Introduction:

Climate change causes rising temperatures, altered water cycles and extreme weather events that raise risks to energy, food and water systems, people and the global economy. Between 2030 and 2050, the World Health Organisation expects 250,000 additional deaths a year due to climate change.

Context:

• HSBC Global Research new analysis covers 67 countries accounting for 80 per cent of the world’s population and 94 per cent of global GDP. Besides the physical impacts of climate change and sensitivity to extreme weather, we have examined each country’s potential to respond to change, plus transition risks – the challenges faced in trying to mitigate climate-change risks and move towards a lower-carbon economy.
• All countries are being impacted by climate change but some face much more acute challenges than others. Analysis by HSBC finds that India, followed by Pakistan and the Philippines, are the most vulnerable countries to changes in climate, with Finland, Sweden and Norway, then Estonia and New Zealand, the least exposed.
• The country most exposed to physical impacts overall is Qatar, followed by Israel, then Bahrain. Indeed, the seven most vulnerable are all in the Middle East or North Africa. The least exposed is Canada, followed by Russia and Finland.
• Qatar and Bahrain also have the highest average annual temperatures – 28.2ºC – just ahead of Singapore. The countries weakest on potential to respond to climate change are Kenya, then Lebanon and Pakistan. Best-placed are Norway, New Zealand and Australia. The need to address these challenges is more urgent than ever.

Indian Situation in this regard:

• India is making big efforts in that direction. But more needs to be done. A climate-resilient economy cannot be a priority only for the government. Companies, regulators, banks and financial institutions need to be part of the effort.
• The government aims to source 175 GW of power from renewables by 2022 and for nearly 57 per cent of total electricity capacity to come from non-fossil fuels by 2027. All of this will require billions of dollars’ worth of investments.
• Role of Investment from Private sector:
• It has been estimated that approximately $100 trillion of additional investment will be required between 2016 and 2030 to sync the imperatives of global development with that of addressing the challenge of climate change.
• Banks and financial institutions are key intermediaries between investors who are keen to put more of their cash into low-carbon, sustainable projects and those requiring capital. Globally, green finance is gaining prominence as a medium to raise funds for environment-friendly and climate-resilient projects.
• The appetite for green investment opportunities is growing with European and US investors, in particular, committed to increasing their climate-related holdings.

Concept of Green Financing in India:

• In India the concept of green financing is nascent. Take the green bond market. Green bond issuance in India rose sharply last year — to more than $4 billion from $1.3 billion in 2016, according to data provider Dealogic. While this is a welcome development, it is just a drop in the ocean against India’s climate change-related investment needs.
• Measures to encourage green-bonds could help raise finances needed to “green” India’s economy. The government could offer tax incentives to encourage mutual fund and other onshore investors to invest in local green bonds.
• Currently, there is no incentive for onshore investors to buy labelled green bonds or make green investments. India could also look at issuing a sovereign green bond, like France did to great effect last year.
• This would help push climate-change considerations into the limelight and provide a welcome market benchmark. Allowing banks to claim “priority sector benefits” on their green investments would also help.
• Knowledge sharing across regions and institutions is critical to ensure that initiatives that are successful in one location get replicated expeditiously.
• Steps such as these could help India to draw in more of foreign capital — this would be especially welcome given that global investors are increasingly factoring climate change into their assessments of a country’s overall economic performance.

Measures and Policies for Tackling Climate Change: Government Initiatives:

• “In the pre-2020 period, India announced its voluntary goal to reduce the emission intensity of its Gross Domestic Product (GDP) by 20-25 per cent from 2005 levels by 2020.
• According to Biennial Update Report submitted by Government of India to United Nations Framework Convention on Climate Change (UNFCCC) in 2016, India has achieved 12% reduction in emission intensity between 2005 and 2010 and is on course to achieve the voluntary goal by 2020.
• Under the Paris Agreement, India has submitted its Nationally Determined Contribution (NDC) to the UNFCCC outlining eight (8) targets for 2021-2030, including
• To reduce Emission Intensity of its Gross Domestic Product (GDP) by 33 to 35 percent by 2030 from 2005 level,
• To achieve about 57 percent cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030 with the help of transfer of technology and low-cost international finance including from Green Climate Fund (GCF),
• To create an additional carbon sink of 2.5 to 3 billion tonnes of CO2 equivalent through additional forest and tree cover by 2030.
• To achieve the goals, Government of India is implementing the National Action Plan on Climate Change (NAPCC) which includes eight national missions being implemented by various Ministries in specific areas of Solar Energy, Enhanced Energy Efficiency, Sustainable Habitat, Water, Sustaining the Himalayan Ecosystem, Green India, Sustainable Agriculture and Strategic knowledge for Climate Change.
• Government of India is also implementing a dedicated National Adaptation Fund to implement adaptation actions in vulnerable sectors across the country.

Conclusion:

• All the issues that concern us — poverty, education, employment, health — it is easy to forget that global warming is one of the most critical challenges we face. We need to do a lot more and a lot sooner or risk an environmental crisis.
• Countries spend trillions of dollars on waging wars, but they are reluctant to commit more to mitigate climate change and this is an imminent disaster.
• The world is at an “important stage” to deal with climate change and should lay stress on “very strong” community- oriented activity to tackle the issue.
• While using Technology as a solution to the climate impacts, for instance drip irrigation in dry lands, ramifications and worsening of social and political conditions should not be ignored.
• Financing clean energy infrastructure, sustainable transport, energy efficiency and waste management are among the key imperatives today. Growth and diversification of the market remain key targets.
• Integrating adaptation and mitigation could be a possible way out. Integrating both will increase the local legitimacy of the project, as adaptation puts emphasis on local needs.