Between Policies, Programs, and Projects: How Local Actors Steer Domestic Urban Climate Adaptation Finance in India

In light of the slow progress in mobilizing international finance for climate adaptation in developing countries, a growing body of research promotes the idea of pooling blended forms of climate finance to leverage limited financial flows and enhance domestic control over allocation and accountability. Yet the constraints imposed by weaknesses in existing urban public finance institutions complicates perspectives on climate finance that envision the smooth pooling of blended finance from multiple sources across multiple scales. This chapter presents the case of Surat in India to illustrate how city governments can sustain an innovative approach to local climate adaptation while switching between various sources of funding. In this chapter, we ask two research questions: How do local governments that wish to pursue climate adaptation, often outside a comprehensive planning framework, steer these efforts around the numerous institutional, operational, and political constraints at the local level? Second, when the pursuit of climate adaptation is supported by time-bound external funding sources, how do local governments sustain action while switching between different types of financial flows? In the case of Surat, we find that the city is beginning to intentionally draw on intergovernmental fiscal transfers and, increasingly, their own local revenue resources. Such an implementation pathway emerges from the local government’s ability to innovatively identify specific adaptation and development co-benefits and to exploit this with projects funded by existing and forthcoming streams of public revenue. Surat’s experience suggests that, in contrast to pooling, cities will have to strategically steer climate adaptation action around local fiscal constraints created by the different governance logics associated with policies, programs, and projects.