NEW DELHI: From green bonds to incentivising high-efficient solar modules, the Union Budget focuses on climate action to deal with the global risk. Finance Minister Nirmala Sitharman announced that sovereign green bonds will be issued for mobilising resources for green infrastructure and the proceeds will be deployed in public sector projects, which help in reducing the carbon intensity of the economy.
With the launch of green bonds, India will join a select group of countries, primarily European, which have issued such bonds.
Chirag Gajjar, head, Subnational Climate Action, Climate Program, WRI India, said: “Access to green bonds will enable local governments to cost-effectively finance basic public infrastructure projects that will lead to climate co-benefits. Focus must be on building capacity of local governments to access such finance avenues.”
The finance minister said the risks of climate change are the strongest negative externalities that affect India and other countries and that the low carbon strategy is an important reflection of the government’s strong commitment towards sustainable development.
The Budget has proposed an additional allocation of Rs 19,500 crore for Production Linked Incentive (PLI) for manufacture of high-efficiency modules. Aarti Khosla, director, Climate Trends, said it was perhaps the first Union Budget to acknowledge climate action in it’s opening statement and that the Budget seemed to acknowledge clean energy transition as a fundamental principle. “All of this needs to be placed properly in policy and regulation,” she added. The budget for the Union environment ministry saw an increase of Rs 161 crore compared to last financial year.
Coal gasification pilot project
The budget talks about energy efficiency and saving measures through setting up of the Energy Service Company (ESCO) business model in commercial buildings. Four projects for coal gasification and conversion of coal into chemicals are also proposed