A climate finance taxonomy is a set of guidelines that will help investors and institutions to direct funds toward investments to tackle climate change.
India will develop the climate finance taxonomy in 10 months. Affirming the development, Ajay Seth, Secretary of the Department of Economic Affairs, said, “The finance minister declared that a taxonomy for financing climate change would be released. We would love to collaborate with all of you under the auspices of CII to finish the taxonomy structure, as it is something we have started. It will take roughly eight to ten months, or perhaps just six to eight months, but we have already begun that exercise, and we must cooperate.”
The International Finance Corporation report indicates that India needs a climate-smart investment potential of $3.1 trillion from 2018 to 2030, with electric vehicles at $667 billion and renewable energy at $403.7 billion.
Contextually, Ms Sitharaman had detailed the need for a ‘climate finance taxonomy‘ to increase capital availability for climate adaptation and mitigation, aiming to achieve climate commitments and green transition during her budget speech.
