India Releases Draft Climate Taxonomy for Investment

India Releases Draft Climate Taxonomy for Investment

Why in News ?

The Finance Ministry has unveiled a draft climate finance taxonomy to direct investments into clean energy and climate-resilient infrastructure. This initiative follows COP29 disagreements over defining “climate finance” and aligns with India’s Net Zero 2070 and Viksit Bharat goals.

India Releases Draft Climate Taxonomy for Investment

Objective and Scope of the Draft Taxonomy:

  • The draft titled “Framework of India’s Climate Finance Taxonomy” was released by the Finance Ministry.
  • It is a tool to identify climate-aligned activities that support India’s climate goals.
  • Aims to promote investment in climate-friendly technologies and support India’s Net Zero by 2070
  • Ensures alignment with developmental goals like Viksit Bharat and prevents greenwashing.

Structure and Focus Areas

  • The taxonomy will classify activities into two key categories:
    • Climate Supportive: Reduces greenhouse gas emissions, improves emission intensity, promotes adaptation solutions, and encourages R&D.
    • Climate Transition: Focuses on sectors with hard-to-abate emissions, such as iron, steel, and cement.
  • Ensures long-term access to affordable and reliable energy.

Global Context and COP29 Disagreements

  • Released in the backdrop of COP29 held in Baku, Azerbaijan, where disputes arose over the definition of climate finance.
  • Developed countries pledged $300 billion annually by 2035, against a demand of $1.35 trillion.
  • The taxonomy could help standardize climate finance, enhancing clarity and accountability.

What are Sustainable Development Goals (SDGs)?

●Adopted by the UN in 2015 as part of the 2030 Agenda for Sustainable Development.
●Comprise 17 goals and 169 targets to be achieved by 2030.
● Aim to end poverty, eradicate hunger, and ensure health and well-being for all.
●Promote quality education, gender equality, and clean water and sanitation.
●Focus on affordable clean energy, decent work, and economic growth.
●Encourage sustainable cities, responsible consumption, and climate action.
●Emphasize protection of life below water and life on land.
●Support peace, justice, and strong institutions, and global partnerships.
●Integrate social, economic, and environmental dimensions of development.
●SDGs work collectively to build a sustainable, equitable, and resilient future for all.