# Sustainable Development and Green Finance for UPSC: NDCs, CCTS Carbon Market, Article 6, Sovereign Green Bonds and COP28-COP30 Source: https://tracknation.in/story/sustainable-development-and-green-finance-for-upsc-ndcs-ccts-carbon-market-article-6-sovereign-green-bonds-and-cop28-cop30 (TrackNation β€” free UPSC notes with PYQs) > Sustainable development and green finance for UPSC β€” SDGs, India's NDC targets (45% intensity, 50% non-fossil capacity, 2.5-3.0 billion tonne sink), LT-LEDS and net zero 2070, the CCTS compliance and offset mechanisms, Article 6.2/6.4/6.8, sovereign green bonds (β‚Ή72,697 crore), the climate-finance gap and COP28, COP29 and COP30 β€” with Survey 2025-26 data, practice questions, real PYQs and exact Mains questions. ## Sustainable Development: The Idea, the SDGs and India's Position 🎯 **Exam priority: Tier-3 on the economy side β€” but green finance is the fastest-rising corner of the paper.** *Climate and sustainability questions used to sit in Environment; they now arrive wearing economic clothes. The 2023 paper asked whether carbon markets are a widespread climate tool, the 2024 paper the EU's Net-Zero Industry Act, the 2025 paper Article 6 of the Paris Agreement, CO2 per capita and the COP28 health declaration, and the 2026 paper India's LT-LEDS, sustainability bonds and green hydrogen. Mains asked in 2025 for a review of India's Paris commitments and the 2022 NDC update. Learn the architecture (SDGs, NDCs, Article 6), the instruments (CCTS, green bonds) and the numbers.* ## Sustainable development: the idea and the SDGs - **The NCERT idea.** The environment performs four functions: it **supplies resources**, **absorbs waste**, sustains life (genetic and biodiversity services) and provides aesthetic services. Trouble starts when extraction exceeds regeneration or waste exceeds the environment's **absorptive capacity**. **Sustainable development** is development that meets the needs of the present without compromising the ability of future generations to meet theirs (the Brundtland Commission's formulation); it rests on limiting population within the earth's carrying capacity, input-efficient technology, renewable resources used at a sustainable rate, and correcting pollution. - **The SDGs.** In 2015 the UN adopted **17 Sustainable Development Goals** as the 2030 Agenda; they trace to the 2012 Rio+20 conference, not to the Club of Rome's 1972 report (a 2016 Prelims trap). The **Kyoto Protocol (1997)** was the earlier emissions treaty that bound industrialised countries. - **India against the SDGs.** Two scorecards are regularly confused. The global **Sustainable Development Report** (SDSN) placed India 99th of 167 countries in 2025 with a score of 67 β€” its first entry into the top 100. NITI Aayog's domestic **SDG India Index 2023-24** ranks States and UTs: national score 71, with Kerala and Uttarakhand at 79 and Bihar the lowest at 57. *(These two figures come from the published reports rather than the Survey.)* - **The Survey's stance.** India's per-capita emissions are low β€” **2.9 tonnes** of GHG per person in 2024 against a world average of 6.7 β€” and the Survey argues that **"development is, in itself, a form of adaptation"**: health systems, resilient infrastructure, farm productivity and reliable energy protect people as much as emission cuts do. It stresses sequencing, citing the 28 April 2025 grid disruption in Spain and Dutch grid congestion (nearly 14,000 firms waiting for connections) as warnings that renewables must come with storage, transmission and firm power. ## NDCs, Net Zero and the COP Series The climate regime is a ladder: framework convention, binding then voluntary targets, national pledges, rules for markets and money. ## NDCs, net zero and where India stands - **The sequence.** UNFCCC (1992) β†’ **Kyoto Protocol (1997)** with binding cuts for developed countries and the **Clean Development Mechanism** β†’ **Paris Agreement (2015)**, where every country files a **Nationally Determined Contribution** (the 2015 'INDC' becomes an NDC on ratification). Paris aims to hold warming well below 2 Β°C and pursue 1.5 Β°C; developed countries pledged USD 100 billion a year from 2020 (not USD 1,000 billion, a 2016 trap). - **India's pledges.** At **COP26 Glasgow (2021)** India announced the five-part **Panchamrit**: 500 GW of non-fossil capacity by 2030; half of energy needs from renewables by 2030; one billion tonnes less projected emissions by 2030; a 45% fall in carbon intensity; and **net zero by 2070**. The **updated NDC (August 2022)** turned these into targets for 2030: cut the **emissions intensity of GDP by 45% from the 2005 level**; about **50% of cumulative installed power capacity from non-fossil sources**; and an additional carbon sink of **2.5-3.0 billion tonnes of CO2-equivalent**. The **Long-Term Low Emission Development Strategy (LT-LEDS)** was submitted at COP27 (Sharm el-Sheikh, November 2022) and sets out the route to the 2070 goal. *(These stable facts are cross-checked outside the saved reports.)