Global green finance faces setbacks, experts warn

At the Raisina Dialogue 2025 in New Delhi, experts discussed the future of global green finance. The panel included Jayant Sinha from Eversource Capital and Alok Sharma, the former COP26 president. They explored how changing energy policies and geopolitical tensions are affecting climate action worldwide. The session highlighted concerns over trade barriers and energy security. The United States is once again focusing on fossil fuels, which has led to doubts about its commitment to green initiatives. Europe is also facing new priorities that could shift attention away from sustainability. Initially, there was hope that private investments would increase in green projects. However, the recent trends show a decrease in enthusiasm. Protectionist policies and trade conflicts are shaping decisions, making it harder to achieve large-scale green financing. Sinha emphasized that for India, moving towards green energy is essential for both economics and survival. He mentioned India's potential for solar energy, which is becoming cheaper than coal. He stressed that India spends about $200 billion on fossil fuel imports annually, making a shift to renewables a wise choice. The panel agreed that international cooperation is vital but acknowledged the need for reforms in financial and regulatory frameworks. Sharma pointed out that despite geopolitical challenges, many countries successfully negotiated climate agreements in the past. Financing for green projects remains a significant hurdle. Sharma mentioned that trillions of dollars are needed each year for effective climate action. The private sector's role in mobilizing this capital is essential, and regulatory reforms are necessary to attract investment. India faces a requirement of $50 to $100 billion annually for its clean energy transition. However, the different costs of raising funds in India and abroad deter international investors. Sharma mentioned that integrating climate risk into financial decisions could help direct investments toward sustainable projects. The global energy security challenge was another major topic. While investments in clean energy are rising, fossil fuel investments still dominate globally. Last year, around $2 trillion went into clean energy, but $1 trillion still supported fossil fuels. The rise of protectionist policies complicates cross-border carbon trading, which is necessary for establishing a global carbon price. The discussions raised critical questions about the future of green finance amid political and economic turmoil and whether global teamwork on climate change can persist despite increasing divisions.