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Green banking and investments can get India a 'sustainable scorecard'
CB Bureau January 26, 2016

‘Climate change requires an ambitious global response and a green economy that will protect the planet from its worst effects. It is necessary that we contribute to the development of green economies as they are the solution to sustainable global growth. Investments in sectors such as renewable energy, green buildings, clean transportation, water management, waste management, and land management can help in strengthening the green economies,’ said Dr R Seetharaman, CEO of Doha Bank, while opening the conclave on Green India organized by Madras Management Association.

Addressing the gathering of energy policymakers, energy project developers, environmental advisors, and bankers, Seetharaman underlined how China, the United States, India, and Europe were the highest CO2 emitters, and that they needed to seriously invest in green and renewable energy initiatives. He said, ‘Global investment in renewable energy was $270.2 billion in 2014, nearly 17 per cent higher than the previous year, while developing countries invested $131.3 billion, 36 per cent more than the previous year. However, India contributed a mere $7.4 billion, which is not much as a lot more is expected from one of the largest CO2 emitters of the world.’

It is to be noted that India plans to ramp up its solar power-generating capacity to 100,000 MW by 2022. The rise in low-carbon energy is spurred by ample domestic resources, falling costs, and strong policy support, as expressed in India’s historic climate pledge in the run-up to the Paris climate summit and also in its efforts to tackle local pollution and improve urban air quality. At the COP 21 meeting in Paris, India launched an international solar alliance that intended making joint efforts through innovative policies, capacity-building measures, and financial instruments to mobilise more than $1,000 billion investments that would be needed by 2030 for the massive deployment of affordable solar energy. India is also part of the Global Solar Council (GSC), which aims to unify the solar power sector at an international level, share best practices, and accelerate global market developments.

Highlighting climate change financing models and green banking initiatives, Seetharaman talked about ‘carbon finance’, ‘global environmental facility’, ‘clean technology fund’, and ‘feed-in tariff’. Carbon finance provides a means of leveraging new private and public investment into projects that reduce greenhouse gas emissions, thereby mitigating climate change while contributing to sustainable development. Seetharaman stressed upon the idea that banks as socially responsible organisations had a role to play to protect the environment and contribute to sustainable development. Every bank should earmark a minimum 10 per cent of its Tier 1 capital – subject to a cap of 10 per cent of risk-weighted capital – towards green banking or clean development mechanism (CDM), or any sustainable development project, taking into consideration the carbon emissions prevailing in the economy in which the bank operates.

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