Accelerating Green Finance in India: Definitions and Beyond
India is ranked the fifth most vulnerable nation to the effects of climate change with 2.5-4.5% of its GDP at risk annually. As a result, India has pledged to reduce its carbon intensity by 33-35% by 2030 from its 2005 levels, but to achieve this target, India needs to mobilize a total of $2.5 trillion over 2016-30. However, climate-related investments—from public and private sources—remain limited. An upcoming study by CPI finds that India is mobilizing less than 25% of investment needed to reach this target. While India has adopted a number of fiscal and policy measures to address this challenge, increasing green investments at this scale will require a more intense focus of India’s financial system towards green sectors. There is a growing need to sensitize India’s financial sector to the importance and benefits of Green Finance.