India’s Draft Climate Finance Taxonomy
The Ministry of Finance released India’s draft Climate Finance Taxonomy with the aim of mobilizing climate-aligned investments, preventing greenwashing, and clarifying which sectors, technologies, and practices contribute to mitigation, adaptation, or transition. It is designed as a “living” framework, adaptable to India’s evolving priorities and international obligations.
- The taxonomy includes a proposed review mechanism inspired by the Paris Agreement’s Article 6.4 Mechanism.
Significance and Impact
- Aligned with critical developments in India’s climate finance ecosystem, including the Carbon Credit Trading Scheme and green bonds.
- A strong taxonomy is essential for supporting India’s climate goals and ensuring effective investment alignment.
