Financing India's Low-Carbon Future

August 23, 2022

Achieving net-zero by 2050 has been a prime agenda of countries worldwide to mitigate some of the worst impacts of climate change. India, being one of the most vulnerable countries, has made significant commitments towards a low-carbon economy.

One of the biggest challenges of achieving this transition is the ability to finance it. Historically, debt has been the primary source of funding renewable projects in India. With the climate agenda at the forefront, innovative ways of generating capital to fund large-scale climate mitigation projects have become inevitable. Green bonds is one such debt instrument being proposed to finance projects promoting environmental and climate benefits. 

To understand the market potential and status of green bonds in India, Columbia Global Centers | Mumbai organized a seminar led by Dr. Gautam Jain, Senior Research Scholar at Columbia University's Center for Global Energy Policy (CGEP). The session was attended by stakeholders from regulatory bodies like Securities and Exchange Board of India (SEBI), financial institutions like YES Securities, think tanks, individual financial consultants, and academic institutions like IIT Bombay. The session focused on green bonds and their potential role in helping India move to a low-carbon future. 

Dr. Jain gave an overview of green bonds from the global perspective and how the market has evolved in the last 15 years after issuance of the first green bond. He talked about the importance of technology, regulations, and climate finance as the three main pillars for meeting climate commitments. His talk focused on reasons for low issuance in countries like India, best practices in international markets, and strategies and policies for the government. 

Participants shared insights on some of the projects being financed through green bonds and blended finance in India, while highlighting the need for a strong pipeline of projects, and the need to effectively monitor and report performance on these projects. A key takeaway from the seminar for the policymakers and companies was to set up a robust framework and taxonomy to increase India’s share of total green bond issuances worldwide. Dr. Jain emphasized that “for India to realize its growth projections, investments need to be made for a low-carbon future and green bonds can be a bridge to get there.”