India Needs to Triple Investments to Meet Climate Targets, Urges Climate Policy Initiative Report

Keywords: India, climate finance, green finance, adaptation, mitigation, investments, NDCs, Climate Policy Initiative, sustainable development, Paris Agreement, greenhouse gas emissions

India faces a daunting challenge in meeting its climate targets, requiring a substantial increase in investments, according to a recent report by the independent non-profit Climate Policy Initiative (CPI). The report highlights that India needs to scale up its investments by at least three times—from Rs 425,300 crore ($50 billion) to Rs 1,275,900 crore ($170 billion) annually—to meet its climate commitments under the Paris Agreement.

The report, titled The Landscape of Green Finance in India, delves into the state of India’s green finance landscape, focusing on both mitigation and adaptation sectors. As of the financial year 2021-22, the mitigation sector attracted Rs 371,200 crore ($50 billion) on average, marking a 20 per cent increase from 2019-20. Meanwhile, the adaptation sector experienced a nearly three-fold increase in investments, reaching Rs 1,09,200 crore ($15 billion) annually in the same period.

Despite this progress, CPI’s report emphasizes that the country is still far from meeting its required climate financing goals. India’s government has estimated that the nation will need a staggering Rs 16,250,000 crore ($2.5 trillion) by 2030, or Rs 1,100,000 crore annually ($170 billion), to achieve its Nationally Determined Contributions (NDCs)—national climate action plans under the Paris Agreement aimed at limiting global temperature rise to 1.5°C and addressing climate impacts.

The report also highlights India’s cumulative adaptation-related investment needs, estimating at least Rs 8,560,000 crore ($1 trillion) between 2015 and 2030, equating to Rs 5,733,000 crore ($67 billion) per year.

Vivek Sen, Director of CPI India, stated, “India’s green finance landscape has made significant progress, but there is a long road ahead. This report highlights critical areas where action is needed to scale investments and bridge existing gaps.”

The report reveals that 83 per cent of India’s green finance for mitigation is sourced domestically, with the private sector contributing a significant 66 per cent of the total. On the international front, financing for mitigation has increased, with 17 per cent of mitigation funds coming from global sources in 2021-22, up from 15 per cent in 2019-20. Notably, 66 per cent of international mitigation flows now stem from private sources, a sharp rise from 40 per cent in 2019-20.

To meet its climate targets and ensure sustainable development, India must continue to grow its green finance sector by tapping both public and private sources. Bridging the funding gap will require innovative financial mechanisms, stronger policy support, and collaboration across sectors. If India is to honor its commitments and play a key role in the global fight against climate change, scaling investments in green finance will be crucial.

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