Leveraging international capital flows for India’s green recovery and clean energy transition

COVID-19 induced economic recession in India has created an urgent need to ramp up investments and create much-needed jobs. As the country looks to enhance economic activity, investing in green projects can support India’s move to a low-carbon pathway. But, can green investments help economic recovery and create more
jobs? And, where will the financing for these projects come from?

Investment Opportunity

A clean energy transition in India is a massive investment opportunity that can spur a green recovery and fight climate change. Achieving India’s climate targets will need a whopping $834 billion in investment. Multi-country studies show that investments in clean energy and connectivity infrastructure will have not just high positive impact on climate but also have a high multiplier impact on economic growth.

Initially, clean energy infrastructure (like building retrofits and building wind turbines, restoring wetlands) is labor-intensive. Consequently, they impart high short-run economic multipliers. As the operation and maintenance of more productive renewable technologies becomes less labor intensive, productivity rises and energy cost savings are passed to the wider economy, it gives high long-run multipliers.

At times, the higher initial investment compared to traditional projects may tilt the scale against green projects. However, long-term economic and climate benefits of green projects more than compensate for the lower initial costs of environmentally unsustainable projects.

ET Energy World
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