Need a People-Centric Approach for India’s Climate Finance Taxonomy, Say Experts

On Tuesday, 23 July, while presenting the Union Budget 2024, Finance Minister Nirmala Sitharaman announced that the Centre will work on developing a “taxonomy for climate finance” in the country.

She said, “This will support achievement of the country’s climate commitments and green transition.”

A taxonomy for climate finance, according to the European Union’s definition of the term, “is a classification system that defines criteria for economic activities that are aligned with a net zero trajectory by 2050 and the broader environmental goals other than climate.”

‘Important Classifications’: Experts on Climate Finance Taxonomies

To put it in simpler terms, Kavin Kumar Kandasamy, CEO, ProClime, a unified service provider in the climate space, explains that a taxonomy is a set of classifications of certain verticals under key terminologies.

For instance, if we develop a taxonomy, something like ‘emissions under management’ would be standardised and mean exactly the same thing wherever you go in the country. “It enables a free flow of climate economics,” says Kandasamy.

"The European and American markets, which is primarily where the capital markets are based, have very clear common structures. It is important to look at them and see how much of the wheel does not have to be reinvented at this point. So we should look at these global markets and see which ones we’re aligned to, which ones we can work closely with from India’s Nationally Determined Contribution perspective, and biological engagement."

-Kavin Kandasamy

‘A People Centric Approach to Climate Finance Taxonomy Is the Future’

Will something like developing a taxonomy for climate finance have an impact on the common person? Will it ease the repercussions of the climate crisis that we live with every day?

Kandasamy tells The Quint, “It won’t impact people unless the taxonomy brings about a climate budget that is very involved in everyday life.”

News Article Link: https://www.thequint.com/climate-change/union-budget-climate-change-taxonomy-finance-nirmala-sitharaman-explained