* - **Progress, per the Survey and the MoEFCC.** Emissions intensity of GDP fell **36% between 2005 and 2020**. The 50% non-fossil capacity target was met in **June 2025**, five years early; by December 2025 non-fossil capacity was **51.93%**, with 38.61 GW of renewables added in 2025-26 so far, and on IRENA's 2025 statistics India ranks **fourth** in installed renewable capacity (after China, the USA and Brazil) β€” rankings depend on the source and definition, so check which one a question cites (Article 22 uses the Ministry's tallies, and counts renewables at 49.83% of capacity; the 51.93% here is the wider non-fossil share, which includes nuclear). Forests and trees hold 30.43 billion tonnes of CO2-equivalent, an **additional sink of 2.29 billion tonnes** since 2005 β€” short of the 2.5-3.0 target. - **The inventory.** India's **4th Biennial Update Report** (BUR-4, submitted 30 December 2024) puts 2020 emissions at **2,959 million tonnes** of CO2e (2,437 net after land use); energy contributes 75.66%, agriculture 13.72%; forests and other land sequester about 522 million tonnes of CO2, offsetting roughly 22%. Net emissions including land use were **7.93% lower than in 2019** β€” a pandemic-year dip (the 2026 PYQ below rests on it). ## The COP series: what each meeting settled | **Conference** | **What to remember** | | COP26, Glasgow (2021) | India's Panchamrit and 2070 net-zero pledge; Mission LiFE introduced; the Green Grid Initiative (One Sun One World One Grid) with the International Solar Alliance | | COP27, Sharm el-Sheikh (2022) | India submitted its LT-LEDS; a Loss and Damage fund agreed in principle | | COP28, Dubai (2023) | First Global Stocktake; the UAE Consensus calls for transitioning away from fossil fuels in energy systems; pledge to triple renewable capacity and double energy efficiency by 2030; Loss and Damage Fund operationalised | | COP29, Baku (2024) | New Collective Quantified Goal: developed countries to lead in mobilising at least USD 300 billion a year by 2035 within a wider USD 1.3 trillion aim; standards for Article 6.4 carbon markets adopted | | COP30, Belem (2025) | Per the Survey, a decision on Article 9.1 of the Paris Agreement (developed countries' duty to provide finance) set up a two-year work programme, shifting focus back to obligations rather than private investment counted as climate finance | ## Carbon Markets: From PAT to the CCTS and Article 6 A carbon market puts a price on emissions and lets the cheapest reductions happen first. India has built one in stages, from energy-efficiency certificates to a full compliance market. ## From PAT to the Carbon Credit Trading Scheme - **PAT (2012).** The **Perform, Achieve and Trade** scheme gave industrial units energy-saving targets; those that beat them earned tradable **Energy Saving Certificates (ESCerts)**. It was a market for *energy saved*, not for emissions. - **CCTS (adopted June 2023).** The **Carbon Credit Trading Scheme** is a dual mechanism. The **compliance mechanism** sets *emission-intensity* targets (not an absolute cap) for energy-intensive sectors using a baseline-and-credit system: an entity that beats its target earns **Carbon Credit Certificates (CCCs)**, each one tonne of CO2-equivalent, tradable on power exchanges; one that misses must buy and surrender credits. It builds on PAT's infrastructure. In 2025 targets were notified for **aluminium, cement, chlor-alkali and pulp and paper**. The **offset mechanism** lets non-obligated entities voluntarily register projects that reduce, remove or avoid emissions across ten approved sectors (energy, industry, agriculture, waste, forestry, transport, fugitive emissions, construction, solvent use and carbon capture). The Bureau of Energy Efficiency is the technical lead. *(The legal base is the Energy Conservation (Amendment) Act, 2022.)* - **Other price tools.