economics

1. Adopt Green Technology or Face Extinction:
•We observe so many Climate Changes over the years
>>
•This includes severe droughts, increased depletion
of groundwater reserves, seawater acidification,
rising seawater levels, the rapid spread of diseases
and macroparasites, and the extinction of species.
•So its apt time to be conscious as these changes
are becoming irreversible.

2. Green technology offers us the best hope to respond to
these climatic changes because >>
•The world has a fixed amount of natural
resources, some of which have already been
depleted or exhausted.
•There is pollution of air,water, contamination
of soil etc
•Use of these polluted ingredients are causing
health risks everywhere.

3. Renewable Energy vs. Nonrenewable Energy
• Non-renewable energy resources include nuclear,
hydrogen, coal, natural gas, and oil.
• They lack the ability to be regenerated by the
environment
• So they cannot be sustained.
• The expenses related to their extraction or production is
immense.
• Their use are the main causes of environmental
degradation and carbon emissions

4. Renewable Energy sources
• are those which can be regenerated.
• They dont have carbon emissions
• Many of them can be tapped for commercial uses.
• Though initial investment may be huge, gradually their
external positive externalities leads to decreasing
costs.
• They can contribute immensely to reduce environmental
degration and lower carbon emissions.

5. The term “green investments”
• >> refers to the investment activities that are focused on
projects or companies that are committed to the
preservation of natural resources.
• Many of them are targeted for environment upgradation
related issues like:
• >> initiatives for natural resource conservation
• >> production of alternative energy sources
• >> the execution of projects pertaining to clean air and
water etc
•

6. Green Investment contd....
•Corporations, private equity firms, hedge funds,
and individuals can raise funds for green
investment.
•Typically these funds are raised in securities,
mutual funds (MFs), electronically traded
funds(ETFs), and bonds.
•According to a report prepared by Global
Sustainable Investment Alliance in 2018-19 nearly
$31 trillion was held under various green
investment instruments.

7. Some examples of Stock equity of companies for Green
Investment:
• Water Stock: Pacific Gas and Electric Company,
Idacorp Inc., and Brookfield Renewable Partners.
• Wind Power: General Electric, Siemens Gamesa
Renewable Energy, NextEra Energy Partners, and
Vestas Wind Systems.
• Solar Energy: First Solar Inc., JinkoSolar Holding Co.
Ltd., Sunpower Corp., Enphase Energy Inc., Vivint Solar
Inc. andSunrun Inc.
• Waste Reduction: Republic Services Inc., Covanta
Holding Corp, and Waste Management Inc.

8. Why Investment in these: Opportunities of Green
Investments
• Green Power: A source of power generation for homes and
industries without using fossil fuels will greatly reduce
carbon emissions.
• Water Stock: We are gradually running out of fresh
water. As such, considerable investment is required in the
sustainable collection, purification, and distribution of
water.

9. Why Investment in these: Opportunities of Green Investments (contd.)
• Wind Power: It is one of the fastest-growing renewable energy
sources that has grown 75 times over the last twenty years.
China, the US, and Germany are the front runners, with an
installed capacity of 217GW, 96GW, and 59GW, respectively.
Recently, many investors have been interested in wind farms or
considering the companies producing wind turbines.
• Solar Energy: It is another source of renewable energy wherein
energy from sunlight generates power, mostly used for domestic
purposes with limited industrial use. More and more green
investmnent are being targeted towards it.

10. Why Investment in these: Opportunities of Green Investments
(contd.)
• Pollution Control: To implement large scale measures for
reducing greenhouse gas emissions from industrial set-ups,
abatement of vehicle emissions, etc. the Government requires
support in the form of investments.
• Waste Reduction: With the change in lifestyle, the need for
waste reduction has increased manifold. Most of us know the
things that can be recycled, but there has been a large increase
in the number of products (e.g. cell phones, batteries, etc.) that
can’t be recycled. In this case, it is important that we reuse them
and reduce the accumulation of such waste. As such, there is a
growing business surrounding these recycled items, which involves
huge investments too.

11. Major advantages of green investments are as follows:
Fund Raising may be easier as more and more people
are grwoing conscious about climate changes,
pollution and in a nut-shell our survival.
The borrowing costs of green investment are
usually low as they have major health benefits.
Tax exemption benefits are available for most
green investments

12. Some Disadvantages of Green investments are :
Its market share is still very small.
There are at times ambiguity regarding the purpose of
the green investment.
For many companies in their initial phase, they have low
revenues and exorbitantly high valuations. This makes the
investment in such companies riskier.

