India will spend an estimated 85.6 lakh crore rupees ($1.05 trillion) by 2030 to adapt its various industries to be compliant with climate change norms. These figures are part of ‘Report on Currency & Finance 2022-23’ by the Reserve Bank of India’s (RBI) Department of Economic and Policy Research (DEPR).
“India has embarked on a targeted and time-bound climate action plan to reduce carbon emissions and currently ranks the best amongst G-20 countries as per the Climate Change Performance Index, 2023. India’s green financing requirement is estimated to be at least 2.5 percent of gross domestic product (GDP) annually till 2030,” the apex bank stated.
The report suggests that a sector-specific strategy for mitigating climate risks is necessary, considering the challenging policy decisions involved in balancing the short-term impact of fulfilling NDC commitments against the potential long-term output losses due to inaction. The central bank highlighted that there is a need for a balanced policy intervention with progress ensured across all policy levers for India to achieve its green transition targets by 2030 and later make the net zero goal by 2070 attainable.
India which currently holds the G20 presidency has positioned LiFE (Lifestyle for Environment) as a way forward in its fight against climate change. It intends to bring behaviour changes on a global scale through LiFE. The RBI is expected to set a disclosure framework on climate-related financial risks and guidance on climate scenario analysis and stress testing shortly.