CLIMATE STRATEGY 2030 (Syllabus: GS Paper 3 – Env & Ecology)

Context: National Bank for Agriculture and Rural Development (NABARD) on the occasion of Earth Day unveiled its Climate Strategy 2030 document which aims to address India’s need for green financing.

Climate Strategy 2030:

• Pillars: It is structured around four key pillars which include:

oAccelerating green lending across sectors, playing a broader market-making role, internal green transformation and strategic resource mobilisation.

• Private sector participation: Leading real estate developers have pledged for sustainable development under it.

Green Financing

• About: It  aims to boost financial flows across various sectors including banking, micro-credit, insurance, and investment towards sustainable development priorities.
• Multiple Sectors: It involves participation from the public, private, and not-for-profit sectors, fostering a collaborative approach towards sustainable development.
• Environmental and Social Risks: One of its crucial objectives is to effectively manage environmental and social risks associated with investment and financing activities.
• Enhancing Accountability: It endeavours to establish mechanisms for greater accountability in financial decisions, ensuring transparency and responsibility in resource allocation.
• Green financing in India: India requires approximately $170 billion annually to reach a cumulative total of over $2.5 trillion by 2030, the current green finance inflows are critically insufficient.

o As of 2019-20, India garnered about $49 billion in green financing, merely a fraction of what is needed.

o With the majority of funds earmarked for mitigation, only $5 billion was allocated towards adaptation and resilience, reflecting the minimal private sector engagement in these areas due to challenges in bankability and commercial viability.