13. Green Bond : interchangeably used with Climate Bonds
• A green bond is a type of fixed-income instrument that is
specifically earmarked to raise money for climate and
environmental projects. These bonds are typically asset-linked and
backed by the issuing entity’s balance sheet, so they usually carry
the same credit rating as their issuers’ other debt obligations.
• Green Bonds are Different from Climate Bonds though they are
used interchangeably.
• While the Climate bonds specifically finance projects that reduce
carbon emissions or alleviate the effects of climate change, the
green bonds represent a broader category of instruments related
to projects with a positive environmental impact.

14. Green bonds are intended to encourage sustainability >>
• They finance projects aimed at :
• energy efficiency
• pollution prevention
• sustainable agriculture
• fishery and forestry
• the protection of aquatic and terrestrial ecosystems
• clean transportation
• clean and sustainable water management
• finance the cultivation of environmentally friendly technologies
• and the mitigation of climate change.

15. Its other Features:
>> They come with tax incentives such as tax
exemption and tax credits.
Thus they provide a monetary incentive to tackle
prominent social issues such as climate change and a
movement toward renewable sources of energy.
>> To qualify for green bond status, they are often
verified by a third party such as the Climate Bond
Standard Board, which certifies that the bond will
fund projects that include benefits to the
environment.

16. How big is the green bond market?
• According to the Climate Bonds Initiative, the issuance of green
bonds reached $269.5 billion in 2020.
• The United States was the largest player, with $50 billion in new
issuances.
• The same analysis found that the cumulative issuance of green
bonds had reached more than $1 trillion.

17. India’s Status:
>>The carbon intensity of India’s economy has a direct impact on
global emissions, and thus, on climate change, being one of the
most populous country of the world, with nearly 1.4 billion
inhabitants.
>>In 2021, India’s greenhouse gas emissions (GHG) amounted to
some 3.9 billion carbon dioxide (CO2)-equivalent tonnes, making
it the world’s third largest emitter, behind China and the United
States, although GHG emissions per capita were only 2.8 CO2-
equivalent tonnes, compared to a world average of 6.9 and 17.5 in
the United States.
•

18. India’s longstanding commitment to the environment
• India’s constitution provides for the protection and improvement of the environment
as well as the safeguarding of forests and wildlife.
• The National Action Plan on Climate ChangeIn 2008 was launched by GOI with eight
national missions that aim to reduce the economy’s emission intensity, improve
energy efficiency, increase forest cover, and develop sustainable habitats. The climate
policy is coupled with other policy goals, such as energy access and water security.
• India’s 2030 climate targets submitted under the Paris Agreement include reducing its
economy’s emission intensity by 45% compared to 2005 and increasing the share of
non-fossil fuel-based energy resources to half of the installed capacity.
• To finance these and other commitments, the country needs around $170 billion per
year in investments.
• However, with an average of $44 billion per year, estimated climate finance flows have
fallen short.

19. Latest steps of India for Green Finance:
• On February 1st, 2022, Union Minister for Finance and Corporate
Affairs, Ms. Nirmala Sitharaman announced the Government of
India’s plan to issue sovereign green bonds to mobilize resources
for green infrastructure.
• The proceeds will be deployed in public sector projects that
contribute towards reducing the carbon intensity of the economy.
• On January 25, 2023, India issued the first tranche of its first
sovereign green bond worth INR 80 billion (equivalent to $980
million).
• On February 9, 2023, the Government of India announced the
issuance of another INR 80 billion ($968 million) in sovereign
green bonds.

20. India leads Asian emerging markets (excluding
China) in green bond issuance
• Indian green bond issuances have reached a total of $21 billion as of
February 2023.
• The private sector was responsible for 84% of the total .

21. Pie chart of green bond amounts issued in India by type of
issuer

22. • The largest green bond issuer in India Greenko Group is funding hydro, solar,
and wind power projects in several Indian states with its green bond proceeds.
• Ghaziabad Nagar Nigam, a civic body in Uttar Pradesh, is the first Indian local
government to have issued a green bond (USD eq 20 million in 2021).
• Indore Municipal Corporation issued USD 87 million in green bonds in 2023.
• Indian issuers have issued a greater amount of green bonds ($21 billion) than
other emerging markets in Asia, excluding China.

23. To conclude
•
• Government of India’s attempt and the people’s awareness and efforts we
hope for more investments in green and climate-friendly projects and
activities that will contribute towards India’s transition towards green,
resilient, and inclusive development.
• LET US SAVE OUR PLANET FOR OUR OWN SURVIVAL