RBI - Report on Currency and Finance

RBI – Report on Currency and Finance
 

News: Recently, The Reserve Bank of India (RBI) released a report on currency and finance for the financial year (FY) 2022-23.
 

Theme - 'Towards a Greener Cleaner India'.

Background:

o Report covers four major dimensions of climate change to assess future challenges to sustainable high growth in India.
 

Key Points:

o The Public sector banks (PSBs) are likely to be more vulnerable than private sector banks (PVBs) in India on the basis of Climate stress tests. Loss due to climate related risks.
o Annual investment of about 2.5 per cent of GDP by 2030 would be required to fill the infrastructure gap due to Climate change.
o The country will stand to lose anywhere around 3 to 10% of its GDP annually by 2100 due to climate change.
o It was found that close to 34 million jobs will be impacted due to heat stress associated with productivity decline by 2030.
o RBI became part of Network for Greening the Financial System (NGFS) which aims to strengthen the global response to meeting Paris Agreement goals. It issued sovereign green bonds (SGBs) for green infrastructural investments and released a framework for mobilizing green deposits by regulated entities.
 

What policy options are at disposal to mitigate climate risks?

Policy options :

o Carbon Taxes

o Emission Trading

o Targeted R&D by Government

o Shift towards Central Bank for Digital Currency due to its low carbon footprint

o Identify Green Assets and Activities

o Address issues in Wind/Solar sector