Introduction The green transition of economies has become imperative, and governments, regulators, and the private sector across geographies and sectors are increasingly implementing decarbonising measures and strategies aimed at reducing emissions intensities, greening the financial system, and fostering green business opportunities. However, the financing landscape is skewed towards sectors focused on mitigation, including renewable energy proliferation and transport, which have developed a strong business case and garnered substantial political support compared to other energy-intensive and hard-to-abate sectors. Achieving a low-carbon economy necessitates an inclusive approach to financing the transition, especially considering the needs of Emerging Markets and Developing Economies (EMDEs), and focusing on hard-to-abate sectors, which have substantial carbon-removal potential. Process and energy-related emissions from hard-to-abate sectors collectively contribute to over 40 percent [1] of global greenhouse (GHG) emissions. These emissions may arise from production (in the case of steel, cement, aluminium, chemicals, pulp, and paper), energy (such as in oil and gas), and transport (e.g., aviation, shipping, and trucking). Ensuring the effective and timely transition of hard-to-abate sectors is therefore critical to achieve net-zero targets.
Authors
- Attribution
- Neha Khanna and Mannat Jaspal, “An Introduction to Green and Transition Finance,” ORF Issue Brief No. 730 , September 2024, Observer Research Foundation.
- Pages
- 20
- Published in
- India
Table of Contents
- Abstract 2
- Neha Khanna and Mannat Jaspal 2
- Introduction Introduction 3
- Introduction Introduction 4
- Figure 1 Percentage Share of GHG Emissions by Category India 2019 5
- Introduction Introduction 5
- Green finance 6
- Transition finance 6
- Transition Finance vs. Transition Finance vs. 6
- Green Finance Green Finance 6
- Table 1 Financing Transition Green Finance and Transition Finance Definitions and Examples 7
- Financing Transition 7
- Green Finance Transition Finance 7
- Transition Finance vs. Transition Finance vs. 7
- Green Finance Green Finance 7
- Table 2 Transition Finance Taxonomies 8
- Entity Document Name 8
- Transition Finance vs. Transition Finance vs. 8
- Green Finance Green Finance 8
- Figure 2 Capital Stack 9
- Transition Finance vs. Transition Finance vs. 9
- Green Finance Green Finance 9
- Figure 3 Status of GSS SLB and Transition GSS Debt Market 31 December 2022 10
- Transition Finance vs. Transition Finance vs. 10
- Green Finance Green Finance 10
- Figure 4 Total Size of the Indian GSS Market 31 December 2021 11
- Transition Finance vs. Transition Finance vs. 11
- Green Finance Green Finance 11
- Policy push 12
- Regulatory support 12
- Current Challenges Current Challenges 12
- Market movement 13
- Lack of taxonomy 13
- Current Challenges Current Challenges 13
- Current Challenges Current Challenges 14
- Regulatory guidelines 14
- Capacity building 14
- Market-led innovation 14
- Conclusion Conclusion 15
- Scope and Definition 15
- Transparency 15
- Cooperation 15
- Supply Chain Support 15
- Financial Innovation 15
- Conclusion Conclusion 16
- Endnotes Endnotes 17
- Endnotes Endnotes 18
- Endnotes Endnotes 19
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