RBI's Report On Adapting To Climate Change

Context:

The Reserve Bank of India’s (RBI) Department of Economic and Policy Research (DEPR) said in its Report on Currency & Finance 2022-23 that the cumulative total expenditure for adapting to climate change in India is estimated to reach ₹ 85.6 lakh crore (at 2011-12 prices) by 2030.

Findings of the report ” Towards a Greener Cleaner India”:

Efforts needed: India’s goal of achieving the net zero target by 2070 would require an accelerated reduction in the energy intensity of GDP by about 5% annually and a significant improvement in its energy mix in favour of renewables to about 80% by 2070-71.
Fund Estimates: India’s green financing requirement is estimated to be at least 2.5% of GDP annually till 2030 to address the infrastructure gap caused by climate events.
Fund allocation: The financial system may have to mobilise adequate resources and also reallocate current resources to contribute effectively to the country’s net zero target.
Climate vulnerability of banks: Results of a climate stress test reveal that public sector banks (PSBs) may be more vulnerable than private sector banks.

What is adaptation to climate change ?

Adaptation refers to adjustments in ecological, social or economic systems in response to actual or expected climatic stimuli and their effects.
It refers to changes in processes, practices and structures to moderate potential damages or to benefit from opportunities associated with climate change.
In simple terms, countries and communities need to develop adaptation solutions and implement actions to respond to current and future climate change impacts.
Adaptation can range from building flood defences, setting up early warning systems for cyclones, switching to drought-resistant crops, to redesigning communication systems, business operations and government policies.

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