India At Risk From Climate Change

Rajeshwar Rao, deputy governor of the Reserve Bank of India, on Thursday, said that India is particularly vulnerable to climate concerns because of its extensive coastline, high reliance on fossil fuels in energy systems, and reliance on agriculture for rural subsistence. As a result, action is necessary.

Speaking at a professional conference, Rao claimed that the economy is directly impacted by climatic trends and events, which then have an effect on financial institutions and systems.

He quoted a study and said that in order to convert the world economy to attain net-zero emissions by 2050, it would require spending USD 9.2 trillion annually on physical assets, which is USD 3.5 trillion more than is currently done. The Council on Energy, Environment, and Water has already calculated that India will require a total investment of USD 10.1 trillion to satisfy its net zero pledges by 2070.

 Low-Carbon Economy Obstacles

This emphasizes how urgent it is to make the switch to a low-carbon economy. In this process, it would be essential to have access to sufficient transition financing and supporting technologies, said Rao.

He discussed two crucial areas that banks should concentrate on in order to advance.

First, Rao said, "we will rely on their tried-and-true competence in financial intermediation by acting as an efficient conduit for channeling capital to carbon-efficient sectors and businesses in alignment with national objectives and goals."

Speaking of the second factor, he asserted that the management of financial risks that could be caused by climate change needs to be improved. All stakeholders would need to play their part in assisting the nation's transition and transformation into a climate-resilient economy, he continued. "Of course, the solutions for reducing these risks would have to be covered by strong public policy objectives.”