Greening Growth in India

India's draft climate finance taxonomy outlines a clear framework for aligning climate action with economic growth, promising to mobilize capital while safeguarding development priorities

- PRAVEEN GARG & SUDHEER KUMAR SHUKLA

PRAVEEN GARG IS A FORMER SPECIAL SECRETARY, MOEFCC, INDIA AND PRESIDENT, MOBIUS FOUNDATION. SUDHEER KUMAR SHUKLA IS HEAD THINK TANK, MOBIUS FOUNDATION.

India stands at a crossroads where the imperatives of rapid development and urgent climate action intersect. The recent release of the draft Framework of India's Climate Finance Taxonomy by the Ministry of Finance marks a watershed moment not just in India's policy landscape, but in the global quest for a sustainable future. This taxonomy, far from being a mere technical document, is a strategic lever to mobilize the trillions needed for India's climate goals while safeguarding its developmental priorities.

Why This Taxonomy Matters

India's climate ambitions are among the most significant in the world. With a pledge to achieve net zero greenhouse gas (GHG) emissions by 2070 and a commitment to reduce emissions intensity of GDP by 45% from 2005 levels by 2030, India is signaling its resolve. Yet, its per capita GHG emissions remain far below the global average of 6.7, and dramatically lower than developed economies like the US or EU. India's energy consumption per capita is just one-fifth that of developed countries, underscoring the scale of its development needs.

India's low energy consumption per capita and achieving a "Viksit Bharat" (developed India) by 2047 will require a dramatic increase in energy use, infrastructure, and resilience measures. The taxonomy recognizes these realities. It is designed to ensure that climate finance does not come at the expense of growth or poverty alleviation. Instead, it aims to channel investments into activities that genuinely promote both climate mitigation and adaptation, while supporting India's broader developmental aspirations.

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