Examine the case for the regulatory innovation in India’s efforts towards green transition.

Climate change is inarguably one of the greatest challenges faced by the world today. India has committed to become net zero by 2070, It will require a rapid transformation towards a green economy and sustainability.

India’s efforts towards green transition:

• There has been a strong momentum to transform the energy sector in the past decade.
• Decarbonisation of energy sector and increasing role of renewables.
• According to the IAEA, the demand for electricity is going to be tripled by 2040 in India. To meet the increasing energy demand, installed renewable power generation capacity in India has increased at a fast pace over the past few years.
• Milestone of 100 gigawatt renewable energy capacity has been achieved before the set target. Presently, more than 150 GW of renewable energy capacity (Including large hydro) is installed in the country.
• India stands fourth in wind power, fifth in solar power and overall fifth in installed renewable capacity globally.
• Increased focus on electric vehicles, green hydrogen and other environment friendly technologies.

A large number of investment opportunities will open up with the change in policy for green transition.

Opportunities:

• Trillions of dollars are needed to be invested in India to achieve net zero commitments.
• The amount of money required for green transition is a very significant proportion of India’s current and projected GDP.
• The developing countries like India will require seamless flow of finance, technology, and capacities to develop the ecosystem for green transition.

Innovations in financial products and regulatory flexibility is needed to achieve the goal of green transition, without sacrificing the growth.

Regulatory innovation needed:

• Climate finance.
• Sustainable bonds issuance for ‘green’ projects.
• Risk mitigation products to deal with risks involved in new technologies for green transition.
• Development of the carbon market with careful planning.
• Capacity building.
• Aligning the Centre and state policies.
• Skilling and integrating intermittent renewable energy in the national grid without compromising the resilience and reliability.

Way forward:

India’s transition journey is underway and given the large size of India, it would be transformational for the whole world. Developing sustainable technologies, innovative business models and reforms in our policies will be critical for this transition.