Delhi.On Tuesday, Finance Minister Nirmala Sitharaman unveiled the Union Budget 2022. This is most likely the first budget in which the government has expressed concern and readiness about the dangers posed by climate change. The government announced the issuance of green bonds to be used for ‘green infrastructure.’
The government’s concern and readiness for the dangers posed by climate change were also reflected in the budget presented on Tuesday. The government announced the issuance of green bonds to accomplish this. Let us explain what green bonds are: bonds issued by the government to fund financial projects that have a positive impact on the environment.
What is ‘Green Bond?’
Green bonds are issued by the government to fund financial projects that benefit the environment. In 2007, the European Investment Bank and the World Bank issued green bonds. By issuing these bonds, the government will support public-sector initiatives that will reduce the country’s reliance on carbon. Indeed, green bonds are a promising new mechanism for raising funds for green projects. It enables local governments to fund climate change and other environmental initiatives.
Initiatives to combat climate change
The government made a number of significant announcements regarding climate change during the budget speech. The government has decided to issue green bonds to accomplish this. Indeed, the concept of carbon neutrality is gaining traction around the world. During her budget speech, Finance Minister Nirmala Sitharaman stated that green bonds are a foundational step toward making the Indian economy more environmentally friendly.
The bond will be guaranteed by the government.
Finance Minister Nirmala Sitharaman announced in the budget that the government will issue green bonds to fund environmental projects and reduce carbon emissions. The government will be held accountable for these bonds. So, hopefully, people will invest heavily in it. The purpose of green bonds, according to the Finance Minister, is to attract investors to the domestic green bond market as well as people from the private sector to invest in it.
What exactly is a Green Bond?
increased domestic solar photovoltaic panel manufacturing, use of biomass pellets in coal-fired thermal power plants, encourage the increased use of public transportation and electric vehicles in urban areas, and funding projects that have a positive environmental impact. Green Bonds will be distributed to According to the finance minister, the proceeds of these green bonds will be used to fund green infrastructure projects in the public sector.
What is the announcement’s purpose?
It is hoped, will aid in the reduction of carbon emissions in the country. To combat climate change, the Indian government has set a goal of zero carbon emissions by 2070. India made this announcement at the Cop 26 Climate Conference in Glasgow last year. In this conference, Prime Minister Narendra Modi promised to increase India’s non-fossil fuel energy capacity to 500 GW and to meet 50% of India’s energy needs with renewable energy sources. Solar energy accounts for most of these, followed by wind and hydroelectricity. Aside from that, India has stated its intention to reduce emissions per GDP by 45 percent by 2030.
Signs of Climate Action Seriousness
According to Gagan Sidhu, Director of CEEW-CEF, the budget proposal to issue green bonds has several advantages, the most important of which is that it demonstrates the country’s commitment to climate action. India will now join a small group of countries, mostly in Europe, that have issued such bonds. The European Union has turned its attention to the rapidly growing green bond market in order to stay ahead of climate change measures. There is a global market for green bonds worth approximately a trillion dollars.
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