India is on track to meet its climate targets, including reducing the greenhouse gas emissions by up to 35 per cent by 2030, by channelling trillions of dollars in private investments through a combination of policy reforms and innovative business models, a report said on Thursday.
“Developing countries like India can meet climate targets promised in the landmark Paris Agreement by catalysing trillions of dollars in private investments through a combination of smart policy reforms and innovative business models,” according to the report by International Finance Corporation, a member of the World Bank Group.
“Already, more than $1 trillion in investments are flowing into climate-related projects in these areas. But trillions more could be triggered by creating the right business conditions in emerging markets,” the report found.
The report titled ‘Creating Markets for Climate Business: An IFC Climate Investment Opportunities’ identifies seven industry sectors that can make a crucial difference in catalysing private investment – renewable energy, off-grid solar and energy storage, agribusiness, green buildings, urban transportation, water, and urban waste management.
India’s target, submitted as part of the Paris Climate Agreement, envisages a reduction of greenhouse-gas emissions intensity by up to 35 per cent by 2030. This presents the country as an attractive, and emerging market for climate business and will accelerate the market for climate-friendly solutions, it said.
“The private sector holds the key to fighting climate change. The private sector has the innovation, the financing, and the tools. We can help unlock more private sector investment, but this also requires government reforms as well as innovative business models – which together will create new markets and attract the necessary investment. This can fulfill the promise of Paris,” IFC CEO Philippe Le Houerou said.
India’s success in creating markets for solar power, estimated at more than 13 GW in capacity in 2017, has led the government to expand its National Solar Mission. The new target of 175 GW of installed solar energy by 2022 is five times the original target.
Similarly, India has now become the world’s fourth largest wind power generator, with a target to install 60GW by 2022. The government also recently announced a commitment to end the sale of gasoline-powered cars by 2030.
Additionally, India is leading the market, along with China, in grid-tied renewables with nearly half of new capacity added. The country leads the off-grid solar market, with over 3 million systems sold in 2016. It is also anticipated that rooftop solar for residential and commercial consumers, is set to grow in key emerging markets including India.
In India, IFC has invested about $1.2 billion in climate-friendly projects through direct investments, in the last five years.
“India is in the midst of a climate change revolution. It is making significant accomplishments in achieving its pledge to the Paris Agreement. IFC will continue working closely with businesses, investors, and governments to further support the goals set by the country,” Jun Zhang, IFC Country Head for India, said.