‘India’s green financing needs 2.5% of GDP’

India’s green financing requirement is estimated to be at least 2.5 per cent of GDP annually till 2030, a Reserve Bank report said on Wednesday.

The country aims to achieve net zero emissions target by 2070. The Reserve Bank of India’s report on Currency and Finance (RCF) for the year 2022-23 covers four major dimensions of climate change to assess future challenges to sustainable high growth in India.

The areas are the unprecedented scale and pace of climate change; its macroeconomic effects; implications for financial stability; and policy options to mitigate climate risks.

The country’s goal of achieving the net zero target by 2070 would require an accelerated reduction in the energy intensity of GDP by around 5 per cent annually and a significant improvement in its energy-mix in favour of renewables to around 80 per cent by 2070-71, it said.

“India’s green financing requirement is estimated to be at least 2.5 per cent of GDP annually till 2030,” the report said.

According to the report, a balanced policy intervention with progress ensured across all policy levers will enable India to achieve its green transition targets by 2030, making the net zero goal by 2070 attainable. “Climate change is upon us”.

As per the World Meteorological Organisation (WMO), the 2015-22 period was the warmest on record.

Despite the cooling effects of La Nina into its third year, 2022 was the eighth consecutive year in which annual global temperature reached at least 1 degree celsius above pre-Industrial Revolution levels, fuelled by ever-rising Green House Gas (GHG) concentrations and accumulated heat.

“India’s diverse topography makes it highly vulnerable to climate risks, manifested in the form of sustained rise in temperature, erratic monsoon patterns, and rising frequency and intensity of extreme weather events.