Mumbai: India will spend an estimated 85.6 trillion rupees ($1.05 trillion) by 2030 to adapt its various industries to be compliant with climate change norms, a report by the country’s central bank said on Wednesday (May 3). Central banks, as financial regulators, have several policy instruments at their disposal to influence investment decisions and the allocation of resources and credit to achieve the sustainability targets, the Reserve Bank of India’s (RBI) Report on Currency and Finance said.
The report is written by contributors from the Department of Economic and Policy Research, an internal department of the RBI said.
Estimates suggest that green financing requirements in India could be at least 2.5 per cent of GDP annually to address the infrastructure gap caused by climate events. The report said a sector-specific approach to climate risk mitigation is called for, in view of the difficult policy trade-offs between containing near-term adverse output impact due to NDC (nationally determined contribution) commitments against larger output losses in the medium-run due to no policy action.
Different sectors of the economy have different emission intensities, it is advisable to not have a uniform climate mitigation strategy across sectors, it said, adding that without any policy action, India’s carbon dioxide emission levels may rise to 3.9 gigatonnes by 2030, from 2.7 gigatonnes in 2021.
The RBI is expected to set a disclosure framework on climate-related financial risks and guidance on climate scenario analysis and stress testing shortly.
Wednesday’s report, however, stated that prior to the implementation of the green capital regulation, bad loans in the banking system needed to be reduced to alleviate potential financial risks.
If green capital regulation amplifies non-performing assets, it could impede monetary policy transmission.
As per current policies and NDCs, the impact on inflation is expected to be minimal, even though its volatility is expected to increase, the report stated.
Overall, delayed and lenient policy actions generate adverse impact on both growth and inflation outlook in the medium-to-long-run.
(This story has not been edited by NDTV staff and is published from a syndicated feed.)
NDTV – Dettol have been working towards a clean and healthy India since 2014 via the Banega Swachh India initiative, which is helmed by Campaign Ambassador Amitabh Bachchan. The campaign aims to highlight the inter-dependency of humans and the environment, and of humans on one another with the focus on One Health, One Planet, One Future – Leaving No One Behind. It stresses on the need to take care of, and consider, everyone’s health in India – especially vulnerable communities – the LGBTQ population, indigenous people, India’s different tribes, ethnic and linguistic minorities, people with disabilities, migrants, geographically remote populations, gender and sexual minorities. In wake of the current COVID-19 pandemic, the need for WASH (Water, Sanitation and Hygiene) is reaffirmed as handwashing is one of the ways to prevent Coronavirus infection and other diseases. The campaign will continue to raise awareness on the same along with focussing on the importance of nutrition and healthcare for women and children, fight malnutrition, mental wellbeing, self care, science and health, adolescent health & gender awareness. Along with the health of people, the campaign has realised the need to also take care of the health of the eco-system. Our environment is fragile due to human activity, which is not only over-exploiting available resources, but also generating immense pollution as a result of using and extracting those resources. The imbalance has also led to immense biodiversity loss that has caused one of the biggest threats to human survival – climate change. It has now been described as a “code red for humanity.” The campaign will continue to cover issues like air pollution, waste management, plastic ban, manual scavenging and sanitation workers and menstrual hygiene. Banega Swasth India will also be taking forward the dream of Swasth Bharat, the campaign feels that only a Swachh or clean India where toilets are used and open defecation free (ODF) status achieved as part of the Swachh Bharat Abhiyan launched by Prime Minister Narendra Modi in 2014, can eradicate diseases like diahorrea and the country can become a Swasth or healthy India.