Green policy pragmatism shaping India's transition: FinMin economy review

The review has noted the importance of having the right balance between development and emissions mitigation

The Economic Review, in its chapter on India’s climate action, has lauded the policies that balance economic growth and the country’s long-term climate action plan. The Review highlights the government’s achievement in placing developmental priorities at the core of its energy transition efforts.

“The Government of India’s policies and initiatives to achieve high economic growth, substantially improve the standard of living, ensure food and water security, manage disaster risks, create resilient infrastructure, improve health and social infrastructure, and take steps to conserve biodiversity and natural resources are measures to enhance resilience,” notes the Review.

The Review emphasises the importance of finding the right balance between development and emissions mitigation.

“It begins with the realisation that wishing away the trade-off is the wrong place to start. Fortunately, near-term pragmatism, blended with a clear long-term goal of reducing dependence on fossil fuels, is shaping India’s policies towards energy transition,” states the Review.

Citing climate change as one of the biggest threats to global economic growth, the Review acknowledges India as one of the few countries where the growth of green energy and allied ecosystems has matched the economic pace. The Review also underscores India’s achievements in meeting climate action goals.

India has already surpassed the targets for building non-fossil fuel-installed electricity capacity, reaching 43.9 per cent in November 2023. The reduction in the emission intensity of the economy was 33 per cent by 2019 from the 2005 level, and an additional carbon sink of 1.97 billion tonnes of carbon dioxide equivalent (CO2eq) was created by 2019, exceeding the 2005 level.

“The strengthened National Action Plan on Climate Change has been a prominent intervention for the implementation of India’s climate action and comprises nine missions in specific areas, including solar energy, energy efficiency, water, sustainable agriculture, Himalayan ecosystem, sustainable habitat, green India, strategic knowledge for climate change, and the recent Health Mission,” according to the review.

Beyond policy initiatives by the Centre, the Review also mentions steps taken by the financial sector to tackle the increasing risk of climate change and mainstream climate considerations into the financial economy. It cites Securities and Exchange Board of India’s role as one of the early adopters of sustainability reporting for listed entities, with mandatory environmental, social, and corporate governance-related disclosures for the top 100 listed entities (by market capitalisation) since 2012.

“Steps like the introduction of the regulatory framework for issuing green debt securities, ‘Framework for Sovereign Green Bonds’, ‘Framework for Acceptance of Green Deposits’ by the Reserve Bank of India, the inclusion of mitigation projects such as those in renewable energy in the priority sector lending rules, the issue of sovereign green bonds, and rules for financial disclosures and reporting of non-financial data, including information on sustainability impacts by top companies, all aim to foster and develop a green finance ecosystem in the country,” adds the Review.

Green strides
 

187 Gw: Non-fossil fuel based electricity capacity till Nov 2023. It is 43.9% of total electricity basket 

33%: Reduction in emission intensity till 2019 from 2005 level

1.97 bn tonnes: Additional carbon sink of CO2 equivlent created by 2019. It is higher than the 2005 level

100 mn: LPG connections under PM Ujjawala Yojana