Maarg Manthan · Topic 13.5

National Adaptation Fund for Climate Change

Current Affairs & Government Schemes › Environment and Climate Schemes · Topic 13.5

The National Adaptation Fund for Climate Change, or NAFCC, is a Central Sector scheme of the Ministry of Environment, Forest and Climate Change, set up in 2015 with an initial allocation of Rs 100 crore to fund concrete adaptation projects in States and Union Territories that are especially vulnerable to climate change. The National Bank for Agriculture and Rural Development, NABARD, is the National Implementing Entity and manages the projects. Funded sectors include agriculture, water, forestry, coastal areas, animal husbandry and disaster risk. The fund fills the gap left by other schemes that do not cover local adaptation costs.

5 min read · UPSC Prelims · Current Affairs & Government Schemes · Environment and Climate Schemes

At a Glance

Set up 2015
Ministry Environment, Forest and Climate Change
Initial allocation Rs 100 crore
Implementing entity NABARD
Type Central Sector Scheme
Exam link UPSC Prelims, Current Affairs and Government Schemes: Environment and Climate Schemes

Where Does It Fit?

This topic covers adaptation finance inside the macro on environment and climate. The National Action Plan on Climate Change, the first topic of this macro, sets the frame, and the fund pays for local projects that help communities cope with its effects. Previous topic: Green India Mission. Next topic: Nagar Van Yojana (Urban Forestry).

What Is NAFCC and How Does It Work?

Feature	Details
Set up	Established in 2015 by the Ministry of Environment, Forest and Climate Change, as a Central Sector Scheme
Purpose	Meet the cost of adaptation to climate change in States and Union Territories that are particularly vulnerable
Initial allocation	Rs 100 crore for 2015 to 2016 and 2016 to 2017, later increased through budget allocations
Implementing entity	NABARD, the National Bank for Agriculture and Rural Development, as the National Implementing Entity, which appraises projects and releases money
Approval	A Steering Committee chaired by the Secretary of the Ministry sanctions projects
Project type	Concrete, local adaptation projects that give clear benefits to communities and ecosystems

Which Sectors and Projects Does NAFCC Support?

Climate resilient agriculture: drought tolerant seeds, soil moisture conservation and efficient irrigation
Water resources: rainwater harvesting, recharge structures and water saving
Forestry and biodiversity: restoration of degraded forests and community forestry
Coastal protection: mangrove planting, shoreline protection and resilience of fishing communities
Animal husbandry and fisheries: climate resilient livestock practices and fishery support
Disaster risk reduction: local early warning and protection against floods and heat
Health and habitats: adaptation in human settlements and public health in some projects
Selection: States send proposals through their State Action Plans on Climate Change, and projects must be consistent with those plans

What Else Should You Remember?

Meaning of adaptation: adaptation means adjusting to current and expected climate effects, such as flood protection or drought tolerant crops, while mitigation means cutting emissions
Reported scale: as reported by the Ministry by 2021, about 30 projects worth about Rs 847 crore had been sanctioned in 27 States and Union Territories. Check later data
Project size: projects are small to medium in size, with a ceiling on the amount per project
Link with NAPCC: the fund supports the missions under the plan, as in National Action Plan on Climate Change (NAPCC)
Link with State plans: State Action Plans on Climate Change identify risks and priorities for projects
Difference from the Adaptation Fund: the Adaptation Fund under the UNFCCC and the Kyoto Protocol is an international fund, while NAFCC is a domestic fund. NABARD is also accredited to the international fund as a National Implementing Entity
Difference from Green Climate Fund: the Green Climate Fund is a large international fund under the UNFCCC, and NABARD has also been accredited as an entity for it
Gap in finance: India’s needs for adaptation run into lakhs of crores of rupees, and NAFCC is very small compared with them
Reporting issue: outcomes and benefits are not always tracked well, and independent evaluation is limited
Scaling problem: successful pilot projects often do not scale up because there is no clear route for replication
Link with forests: forest based adaptation works with the Green India Mission, as in Green India Mission
Vulnerable States: the scheme gives priority to vulnerable States such as those in the Himalayas, the North East, coastal belts and drought prone regions, using vulnerability assessments
Vulnerable groups: small farmers, fisher families and people in coastal and mountain areas are the main beneficiaries

Why Does It Matter for the Exam?

