ANNOUNCEMENTS
Our planet's climate is demonstrably changing, with projections indicating this trend will persist throughout the 21st century and beyond. The extent of future climate change hinges on the cumulative release of greenhouse gases globally and the remaining scientific uncertainties regarding Earth's climate sensitivity to these emissions. This urgency necessitates a global response, and climate finance stands as a cornerstone. Defined by the UNFCCC, climate finance encompasses local, national, or transnational financing – drawn from public, private, and alternative sources – that seeks to support mitigation and adaptation actions that will address climate change. The Convention, the Kyoto Protocol, and the Paris Agreement all emphasize the responsibility of developed nations to provide financial assistance to those that are less endowed and more vulnerable. The transition to a low-carbon economy and adaptation efforts require substantial funding. Public and private sectors must collaborate to bridge this gap. Climate finance serves as a catalyst, not only by incentivizing innovation in clean technologies and financial instruments but also by filling market gaps where immediate profits might not drive investment. By providing long-term stability and fostering international cooperation, climate finance aims to create a sustainable and equitable future for all. However, the financial sector faces significant challenges in this transformative period. The shift towards a low-carbon economy presents transition risks, the potential for losses or missed opportunities. Stricter regulations, technological advancements, and changing consumer preferences threaten the profitability of carbon-intensive industries. These risks can manifest as loan defaults, stranded assets (obsolete fossil fuel infrastructure), and reduced income for financial institutions. Proactive management through exposure assessment, scenario planning, investment shifts, and client engagement is crucial to navigate this changing landscape and ensure long-term sustainability. This research investigates transition risks associated with various climate finance instruments in India. India, a rapidly developing nation with a significant reliance on fossil fuels, presents a unique case study for exploring the interplay between climate finance and transition risk. This research aims to identify and categorize the key climate finance instruments currently used in India. Compare and contrast the risk profiles of different instruments to understand their relative vulnerabilities and potential benefits in the context of India's climate finance strategy. By investigating these questions, this research aims to contribute valuable insights to the evolving field of climate finance, particularly within the Indian context. The findings will inform policymakers, financial institutions, and other stakeholders in developing effective strategies for mobilizing and deploying climate finance resources while minimizing transition risks. This will ultimately support India's efforts to achieve its climate goals and contribute to a more sustainable global future.
