New Delhi: The Union Budget 2024 presented a mixed bag for India’s green ambitions. While Finance Minister Nirmala Sitharaman highlighted the importance of energy transition, experts from the Centre for Science and Environment (CSE) expressed both optimism and concern regarding the specific measures.
Sitharaman on Tuesday said, “We will develop a taxonomy for climate finance for enhancing the availability of capital for climate adaptation and mitigation. This will support the achievement of the country’s climate commitments and green transition.”
The budget emphasised several green initiatives. The PM Surya Ghar Yojana aims to install rooftop solar plants in one crore households, potentially reducing reliance on grid power. Exemptions on import duties for certain solar cell and panel components are expected to boost domestic solar manufacturing. Additionally, the development of a climate finance taxonomy is seen as a crucial step to attract green investments and align financial flows with climate goals. Furthermore, increased allocation for the National Clean Air Programme (NCAP) signals a commitment to air pollution control.
Anumita Roychowdhury, Executive Director of Research and Advocacy at CSE, praised some aspects of the budget but also highlighted areas needing improvement. “The focus on decarbonization pathways for hard-to-abate industries like cement is a positive step,” she said. Roychowdhury also noted the potential of the Critical Mineral Mission to strengthen domestic production of minerals essential for renewable technologies and electric vehicles (EVs). She appreciated the integration of urban and transport planning with a focus on transit-oriented development (TOD) as it can promote sustainable mobility and reduce emissions.
However, there are concerns about the budget’s clarity on achieving the ambitious target of 500 GW of renewable energy by 2030. The exemption of import duties might not be sufficient to ensure cost-effective domestic production of green technologies. Roychowdhury also pointed out the lack of concrete plans to address climate change adaptation challenges like heatwaves and sea level rise. “Beyond mentioning a carbon trading mechanism, there’s no clear strategy for reducing emissions from hard-to-abate sectors crucial for meeting the 2070 net-zero target,” she added.
Avantika Goswami, Programme Manager for Climate Change at CSE, echoed these sentiments. She acknowledged key policy signals for decarbonizing the economy but emphasized the need for more detailed pathways. “The development of a climate finance taxonomy is a significant step,” Goswami said, but she noted that measures for climate adaptation were insufficient.
Nivit Kumar Yadav, Programme Director of CSE’s Industrial Pollution team, pointed out the disconnect between the budget’s renewable energy measures and India’s goal of generating 500 GW of renewable energy by 2030. “The renewable energy sector did not receive a clear and supportive message from the current government,” he stated, highlighting the lack of a clear roadmap and supportive policies for the sector.
CSE’s research supports their concerns. The climate finance gap is a significant hurdle for developing countries like India in achieving ambitious climate goals. There is an urgent need for developed nations to contribute more in terms of technology and finance. Additionally, the European Union’s Carbon Border Adjustment Mechanism (CBAM) could disproportionately impact developing countries, hindering economic growth and access to global markets.
The Union Budget 2024 takes some positive steps towards India’s green transition. However, as CSE experts point out, more needs to be done to achieve ambitious targets and ensure a just and equitable transition. Increased transparency, detailed roadmaps, and robust adaptation strategies are crucial for a truly sustainable future.