India Needs $17.77 Trillion For Climate Goals & An Extra $12.4 Trillion To Not Hit Living Costs

The country will need $17.77 trillion to meet its long-term net-zero goals but it will have to find additional resources worth $12.4 trillion to complete the green journey, according to a study.

If this funding gap is met from external sources then household spending will rise by $7.9 trillion, it added.

According to a study by British lender Standard Chartered Bank, emerging markets, as a whole, will need an additional $94.8 trillion, an amount higher than their annual global GDP, if they are to meet climate goals without hitting their citizens' cost of living.

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India will need to find a funding gap of $12.4 trillion to meet net-zero goals of emissions, out of the $17.77 trillion it needs for the green journey, and if this finance is provided by developed markets, household spending may rise by $7.9 trillion compared to self-financing, wherein household spending may fall by $5.8 trillion, the study said.

The numbers are on top of the capital already allocated by respective governments under their current climate policies.

What is Net-zero?

Net-zero refers to a state in which the greenhouse gases going into the atmosphere are balanced by removal from the atmosphere.

The term net-zero is important because ¨C for CO2 at least ¨C this is the state at which global warming stops. The Paris Agreement underlines the need for net-zero, requiring states to ¡®achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century.

Stave off the worst of climate change

Conversely, if emerging markets transition to a greener future without help from developed markets, household consumption in these markets could fall by 5 per cent on average each year, the report noted.

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The global journey to net-zero will help the world in its efforts to stave off the worst of climate change.

The report is of the view that private investors can contribute as much as $83 trillion of the $94.8 trillion that is required, underscoring the urgent need for financial institutions to fulfill green and transition finance pledges.

According to Standard Chartered estimate, India will need to invest an additional investment of $17.77 trillion to complete its journey to the net-zero level.

Of this $8.5 trillion in its power sector, $6 trillion investment in energy efficiency -- including industry transport and buildings, $2.7 trillion investment to offset carbon tax revenues, household heating tax, and $573.3 billion in other public expenditure like an early unveiling of the scrappage policy and heating subsidies. This leads to a funding gap of $12.4 trillion.

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