Publication Type: Reports

The Regulatory and Market Landscape for Climate Finance Into India’s Renewable Energy Sector

Executive summary

India’s clean energy landscape has developed rapidly over the last decade, enabled by an improving policy and regulatory architecture. Nevertheless, challenges remain that have impacted the scale and direction of climate finance flows to this sector, particularly from international sources. As India aims to further ramp up the pace of its RE deployment, both large- and small-scale, this brief analyzes these challenges from regulatory, institutional mandate, coordination and market development angles, and explores ways to address them.

Based on a literature review and 13 expert interviews in the large scale renewable energy, rooftop solar, and energy efficiency sectors, we find that regulatory challenges are relatively minor in the large scale RE sector, and that this may cause international funders to channel finance accordingly. In other words, the established governance structure facilitates a relatively easy flow of climate finance. On the other hand, the small scale renewables and energy efficiency sectors have received comparatively less policy support, and a lack of awareness and scale contributes to considerably less funding flowing to these sectors.

Overall, while the government has an important role to play in continuing to improve the policy and regulatory environment for clean energy finance – including international flows into the country – there is an equal role for funders to adapt their funding processes and scopes to the domestic context. Harmonizing these parallel efforts will require improved coordination between the various actors, including through more defined processes for consultations within the overall institutional architecture for climate action in India.

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Energy Transitions Preparedness Initiative: Buildings Sector

Executive Summary

  • India’s buildings sector will play a critical role in meeting the country’s climate targets while promoting resilient cities (IEA 2021b). Buildings also represent the demand side of the energy transition, which is otherwise generally dominated by discourses on the supply side. The sector is undergoing clean energy transition while also contributing to it. Urgent political attention and coordinated action between national and sub-national actors across the buildings value chain are needed if energy transition goals must be achieved in a cost-effective and timely manner.

  • The Energy Transition Preparedness Initiative (ETPI) provides a framework to study and understand state-level plans, actions, and governance processes towards energy transition. The framework covers multiple themes in 24 indicators, representing crucial aspects of energy transition in the electricity, buildings, and transport sectors. The buildings sector covers many themes across five indicators.

  • Buildings are a state subject and therefore energy transition actions in the sector must be studied at the state level. Evidence suggests that buildings are contributing to national and state-level energy transition goals in many ways. There are examples of effective and ambitious policy initiatives with varying scales of action to facilitate transition. Despite the progress, greater efforts are required to implement stated policies in order to achieve the sector’s transition objectives.

  • This study aims to understand the energy transition preparedness of the buildings sector of 10 states in India and highlights good examples from the states. Drawing on information available in the public domain, it sheds light on the level of energy transition preparedness in these states for FY 2020-21.

  • This report studies energy transition preparedness across multiple states, facilitates cross learning between them, and promotes adoption of approaches suitable to their specific contexts.

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Sustainable Solutions to Crop Residue Burning and Air Pollution Cycle in India and Pakistan

Introduction

Crop residue burning (CRB), or stubble burning, is common across much of India and Pakistan. Its prevalence is most highly concentrated in the agricultural belts of the Indo-Gangetic Plain (IGP) that straddles both nations. This region contributes substantially to both nations’ agricultural productivity and food security, primarily through growing staple crops, rice and wheat. While CRB occurs sporadically in different parts of both countries throughout the year, the seasonal burning occurring annually between October and November, coupled with unfavorable meteorological conditions in the IGP, results in extreme air pollution across the whole region. The byproduct of a short transition between growing seasons, the particulate matter (PM2.5) released as a result of CRB in the North-east of Pakistan and North-west of India is carried downwind to other parts of the IGP, with substantial focus afforded to the impact it has on the air quality of India’s National Capital Region due to prevailing low winds and colder temperatures. The PM2.5 levels measured in the region during this period routinely exceed World Health Organization guidelines for acceptable levels of exposure by 20-100 times, causing a public health emergency.

This chapter aims to unpack the scope of CRB across both countries, understand the proximal and distal causes, current policy interventions, and how both countries could sustainably address this issue in the long run.

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