India requires an investment support of USD 1.4 trillion — an average of USD 28 billion per year — to become a net-zero economy by 2070 and raising financial resources for adaptation and mitigation action of this scale is an “unprecedented challenge”, according to the Economic Survey 2023-24 tabled in Parliament on Monday. Reaching net zero means achieving a balance between greenhouse gas emissions and the amount of these gases removed from the atmosphere by either natural processes, such as photosynthesis, or by other methods of carbon capture and storage.The consolidated report on the state of the economy in the previous year said India’s climate action has been largely financed through domestic resources and the flow of international finance has been “very limited”. Citing the Reserve Bank of India’s (RBI) data, the report said bridging the “substantial funding gap” necessitates allocating 2.5 per cent of India’s annual Gross Domestic Product (GDP) to green finance.
“Preliminary estimates indicate that the aggregate investment support required by India to achieve its 2070 net-zero target will be USD 1.4 trillion at an average of USD 28 billion per year. Raising financial resources for climate change adaptation and mitigation actions of this scale is an unprecedented challenge,” the document read. A 2022 report by the Climate Policy Initiative found that domestic sources accounted for the majority of green finance in India, at 87 per cent and 83 per cent in financial years 2019 and 2020 respectively.
