Inaugural Speech by Thiru. T.R. Baalu Hon'ble Minister of Environment and Forests, Government of India

Dr. A.C. Muthiah, President, FICCI, Dr. Maxine Olson, United Nations Resident Coordinator & Resident Representative, UNDP, Mr. Salil Singhal, Chairman, FICCI Environment Committee, Captains of Industry, Ladies and Gentlemen:

It is my proud privilege to be amongst you in this International Conference on Climate Change and the Financial Sector organised by FICCI. Given that emission reduction and energy efficiency are assuming a seminal role in policies and practices of the corporate sector, the timing of this conference is quite appropriate.

The Inter-governmental Panel on Climate Change in its Third Assessment Report confirmed that there is "new and stronger evidence that most of the warming observed over the last 50 years is attributable to human activities". Climate change is a highly complex problem, which has the potential to impact negatively on every sphere of life, if left unabated. The current scientific assessments suggest that the developing countries are likely to be more adversely affected as compared to the developed countries due to the impact of Climate Change.

India, following a planned approach to development, has subscribed to the twin objectives of socio-economic growth and sustainability. Various Indian initiatives in different sectors have contributed to de-linking economic growth from energy consumption and hence carbon emission. India's commitment to the United Nations Framework Convention on Climate Change is reflected in the various initiatives such as energy conservation, promotion of renewable energy, abatement of air pollution, afforestation and wasteland development. A sound environmental policy and law framework are also in place. Recent economic liberalization policies have seen new strides in technology upgradation, cleaner fuels, efficiency in production and environmentally sound practices. At the same time, Indian society's traditional respect for the ecology, rivers and nature remains as strongly rooted as ever in its quest for sustainable and climate friendly development.

India ratified the Convention in 1993. Last year, we took a step further by acceding to the Kyoto Protocol and were privileged to host the Eighth Conference of Parties to the Climate Convention which not only reposed our faith in multilateralism but also demonstrated our deep and continuing commitment to the cause of the global environment and sustainable development.

The agenda of this International Conference is broad based but its objectives are focused and well-defined. Platforms like this are useful for informal and frank exchange of views on further action against climate change. It is a commendable effort on the part of FICCI to bring together the financial community and the corporate sector to address climate change issues and the opportunities facing these two pillars of the Indian economy. Climate change poses a major risk to the global economy. It has the potential to put tremendous pressure on the financial sector. The financial sector's role is, therefore, very critical for the success of climate change abatement initiatives. It is not just the banks and financial institutions that can playa proactive role but the entire financial community, be it insurance companies, asset management firms, accounting firms, brokers, and others, even credit rating companies, are also required to participate in this initiative.

What is needed in the climate change sector is the cooperation amongst a wider range of actors, since the subject of climate change is all encompassing. Increasingly, there has been a paradigm shift in what constitutes technology
transfer. Formerly, there was a worldwide emphasis on large-scale import of technologies by developing countries. However, it has come to be acknowledged that this may not have been the most appropriate route. We must now look to newer modes of technology diffusion and transfer that will involve attitudinal shifts, policy reorientation, green credit, waste minimization and favourable international tems of trade.

Under the Kyoto Protocol, market based mechanisms are expected to play an increasing role. This is clearly seen in the case of implementation of Clean Development Mechanism projects, where the industry has started looking both inwards and outwards for production of clean energy with focus on renewable energy. These, I believe, are early signs of success for efficient generation and use of energy. With financial service sector supporting these initiatives, their adoption is likely to be accelerated.

The CDM has a significant potential to help developing countries like India address their sustainable development priorities. Though the Kyoto Protocol has not yet come into force, CDM activities around the world are moving from Policy to Implementation. The Marrakesh Accords call for a prompt start for the CDM and encourage small-scale renewable energy and energy efficient projects through fast-track procedures. There is a need to strengthen the capacity of Indian stakeholders to benefit from opportunities offered by the CDM. The financial sector should be aware and conscious of the opportunities available in the greenhouse gas mitigation and adaptation sectors and the fact that sustainable environment would make good business sense. Capacity building of financial institutions would provide the much-needed fillip to the financial community in term of awareness on climate change issues.

Since climate change is already underway, we need adaptation policies to complement mitigation policies. It is significant that the Delhi Declaration has accorded high priority to adaptation. This is underlined not only because adaptation is a critical component of the Convention but also because it is a pathway to sustainable development. In the same context, there is need for early operationalization of Special Climate Change Fund and the LDC-Fund as agreed at COP-8.

I urge FICCI to take the present conference initiative forward and build an interface of the corporate sector with the financial sector that would promote synergy and linkage between climate change and sustainable development. I am sure, the two-day deliberations will not only create better awareness on climate change concerns of the financial sector but would also come out with solutions and recommendations that would enable effective participation of these two
sectors.

I am sure the deliberations at this conference would be productive and leading to meaningful conclusions. I look forward to the recommendations of the conference and wish the very best for its success.

Before concluding, I would like to use this occasion to invite you all to the Climate Technology Bazaar and related conferences being hosted by the Government of India from 10 to 13 November 2003. This is an Indian initiative to Global response to combat Climate Change and a gateway for investors and recipients for clinching collaborative projects as well as a platform for promoting transfer of clean technologies.