Experts hailed the budget for its focus on sustainable urban planning and mass transport saying the high-level committee of urban planners, economists and setting up institutions for capacity building is a welcome step.
Union Finance Minister Nirmala Sitharaman presented the Union Budget 2022-23 on Tuesday while announcing several climate action initiatives like energy transition, issuing of green bonds, sustainable urban planning and others.
Dr Anjal Prakash, Research Director and adjunct Associate Professor at the Bharti Institute of Public Policy, Indian School of Business, said that for climate action, "this budget fairs quite well."
"The focus on sustainable urban planning and mass transport is a welcome step. It is estimated that half of Indians will be living in urban areas by 2050. The high-level committee of urban planners, economists and setting up institutions for capacity building is a welcome step. I hope that the planners will recommend urban infrastructure to be climate-resilient as many Indian cities are prone to climate-related risks and disasters," he said.
Prakash, who is also the lead author of the chapter on cities, settlements, and critical infrastructure and a cross-chapter paper on mountains as part of IPCC's 6th Assessment cycle, also said that the green bonds will help reduce India's carbon intensity.
"Announcing a climate action fund is a welcome step where the government's share is a maximum of 20 per cent and the rest is by the private parties. The Green Bonds for mobilising green infrastructure will be used for projects that will help reduce India's carbon intensity. The allocation for renewable energy and energy storage technologies such as solar modules are another area that needs applause," he said.
Sharing a similar view, Chirag Gajjar, Head of Subnational Climate Action, Climate Program, World Resources Institute India (WRI India), said that access to green bonds will enable local governments to cost-effectively finance basic public infrastructure projects that will lead to climate co-benefits.
Focus must be on building capacity of local governments to access such finance avenues, he said.
Another expert said that India will now join a select group of countries, primarily European, which have issued Green Bonds.
"The budget proposal to issue sovereign green bonds has several benefits, principal among which is signalling the country's seriousness in pursuing climate action.
"India will now join a select group of countries, primarily European, which have issued such bonds. We can also expect this move to catalyse the development of the domestic corporate green bond market," said Gagan Sidhu, Director, Council on Energy, Environment and Water-Centre for Energy Finance (CEEW-CEF).
In her budget speech, the finance minister announced that as a part of the government's overall market borrowings in 2022-23, sovereign Green Bonds will be issued for mobilizing resources for green infrastructure.
"The proceeds will be deployed in public sector projects which help in reducing the carbon intensity of the economy," Sitharaman said.
Lauding the move, Aarti Khosla, Director, Climate Trends, said that the mention of green bonds as part of overall market borrowings is a good step to raise funds for projects ear- marked as green infrastructure.
Khosla also said that the budget strongly acknowledged climate change and clean energy transition, adding that it all needs to be placed properly in policy and regulation.
"It was perhaps the first Union Budget to acknowledge climate action in it's opening statement. The budget seemed to acknowledge clean energy transition as a fundamental principle- there was mention of clean tech solutions, battery swapping policies, improving EV efficiency, finalising the Rs 19500 cr PLI scheme for solar as a way to move ahead on low carbon strategy," Khosla said.
Ulka Kelkar, Director, Climate, World Resources Institute India (WRI India), said that by referring to climate action as a sunrise sector and employment generator, the Budget has sent an important signal to markets, financial institutions and the workforce.
"Biomass pellets, energy efficient buildings, coal gasification and agroforestry are just the start of the transition to a carbon-neutral economy. The upcoming green hydrogen mission and circular economy action plans can initiate a deep shift towards industrial decarbonization," Kelkar said.
S N Tripathi, Steering Committee Member, National Clean Air Programme (NCAP), said that by fundamentally focusing on clean and sustainable development, the budget has focused on three major sectors: transport, energy and agriculture with an aim to reduce both- carbon dioxide and air pollution emissions - which augur well for clean air programs in the short term and achieving carbon neutrality in the long term.
However, Vibhuti Garg, Energy Economist, Lead India, Institute for Energy Economics and Financial Analysis, said the announcements seem to have fallen short of promoting clean energy in an accelerated manner. PTI AG RCJ RCJ