Basics: year, ministry and the Rs 100 crore starting allocation
Implementer: NABARD as the National Implementing Entity
Concept: adaptation versus mitigation
Comparisons: NAFCC versus the UNFCCC Adaptation Fund and the Green Climate Fund
Common errors: naming the Ministry of Finance as the nodal ministry, or saying NAFCC funds emission cuts

As an analytical point, adaptation is where Indian communities feel climate change first, yet it gets less money than mitigation. NAFCC proves the model at a small scale, and wider impact needs larger funds, better tracking and a route to scale up what works.

Why Is This Topic Important?

Basics Year and corpus
Entity NABARD role
Concept Adaptation finance

What Came Next?

The next topic covers urban forestry. Next topic: Nagar Van Yojana (Urban Forestry).

Key People and Terms

NAFCC National Adaptation Fund for Climate Change
NIE National Implementing Entity
NABARD National Bank for Agriculture and Rural Development
Adaptation Adjusting to climate effects
SAPCC State Action Plan on Climate Change
Steering Committee Body that sanctions projects

Exam Corner

Points to Remember

Set up 2015; initial Rs 100 crore.
Implementer: NABARD.
Type: Central Sector Scheme.
Purpose: adaptation, not mitigation.
Ministry: MoEFCC.

Do Not Confuse With

NAFCC and the UNFCCC Adaptation Fund A domestic fund versus an international fund
Adaptation and mitigation Coping with effects versus cutting emissions
NAFCC and NAPCC A fund versus a policy plan

Memory Hook

Adapt with NAFCC: Rs 100 crore, NABARD at the door.

Mains Angle

Questions ask why adaptation finance matters and how it should grow. These points give a balanced frame.

Benefits Local resilience, livelihood protection
Concerns Small size, weak tracking, no scaling
Way forward More funds, State plans, scaling routes

A Question You May Face

An original practice question, not a past paper question.

“Why is adaptation finance important for India, and how effective is the National Adaptation Fund for Climate Change?”

How to Answer

Need Local adaptation.
Tool NAFCC through NABARD.
Gaps Small size and tracking.
Way More funds and scale up.

GS Relevance

Prelims: set up year, implementing entity, scheme type, difference from the UNFCCC Adaptation Fund. GS Paper 3: climate adaptation, finance, vulnerability, agriculture and water.

Frequently Asked Questions

What is the National Adaptation Fund for Climate Change?

NAFCC is a Central Sector Scheme of the Ministry of Environment, Forest and Climate Change, set up in 2015 with an initial Rs 100 crore, to fund concrete adaptation projects in States and Union Territories that are vulnerable to climate change, in areas like agriculture, water, forestry and coastal protection.

Who implements NAFCC?

NABARD, the National Bank for Agriculture and Rural Development, is the National Implementing Entity for NAFCC. It appraises project proposals from States, releases money in stages and monitors work, while a Steering Committee chaired by the Secretary of the Environment Ministry sanctions the projects.

Which ministry runs NAFCC?

The Ministry of Environment, Forest and Climate Change runs NAFCC as a Central Sector Scheme, which means the Centre provides the funds directly. States prepare proposals in line with their State Action Plans on Climate Change, and NABARD helps in appraisal and monitoring.

How is NAFCC different from the Adaptation Fund under the UNFCCC?

NAFCC is an Indian domestic fund financed by the Central Government for projects in India. The Adaptation Fund under the UNFCCC and the Kyoto Protocol is an international fund that supports developing countries, and NABARD is accredited as an implementing entity for that fund as well.

What is the latest status of NAFCC?

As reported by the Ministry by 2021, about 30 projects worth about Rs 847 crore had been sanctioned across 27 States and Union Territories. The fund remains small compared with adaptation needs, so check the Ministry and NABARD for the latest sanctions and the status of the scheme.

PYQ Practice — Statement Analysis

1 NAFCC was set up in 2015.

True

The initial allocation was Rs 100 crore.

2 The National Implementing Entity for NAFCC is the Reserve Bank of India.

False

It is NABARD.

3 NAFCC funds adaptation projects.