** The EU ETS (2005) is the cap-and-trade benchmark, with China's national ETS and Korea's scheme the other big ones. India also runs the world's first **emissions trading market for particulate matter** in **Surat** β€” 317 plants, with participants cutting emissions 20-30% relative to plants under the old rules. The **Green Credit Programme** is different again: it rewards afforestation and the restoration of degraded forest, and credits can be exchanged for compensatory afforestation. Do not mix up CCCs, ESCerts and green credits. - **Mission LiFE** (Lifestyle for Environment), introduced at COP26, is the behavioural arm β€” an 'integral part' of India's NDC β€” and most climate schemes (LED mass adoption, appliance labelling, PAT) fit its ethos. ## Article 6: the global carbon-market rulebook | **Article** | **What it does** | | 6.2 | Bilateral or plurilateral *cooperative approaches*: countries trade internationally transferred mitigation outcomes, with 'corresponding adjustments' to avoid double counting. India and Japan signed a Joint Crediting Mechanism arrangement under Article 6.2 on 7 August 2025 | | 6.4 | A centralised, UN-supervised crediting mechanism β€” the successor to the Kyoto-era Clean Development Mechanism β€” governed by a Supervisory Body; standards were adopted at COP29 | | 6.8 | *Non-market approaches*: cooperation on mitigation, adaptation, finance and technology without trading units | ## Green Finance: The Climate-Finance Gap, Green Bonds and Instruments Climate action is mostly a financing problem. The Survey's central claim is that "plenty of capital, limited risk appetite" β€” the money exists, but it does not flow to the countries that need it, and when it does it is expensive. ## The finance gap in numbers - Developing economies need an estimated **USD 5-6 trillion** for climate action by 2030, and the Seville conference put the overall sustainable-development financing gap at about **USD 4 trillion a year**. Global climate finance reached **USD 1.9 trillion in 2023**, of which about USD 1.3 trillion was private β€” but over half of that private money went to advanced economies, about 30% to China, and only about **15% to all other developing countries**. - **Adaptation is starved.** Developing countries need USD 310-365 billion a year by 2035, while international public adaptation finance is about USD 26 billion. Developed countries reported USD 115.9 billion of climate finance for 2022 against the USD 100 billion goal, but independent estimates put the real figure at only USD 28-35 billion β€” hence the contest over what 'counts'. - **India finances itself.** About **83% of its mitigation finance and 98% of its adaptation finance** comes from domestic sources, and adaptation spending rose from 3.7% of GDP (FY16) to 5.6% (FY22). The Survey argues domestic money alone cannot meet the need and asks for reform of multilateral development banks (from 'originate-to-hold' to 'originate-to-share', using guarantees and blended finance), of credit-rating practice, and of rules such as Basel III and Solvency II that load infrastructure investments in emerging economies with capital charges. ## Green finance instruments at home - **Sovereign Green Bonds (SGrBs).** The Government issues them under a framework released by the Ministry of Finance in 2022 to fund low-carbon public projects. Issuance: β‚Ή15,000 crore in FY26 and a cumulative **β‚Ή72,697 crore since FY23**; the Budget shows β‚Ή21,697.40 crore raised in FY25 against β‚Ή30,274 crore actually spent on eligible schemes (the gap is met from general revenue). Eligible spending includes the National Mission for a Green India, metro projects, the National Green Hydrogen Mission, solar and wind grids, PM Surya Ghar and energy-efficient locomotives; ministries proposed β‚Ή30,941.30 crore of eligible spending for 2026-27, with the amount to be raised notified separately. - **The 'greenium'** β€” the yield advantage of a green bond over a comparable conventional one β€” is only intermittent in India (0-6 basis points) against a stable 2 basis points in the EU, because of thin secondary-market liquidity and small issue sizes. - **Thematic bonds** now include green, blue, yellow, transition, social and sustainability bonds (the 2026 paper asked: a bond funding both environmental and social projects is a *sustainability* bond). Other pieces: the RBI's **green deposit** framework; SEBI's **BRSR** disclosure for large listed companies and green-bond guidelines; **municipal green bonds** by Indore, Ahmedabad, Vadodara and Ghaziabad (up to USD 2.5-6.9 billion could be unlocked over 5-10 years); 100% FDI under the automatic route in renewables; and development lenders such as IREDA, NABARD, SIDBI, PFC and REC. ## Adaptation, Regulation and the Lessons of the Energy Transition ## Adaptation, regulation and the transition's lessons - **The framework.