Govt Releases Draft Climate Finance Taxonomy, Targets USD 2.5 Tn For Green Transition

(MENAFN- KNN India) New Delhi, May 8 (KNN) India may require financing to the tune of USD 2.5 trillion by 2030 for climate transition, given its pledge to achieve net-zero emissions by 2070, the government said on Wednesday in a draft paper titled 'India's Climate Finance Taxonomy.'

The Department of Economic Affairs stated, "India's climate finance taxonomy will facilitate greater resource flow to climate-friendly technologies and activities, enabling India to achieve the vision of being Net Zero by 2070, while ensuring long-term access to reliable and affordable energy."

However, the report did not reveal any specific tax measures to be taken to support the green transition, though these details are understood to have been shared with experts.

The framework aims to increase resource flow to climate-friendly technologies and activities while preventing 'green-washing' – deceptive or exaggerated claims about the environmental benefits of products or services. Public feedback on the draft is being sought by June 25, 2025.

Initially, the taxonomy will include power, mobility, and buildings in the context of climate mitigation and adaptation benefits. Agriculture, food, and water security will be considered in the context of climate adaptation and resilience building.

For addressing transition in hard-to-abate sectors, iron, steel, and cement would be considered at the outset.

The taxonomy will specifically cover technologies, measures, projects, and activities aligned with mitigation, including improvements in energy efficiency, reduction in emission intensity, and avoidance of greenhouse gas emissions through the expansion of non-fossil fuel energy.

It would also support adaptation actions that enhance resilience, including sustainable water management, ecosystem protection and restoration, and geography-specific measures to lower the negative impacts of climate change.

India's proactive measures have yielded positive results, with many targets under its first Nationally Determined Contribution achieved ahead of schedule. India achieved 40 per cent cumulative electrical power installed capacity from non-fossil fuel sources in 2021, well before the 2030 target. Similarly, the emission intensity of GDP was reduced by 33 per cent from 2005 levels by 2019-nine years ahead of the target year.

(KNN Bureau)

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