26.04.2024
Green financing
For the Prelims: About Green Finance, Important points, Examples of green financing
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Why in the news?
Recently Climate Strategy 2030 has been unveiled by NABARD to mobilize green financing.
Important points:
- National Bank for Agriculture and Rural Development (NABARD) unveiled its Climate Strategy 2030 document on the occasion of Earth Day, which aims to address India's green financing needs.
- India needs about $170 billion annually to reach a cumulative total of more than $2.5 trillion by 2030, so current green finance flows are seriously inadequate.
- As of 2019-20, India's green financing stood at about $49 billion, a fraction of the need.
- NABARD's Climate Strategy 2030 is structured around four key pillars which include accelerating green credit across all sectors, playing a broader market-building role, internal green transformation and strategic resource mobilization.
About Green Finance:
- Green financing refers to any structured financial activity product or service that is designed to ensure better environmental outcomes.
- It includes a variety of loans, credit mechanisms and investments aimed at promoting the development of green projects or reducing the climate impact of regular projects.
- The goal of green financing is to align financial activities with environmental goals.
- It plays a key role in achieving many of the United Nations Sustainable Development Goals by supporting sustainable development priorities.
Examples of green financing:
- Financing of projects related to clean energy sources and energy-saving technologies.
- Financing initiatives that reduce pollution and promote clean practices.
- To support efforts to protect and conserve biodiversity.
- Investing in projects that promote resource efficiency and waste reduction.
- Financing projects that balance economic growth with environmental protection.
Source: The Hindu