** The **National Action Plan on Climate Change (NAPCC)** sets national missions (solar, enhanced energy efficiency, sustainable habitat, water, Himalayan ecosystem, Green India, sustainable agriculture, strategic knowledge) and States translate them into **State Action Plans on Climate Change**, which since 2020 have shifted from mitigation towards adaptation-led development. Examples the Survey cites: the **MISHTI** mangrove programme (about 540 sq km across nine coastal States and four UTs, 2023-2028), Odisha's Pani Panchayats, and **Ahmedabad** β€” South Asia's first city Heat Action Plan (2013) β€” whose parametric heat insurance costs β‚Ή354 a year and pays β‚Ή750-1,250 when temperatures cross a threshold. - **Regulation is moving from command-and-control to markets and risk.** The Environment (Protection) Act, 1986 (after the Bhopal gas tragedy) sits above the water and air Acts; the EIA Notification, 2006 requires prior clearance; the National Green Tribunal (2010) strengthened enforcement. Newer tools: PAT, the CCTS, the Surat ETS and **Extended Producer Responsibility** (69,116 producers and 4,377 recyclers registered by November 2025). - **The clean-energy scorecard (December 2025).** Solar capacity grew forty-five-fold from 3 GW (2014) to about 135.81 GW; wind stands at 54.51 GW, the world's fourth-highest. Total installed capacity splits roughly: fossil 247 GW, non-hydro renewables 207 GW, hydro 51 GW and nuclear 9 GW. Storage is the next hurdle β€” the Central Electricity Authority estimates a need for 336 GWh of storage by 2029-30 and 411 GWh by 2031-32 β€” and so are critical minerals, where a β‚Ή1,500 crore incentive scheme backs recycling under the National Critical Mineral Mission. India has not yet reached peak energy demand, which is why the Survey frames the task as energy security first and decarbonisation in sequence. - **Sub-national plans.** 34 States have prepared SAPCCs and 16 States and UTs have revised them. - **The energy lesson.** Non-fossil capacity is 51.93%, yet the Survey warns that intermittent renewables need storage, transmission and firm power; it backs hydro and nuclear as long-horizon anchors (a roadmap for **100 GW of nuclear by 2047** and the SHANTI Act), and says a credible, orderly fossil-fuel transition needs predictable international finance and technology. ## How UPSC Could Ask This Next ## How UPSC could ask this next - **The 'which Article / which scheme' stem.** Article 6.2 (bilateral trade of mitigation outcomes) versus 6.4 (UN-supervised crediting mechanism) versus 6.8 (non-market). CCCs under CCTS versus ESCerts under PAT versus green credits under the Green Credit Programme. The 2025 paper asked precisely about Article 6. - **The planted-word stem.** The 2026 AI question changed 'Planet' to 'Planning'; the 2016 Paris question changed USD 100 billion to USD 1,000 billion and 'will come into force in 2016' to 2017. In this topic watch dates (2070 not 2050), money (USD 100 billion, USD 300 billion, USD 1.3 trillion) and percentages (45% intensity; 50% non-fossil capacity β€” not 50% of *energy*). - **The near-miss numbers.** 21,697 (FY25 SGrB) versus 15,000 (FY26) versus 72,697 (cumulative since FY23). 83% of mitigation finance versus 98% of adaptation finance is domestic. 36% fall in intensity (2005-2020) versus the 45% target. 2.29 versus 2.5-3.0 billion tonnes of sink. - **The Statement-I/II stem.** 'Carbon markets are widely used' (true) 'because they transfer resources from private sector to State' (does not explain it) β€” the 2023 paper's pattern. - **Mains angles.** (1) Review India's climate commitments from Paris to the 2022 NDC update and LT-LEDS. (2) Is a carbon market suited to a developing economy? (3) Why is climate finance the binding constraint, and what should India demand at the COPs? (4) 'Development is itself adaptation' β€” evaluate. (5) Energy access and the SDGs. ## Further Reading - NCERT Economics textbooks (Class 11–12), the Economic Survey, the Union Budget documents and RBI publications cited in this note β€” the primary sources behind every figure above. ## Test Yourself: Practice Questions and PYQs Twelve practice questions on sustainability, climate pledges, carbon markets and green finance, followed by real UPSC questions (2026 items use the provisional key) and exact Mains questions. ## Practice Questions **Q1.** In the framework of environment and economy, the 'absorptive capacity' of the environment means - (a) the rate at which non-renewable resources can be extracted - (b) the ability of the environment to absorb degradation - (c) the maximum population that a country can support - (d) the ability of the environment to regenerate renewable resources **Answer: (b)** β€” Absorptive capacity is the ability of the environment to absorb degradation and waste. Trouble begins when waste generation outruns it or extraction outruns regeneration. **Q2.