India’s need to triple climate investments to meet its targets

Source: The post India’s need to triple climate investments to meet its targets has been created, based on the article “India needs to triple green investments for meeting climate targets: Report” published in “Down to Earth” on 14th December 2024

UPSC Syllabus Topic: GS Paper 3-Environment

Context: The article discusses India’s need to triple climate investments to meet its targets. It highlights green finance progress, gaps in funding, and sector-wise trends. Most mitigation funds are private, while adaptation funds rely on public sources, especially government budgets.

What is India’s Climate Investment Need?

1. India requires Rs 16,250,000 crore ($2.5 trillion) by 2030 to achieve its Nationally Determined Contributions (NDCs). This means Rs 1,100,000 crore ($170 billion) annually is needed.
2. Adaptation alone demands Rs 8,560,000 crore ($1 trillion), or Rs 5,733,000 crore ($67 billion) annually from 2015 to 2030.

What is the Current Green Finance Status?

1. India invested Rs 425,300 crore in green finance during 2021-22.
2. Mitigation efforts received Rs 371,200 crore ($50 billion), a 20% increase from 2019-20.
3. Adaptation sectors received Rs 1,09,200 crore ($15 billion), a three-fold increase from 2019-20.
4. The CPI report, titled The Landscape of Green Finance in India, analyzed both public and private sources of green finance. 83% of mitigation finance was domestic, with the private sector contributing 66%.
5. International mitigation finance rose to 17%, with 66% from private sources, up from 40% in 2019-20.
6. Clean energy attracted 47% of mitigation funding, energy efficiency 35%, and clean transportation 18%.
7. Adaptation funds were 98% public, primarily from government budgets.

How is Adaptation Finance Sourced?

1. 98% of adaptation finance is from public domestic sources, primarily government budgets.
2. Farm adaptation activities saw negligible private funding, with less than 1% from private equity and venture capital.
3. International adaptation finance grew by 19% in 2021-22, with 92% from public sources.

Which Adaptation Sectors Received the Most Funds?

1. Disaster risk management: 42% of adaptation funds, with a ten-fold increase since 2019-20.
2. Flood and cyclone mitigation: 32% of funds.
3. Agricultural adaptation activities: 24%, with crop insurance taking 58%, mostly funded by public sources.

Question for practice:

Discuss the trends and sources of funding for climate adaptation and mitigation efforts in India.