Context:
A recent study by the Council on Energy, Environment and Water (CEEW) and the Natural Resources Defense Council India (NRDC) emphasized the necessity of establishing a green bank in India.
Green Banking:
- A new financing trend where banks shift investment strategies to focus on sustainable technologies and environmentally-friendly initiatives.
- Primary Objectives:
- Protect the environment for future generations.
- Minimize paperwork and concentrate on electronic transactions.
- Gained popularity following the Paris Climate Agreement in 2015 at COP21 of UNFCCC.
- COP29 assured $300 billion annually as climate finance; Global South demanded $1.3 trillion for a ‘Green Bank’.
Green Banks:
- Mission-driven institutions using innovative financing to accelerate the transition to clean energy.
- Promote eco-friendly lending policies at a local level.
- For example: Loans for electric vehicles and home solar electric systems.
- Policies banning investments in harmful industries like fossil fuels.
- Promote environmentally friendly practices and reduce the banking sector’s carbon footprint.
- In India:
- World Bank announced $1.5 billion funding for India to develop energy from low carbon sources.
- State Bank of India (SBI) adopted green banking as a policy and is the first green bank in India, encouraging green energy projects.
Council on Energy, Environment and Water (CEEW):
- Not-for-profit Think Tank and policy institution.
- Based in New Delhi, India.
- Founded in 2010.
- Mission: Identify integrated solutions for balanced growth and development for India.
- Provides independent research-based insights to policymakers for building a sustainable India.
- Funding: Receives funding through donations and grants.
- Research Areas: Energy and resource efficiency and security, Climate risks and adaptation, Air quality, Water resources management, Sustainability finance, Energy-trade-climate linkages, Climate geoengineering governance etc.
Natural Resources Defense Council (NRDC):
- United States-based non-profit international environmental advocacy group.
- Headquartered: New York.
- Founded in 1970.
- More than three million members (nearly700 lawyers, scientists, and other policy experts)
- Scope:
- Engaged in the field of climate change.
- Addresses issues related to environment, natural resources, and energy conservation.
Source: DTE
Previous Year Question
Which one of the following activities of the Reserve Bank of India is considered to be part of ‘sterilization’?
[UPSC Civil Service Exam – 2023 Prelims]
(a) Conducting “Open Market Operations’
(b) Oversight of settlement and payment systems
(c) Debt and cash management for the Central and State Governments
(d) Regulating the functions of Non-banking Financial Institutions
Answer: (a)