** Consider the following statements about India's updated Nationally Determined Contribution (2022): 1. It targets a 45 per cent reduction in the emissions intensity of GDP by 2030 from the 2005 level. 2. It targets about 50 per cent cumulative installed electric power capacity from non-fossil fuel sources by 2030. 3. It targets an additional carbon sink of 2.5-3.0 billion tonnes of CO2 equivalent by 2030. 4. It commits India to net-zero emissions by 2050. How many of the statements given above are correct? - (a) Only two - (b) Only one - (c) Only three - (d) All four **Answer: (c)** β€” Statements 1-3 are the three headline targets of the updated NDC. The net-zero year in India's long-term strategy is 2070, not 2050. **Q3.** According to the Economic Survey 2025-26, India's per-capita greenhouse gas emissions for 2024 were estimated at about - (a) 4.5 tonnes against a global average of 4.5 tonnes - (b) 2.9 tonnes against a global average of 6.7 tonnes - (c) 6.7 tonnes against a global average of 2.9 tonnes - (d) 0.5 tonnes against a global average of 4.0 tonnes **Answer: (b)** β€” India emits about 2.9 tonnes of GHG per person, well below the 6.7-tonne world average β€” the basis of India's argument on differentiated responsibility. **Q4.** Consider the following statements about India's Carbon Credit Trading Scheme (CCTS): 1. It operates through a compliance mechanism and a voluntary offset mechanism. 2. The compliance mechanism sets emission-intensity targets for obligated entities, with surplus performance earning tradable Carbon Credit Certificates. 3. The offset mechanism is open only to entities that are obligated under the compliance mechanism. Which of the statements given above are correct? - (a) 2 and 3 only - (b) 1, 2 and 3 - (c) 1 and 3 only - (d) 1 and 2 only **Answer: (d)** β€” Statements 1 and 2 are correct. The offset mechanism is for non-obligated entities who voluntarily register projects; statement 3 reverses this. **Q5.** Energy Saving Certificates (ESCerts) are tradable instruments created under which scheme? - (a) The Green Credit Programme - (b) The Sovereign Green Bond framework - (c) The Carbon Credit Trading Scheme - (d) The Perform, Achieve and Trade (PAT) scheme **Answer: (d)** β€” ESCerts come from PAT (2012) and certify energy saved beyond a target. Carbon Credit Certificates belong to the CCTS, and green credits reward afforestation β€” the three are easy to confuse. **Q6.** With reference to Article 6 of the Paris Agreement, consider the following statements: 1. Article 6.2 provides for bilateral or plurilateral cooperative approaches involving the transfer of mitigation outcomes between countries. 2. Article 6.4 establishes a centralised crediting mechanism under the supervision of a UN body. 3. Article 6.8 provides for market-based trading of emission credits. How many of the statements given above are correct? - (a) Only one - (b) Only two - (c) All three - (d) None **Answer: (b)** β€” Statements 1 and 2 are correct. Article 6.8 covers non-market approaches β€” cooperation without trading units. **Q7.** According to the Economic Survey 2025-26, the cumulative issuance of sovereign green bonds in India since FY23 stood at about - (a) β‚Ή72,697 crore - (b) β‚Ή1,00,000 crore - (c) β‚Ή15,000 crore - (d) β‚Ή21,697 crore **Answer: (a)** β€” The cumulative figure is β‚Ή72,697 crore, including β‚Ή15,000 crore issued in FY26. β‚Ή21,697 crore was the FY25 issuance β€” the near-miss number. **Q8.** In the context of sovereign green bonds, the 'greenium' refers to - (a) the yield advantage of a green bond over a comparable conventional bond - (b) the premium paid on carbon credits traded on power exchanges - (c) the guarantee fee charged by multilateral development banks - (d) the extra tax levied on companies that pollute **Answer: (a)** β€” Greenium is the lower yield (cheaper borrowing) a green bond can achieve compared with an equivalent conventional bond. In India it has been intermittent, about 0-6 basis points. **Q9.** According to the Economic Survey 2025-26, what share of India's finance for climate adaptation is sourced domestically? - (a) 38 per cent - (b) 98 per cent - (c) 58 per cent - (d) 83 per cent **Answer: (b)** β€” About 98 per cent of adaptation finance and about 83 per cent of mitigation finance is domestic. The 83 per cent figure is the mitigation near-miss. **Q10.** At the COP29 climate conference in Baku (2024), developed countries agreed to take the lead in mobilising at least how much a year for developing countries by 2035 under the New Collective Quantified Goal? - (a) USD 100 billion - (b) USD 200 billion - (c) USD 300 billion - (d) USD 1.3 trillion **Answer: (c)** β€” At least USD 300 billion a year by 2035. USD 1.3 trillion is the wider aim for all public and private sources; USD 100 billion was the earlier goal for 2020-2025. **Q11.