Abstract

This report takes stock of the current climate finance landscape in India, along with the estimated financing requirements, enabling conditions and macro policy instruments to achieve national 1.5oC and 2oC goals. Climate change will negatively affect India’s economy leading to annual Gross Domestic Product (GDP) loss of 3 per cent to 10 per cent by 2100 (Kompas et al., 2018; RBI, 2023). In a business-as-usual scenario, India is estimated to face GDP per capita loss of 2.6 per cent, 6.7 per cent and 16.9 per cent in 2030, 2050, and 2100 respectively (Kahn, 2019). The impacts of climate change are projected across regions and key sectors like health, agriculture, labour productivity, and infrastructure. Beyond a certain warming threshold, climate impacts could be irreversible, potentially catalysing the collapse of ecological, social and economic system, as the space for adaptation rapidly contracts. It is hence crucial to limit warming to 1.5 °C and transition to a low carbon economy in the coming decades. However, meeting the global 1.5°C target will require investments of 7 to 18 per cent of India’s GDP2019.