author is a Research Assistant at the Pune International Centre’s
Energy, Environment and Climate Change program.

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