Mains Practice Questions

Approach:

• Introduce by mentioning the current state of green investment in India and key developments driving Sustainability.
• Delve into the Role of Green Investments in India’s Transition to a Sustainable Economy.
• Give in brief that despite the rise in green investments, tussle between growth and sustainability still exists.
• Suggest measures to integrate environmental sustainability with economic growth.
• Conclude suitably.

Introduction:

The rise in green bonds in India, such as the $21 billion raised in 2023, demonstrates the increasing financial commitment through green investments towards a sustainable economy.

• Also, successful projects like the Rewa Solar Park are thrusting India’s progress to achieve ‘Net-Zero’ emissions target by 2070, making sustainability central to economic development.

Body:

Role of Green Investments in India’s Transition to a Sustainable Economy:

• Boosting Clean Energy Transition: Clean energy receives the largest share of green finance, with 47% of the total in 2021-22.
  • These investments have not only expanded renewable energy capacity, reduced reliance on fossil fuels and aim to achieve a low-carbon economy but have also lowered electricity costs.
• Sustainable Infrastructure and Green Urbanization: India’s rapid urbanization calls for sustainable infrastructure, and green finance is driving the transition.
  • Over $86 billion has been earmarked for Smart Cities Mission, with significant funds flowing into low-carbon urban infrastructure projects.
    • For example, the city of Indore, under the Smart Cities Mission, has used green finance to fund solid waste management projects that generate carbon credits.
• Climate Adaptation and Resilience through Green Investments: Green finance is also pivotal for enhancing climate resilience in sectors like water management and disaster preparedness.
  • The National Adaptation Fund for Climate Change (NAFCC) has been instrumental in funding projects that improve climate resilience.
• Carbon Markets and Green Bonds: Green bonds, carbon credits, and other market-based financial instruments are helping channel investments into carbon reduction projects.
  • As part of its commitment to the Paris Agreement, India is working on developing a domestic carbon market to promote cost-effective emissions reductions.
  • For instance, between 2010 and 2022, India issued 278 million carbon credits, accounting for 17% of the global supply.
• Sustainable Agriculture and Biodiversity Conservation: Green finance is facilitating the transition to climate-smart agricultural practices and the conservation of biodiversity.
  • Also, the Green Credit Programme, launched in October 2023, rewards voluntary environmental actions like planting on degraded lands by generating green credits.

Though the Green Credit Programme is enhancing India’s transition to a sustainable economy, significant challenges persist, particularly in balancing development and conservation efforts, that includes:

• Deforestation and Habitat Loss: Rapid urbanization and infrastructure development are depleting forests, disrupting ecosystems and vital ecological services.
  • Between 2015 and 2020, India lost 668 kha of forest annually (FAO).
• Air Pollution from Industrialization: Industrial growth has led to severe air pollution, endangering public health.
  • In 2023, India had 39 of the world’s 50 most polluted cities, including Delhi and Kanpur.
• Water Stress and Over-Extraction: Overuse of groundwater for agriculture and industry is depleting water resources.
  • 70-80% of Indian farmers rely on groundwater for irrigation, leading to the depletion of aquifers in Punjab and Haryana.
• Land Degradation and Soil Erosion: Unsustainable agricultural and land use practices are causing soil erosion, desertification, and reduced agricultural productivity.
  • Nearly 30% of India’s land is degraded, with 100 million hectares affected by land degradation.
• Climate Change and Extreme Weather Events: Development has increased greenhouse gas emissions, contributing to climate change and extreme weather events.
  • India’s emissions rose by 6.1% in 2023, contributing 8% of global emissions. The country experienced extreme weather on 85 of 92 days in 2023, including floods and heatwaves.

Therefore, it is essential to more effectively integrate environmental sustainability with economic development through:

• Sustainable Urbanization and Climate-Resilient Infrastructure: Urban planning must incorporate green infrastructure, energy-efficient buildings, and zero-waste policies.
  • Focus on mixed land use, vertical green spaces, and resilient infrastructure.
  • Integrate initiatives like Smart Cities Mission with climate-resilient systems and renewable-powered public transport.
• Forest Conservation and Community-Driven Afforestation: Strict enforcement of compensatory afforestation laws and enhanced monitoring of ecological offsets are necessary.
  • Promote community-based afforestation and agroforestry for biodiversity and livelihood enhancement.
• Enhanced Environmental Governance and Green Financing: Strengthen Environmental Impact Assessments with public consultation at each stage.
  • Expand green financing, capitalizing on India's position as a top issuer of green bonds for renewable projects.
• Integrated Water Resource Management: Adopt rainwater harvesting, wastewater recycling, and aquifer recharge for equitable water distribution.
  • Encourage water-saving irrigation techniques like drip and sprinkler systems.
  • Implement ecologically sensitive watershed development to balance agricultural and industrial water needs.
• Circular Economy and Sustainable Consumption: Build a circular economy framework to minimize waste and resource extraction.
  • Integrate Extended Producer Responsibility (EPR), decentralized waste management, and large-scale composting for systemic change.
• Behavioral Change and Grassroots Sustainability: Promote public awareness on energy conservation, waste segregation, and sustainable consumption.
  • Implement eco-literacy programs in schools and local governance bodies to foster sustainability culture.
  • Empower communities through Self-Help Groups (SHGs) for decentralized waste management and renewable energy adoption.

Conclusion:

In alignment with India’s Panchamrit Goals, the government is establishing a National Green Financing Institution to streamline green investments and reduce financing costs. This initiative will not only support SDGs 7 (Affordable and Clean Energy), 13 (Climate Action), and 9 (Industry, Innovation, and Infrastructure) but also accelerate India’s transition to a low-carbon economy, ensuring sustainable growth that balances 3Ps: People, Profit and the Planet.