Archive · 5 Aug 2025
Finance Commission Could Boost Climate Governance in India
The 16th Finance Commission, which decides how money is shared between the Indian government and states, could do more to help fight climate change.
The article suggests the commission should look at climate-related efforts, such as having a carbon accounting system to track emissions, similar to how we track money.
They propose changing how money is given to states based on how they are helping with the climate.
The author also suggests allowing states to tax activities that harm the environment and making sure money meant for clean energy is used for its intended purpose.
The goal is to encourage states to take action to help the environment and reach net-zero emission targets.
The 16th Finance Commission (FC) is urged to address climate governance in India, going beyond traditional tax devolution.
Suggestions include establishing carbon accounting authorities and modifying criteria for tax devolution related to forest cover.
The FC is encouraged to allow states to levy green taxes and redirect the clean energy cess towards climate initiatives.
A national carbon accounting (NCA) system is proposed to track carbon emissions and progress towards net-zero targets.
The author advocates for climate-responsive governance and suggests the FC prioritize climate and disaster proofing.
- Who
- The author, a former member of the Rajya Sabha, suggests changes for the Finance Commission.
- What
- Recommendations for the 16th Finance Commission to improve climate governance in India.
- When
- Recommendations are for the 16th Finance Commission.
- Where
- India
- Why
- To foster climate-responsive governance, improve climate-related funding, and track progress towards net-zero emissions.
- Commission Addressed
- 16th Finance Commission
- Key Suggestion
- Establish Carbon Accounting Authorities
- Goal
- Promote climate-responsive governance
- Criterion to Modify
- Forest Cover and Ecology
- Proposed Action
- Allow states to levy green taxes
- Current Issue
- Diversion of clean energy cess funds