** Consider the following statements about COP28 (Dubai, 2023): 1. It concluded the first Global Stocktake of the Paris Agreement. 2. Its outcome called for transitioning away from fossil fuels in energy systems. 3. It operationalised a Loss and Damage Fund. 4. It agreed a binding global phase-out of coal by 2030. How many of the statements given above are correct? - (a) Only two - (b) Only one - (c) All four - (d) Only three **Answer: (d)** β€” Statements 1, 2 and 3 are correct. COP28 asked countries to transition away from fossil fuels in an orderly way; it set no binding coal phase-out date. **Q12.** According to the Economic Survey 2025-26, Mission LiFE (Lifestyle for Environment) was introduced in 2021 at which international conference? - (a) COP21 in Paris - (b) COP26 in Glasgow - (c) COP27 in Sharm el-Sheikh - (d) COP28 in Dubai **Answer: (b)** β€” The Survey records that Mission LiFE was introduced in 2021 at COP26 in Glasgow and is an integral part of India's NDC. ### UPSC Previous Year Questions (PYQs) *Real UPSC Prelims questions, checked against the official paper and answer key. 2026 items use the provisional key and are marked in the explanation.* **Q1.** (2016) Consider the following statements: 1. The Sustainable Development Goals were first proposed in 1972 by a global think tank called the 'Club of Rome'. 2. The Sustainable Development Goals have to be achieved by 2030. Which of the statements given above is/are correct? - (a) Both 1 and 2 - (b) Neither 1 nor 2 - (c) 2 only - (d) 1 only **Answer: (c)** β€” The Sustainable Development Goals came out of the 2012 Rio+20 conference and were adopted by the UN in 2015 as the 2030 Agenda; the Club of Rome's 1972 report was 'The Limits to Growth', not the SDGs (statement 1 is wrong). The goals are to be achieved by 2030 (statement 2 is right). **Q2.** (2025) Consider the following statements: Statement I: Article 6 of the Paris Agreement on climate change is frequently discussed in global discussions on sustainable development and climate change. Statement II: Article 6 of the Paris Agreement on climate change sets out the principles of carbon markets. Statement III: Article 6 of the Paris Agreement on climate change intends to promote inter-country non-market strategies to reach their climate targets. Which one of the following is correct in respect of the above statements? - (a) Neither Statement II nor Statement III is correct - (b) Only one of the Statements II and III is correct and that explains Statement I - (c) Both Statement II and Statement III are correct but only one of them explains Statement I - (d) Both Statement II and Statement III are correct and both of them explain Statement I **Answer: (d)** β€” Article 6 of the Paris Agreement lets countries cooperate to meet their climate targets: 6.2 and 6.4 set the rules for international carbon markets and 6.8 provides for non-market approaches. So statements II and III are both correct, and each is a reason the Article is so often discussed. **Q3.** (2024) Consider the following statements: Statement-I: The European Parliament approved the Net-Zero Industry Act recently. Statement-II: The European Union intends to achieve carbon neutrality by 2040 and therefore aims to develop all of its own clean technology by that time. Which one of the following is correct in respect of the above statements? - (a) Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I - (b) Both Statement-I and Statement-II are correct and Statement-II explains Statement-I - (c) Statement-I is correct, but Statement-II is incorrect - (d) Statement-I is incorrect, but Statement-II is correct **Answer: (c)** β€” The European Parliament approved the Net-Zero Industry Act in 2024, so statement I is right. The EU's climate-neutrality target is 2050, not 2040, and the Act aims for a large domestic share of clean-technology manufacturing by 2030 rather than all of it, so statement II is wrong. **Q4.** (2026) Consider the following statements with reference to India's response to climate change: I. India's Long-Term Low Emission Development Strategy (LT-LEDS) is a crucial tool for achieving net-zero emissions by 2070. II. India's 4th Biennial Update Report (BUR-4) submitted in December, 2024 recorded around 8% decrease in Greenhouse gas emissions in 2020 over 2019. III. Climate-resilient development necessarily depends on quick and short-term achievement of emission reduction targets. Which of the following relationships among the above statements is/are correct? 