No shortage of funding for green transition but more work needed: NITI Aayog VC

Revamping the global financial architecture to access greater private funding will be key to powering green development and climate transition, senior Indian officials said at the conclusion of a workshop on sustainable growth on Saturday.

The two-day workshop with the theme “Sustainable growth agenda for the global economy”, organised by Niti Aayog as a side event under India’s G20 presidency, attracted 40 experts from across India and abroad. Various sessions of the event were dedicated to energy and climate, technology and policy, and reshaping global finance for sustainable growth.

NITI Aayog vice chairman Suman Bery told reporters at the conclusion of the workshop that the experts were of the view that there is no shortage of funding for a green transition, but more work needs to be done on the “pipes bringing in the funds”. There were also challenges in terms of data and preparation of projects so that they can attract funding, he said.

India’s G20 Sherpa Amitabh Kant, who also participated in the event, was of the opinion that the global financial architecture must be rejigged to ensure the flow of funding to emerging economies, which are set to account for almost 80% of global economic growth in the years ahead. The share of developed countries in overall GDP growth is declining while that of developing nations is increasing, he noted.

However, there is a need for a greater flow of funding from the developed world to emerging markets, which are already grappling with the impact of the Covid-19 pandemic, the cost of living crisis and the slowdown in the implementation of the Sustainable Development Goals (SDGs), he said.

While about $5 trillion is needed for both climate transition and implementing the SDGs, the move towards a clean economy will open up business opportunities worth about $90 trillion, Kant said. Almost $350 trillion is available globally for investments, including $150 trillion from pension funds and institutional investors, but the challenge is derisking projects so that they attract investors, he added.

Niti Aayog CEO BVR Subrahmanyam said it was becoming increasingly clear that the bulk of funding for a green transition will have to come from the private sector, and the challenge will be to reform multilateral financial institutions to enable the flow of capital. Indian states will also play a greater role as the bulk of green transition projects in areas such as energy and manufacturing will be handled by them, he said.

Proof of concepts will need to be established and projects will have to be prepared in a way that they can draw investments, he said. Niti Aayog is set to play a key role in helping the states in these efforts, he added.

Asked about differences within the G20 on the green transition and climate funding, Kant said the Indian presidency of the grouping of 20 largest economies is ambitious in all aspects. “We’ve pushed as much as possible and...we’ve been very ambitious and action-oriented right from the beginning. We’re not looking for a middle ground, we’re pushing the boundaries as much as possible.”

This includes India’s efforts to push for inclusive growth, accelerated implementation of the SDGs and the green development pact, Kant said.