According to a recent study by Standard Chartered, a financial services company, India will need to spend atleast $12.4 trillion to achieve its net-zero long-term objectives by 2060. Furthermore, the report showed if the total expense is self financed than in such case India’s household spending could decline by $5.8 trillion, which is even larger than the India’s GDP.
According to the analysis, emerging economies as a whole will need to spend an additional $94.8 trillion to meet their long-term global warming objectives in a timely manner.
However, if the money comes from outside the country, let’s say, comes from developed countries, which have a high obligation to cause of the problem of climate change in the first place. Then the expenditure of the Indian family can increase to $ 7.9 trillion. According to the analysis, India will have to spend $8.5 trillion on electricity to meet its climate goals.
The government would need to invest $6 trillion in energy efficiency (including industry, transportation and buildings). $573.3 billion in initial scrappage and heating subsidies and $2.7 trillion in offsets (carbon tax, home heating tax, etc.).
According to the report, emerging market self-financing will result in higher taxes and government borrowing, leaving some of the world’s poorest people with less money to spend on necessities.
“The stakes have never been higher for emerging countries if they attempt to go net-zero. The success of an emerging market can be delayed or reversed without the help of developed countries.
Between now and 2060, the developing market could reduce household consumption by as much as $79.2 trillion. If developed markets pay for the change, spending in emerging markets could rise to an average of $1.7 trillion a year, spurring global growth to $108.3 trillion between now and 2060.
This study looks at how to close the transition financing gap for emerging markets. According to the analysis, private investors could contribute $83 trillion out of the required $94.8 trillion, highlighting the critical need for financial institutions to meet green and transition financing promises.