1. Statement I is empirically supported by statement II. 2. Statement III contradicts the approach implicit in statement I. 3. Statement I and statement III together establish the premise of long-term sustainability. Select the answer using the code given below: - (a) 1 and 2 - (b) 1 only - (c) 3 only - (d) 2 and 3 **Answer: (a)** β€” India's Long-Term Low Emission Development Strategy backs the 2070 net-zero goal, and the fourth Biennial Update Report recorded a fall of roughly 8 per cent in emissions in 2020 over 2019, which gives statement I some empirical support. Statement III β€” that resilience needs quick, short-term cuts β€” runs against the long-term logic of statement I. So relationships 1 and 2 hold. (Based on the provisional 2026 key.) **Q5.** (2016) The term 'Intended Nationally Determined Contributions' is sometimes seen in the news in the context of - (a) pledges made by the European countries to rehabilitate refugees from the war-affected Middle East - (b) capital contributed by the member countries in the establishment of Asian Infrastructure Investment Bank - (c) plan of action outlined by the countries of the world regarding Sustainable Development Goals - (d) plan of action outlined by the countries of the world to combat climate change **Answer: (d)** β€” Intended Nationally Determined Contributions were the climate plans of action that each country submitted before the 2015 Paris conference; once a country ratifies the Agreement, the INDC becomes its NDC. They are about climate action, not refugees, AIIB capital or the SDGs. **Q6.** (2016) With reference to the Agreement at the UNFCCC Meeting in Paris in 2015, which of the following statements is/are correct? 1. The Agreement was signed by all the member countries of the UN and it will go into effect in 2017. 2. The Agreement aims to limit greenhouse gas emissions so that the rise in average global temperature by the end of this century does not exceed 2 Β°C or even 1.5 Β°C above pre-industrial levels. 3. Developed countries acknowledged their historical responsibility in global warming and committed to donate $ 1000 billion a year from 2020 to help developing countries to cope with climate change. Select the correct answer using the code given below. - (a) 1, 2 and 3 - (b) 2 only - (c) 2 and 3 only - (d) 1 and 3 only **Answer: (b)** β€” The Agreement was adopted in December 2015 and came into force in November 2016 after enough countries ratified it, so statement 1 is wrong. Statement 2 is right: the long-term goal is to hold warming well below 2 Β°C and pursue 1.5 Β°C. Developed countries committed to mobilise USD 100 billion a year from 2020, not USD 1,000 billion, so statement 3 is wrong. **Q7.** (2020) Which one of the following statements best describes the term 'Social Cost of Carbon'? It is a measure, in monetary value, of the - (a) contribution of an individual person to the carbon footprint on the planet Earth. - (b) efforts put in by a climate refugee to adapt to live in a new place. - (c) requirement of fossil fuels for a country to provide goods and services to its citizens, based on the burning of those fuels. - (d) long-term damage done by a tonne of CO2 emissions in a given year. **Answer: (d)** β€” The Social Cost of Carbon is the monetary value of the damage done by emitting one more tonne of CO2 in a given year; governments use it to price carbon in cost-benefit analysis. It is not a fossil-fuel requirement, a refugee's adaptation effort or an individual's carbon footprint. **Q8.** (2023) Consider the following statements: Statement-I: Carbon markets are likely to be one of the most widespread tools in the fight against climate change. Statement-II: Carbon markets transfer resources from the private sector to the State. Which one of the following is correct in respect of the above statements? - (a) Statement-I is correct but Statement-II is incorrect - (b) Statement-I is incorrect but Statement-II is correct - (c) Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I - (d) Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I **Answer: (d)** β€” Statement I is right: carbon markets, in which emissions are priced and credits are traded, are widely seen as a main tool against climate change. Statement II is also accepted as correct by the key β€” payments for allowances and credits flow from emitters to the sellers, including State-run programmes β€” but it does not explain why markets are widespread, so the answer is (d). **Q9.** (2023) Consider the following heavy industries: 1. Fertilizer plants 2. Oil refineries 3. Steel plants Green hydrogen is expected to play a significant role in decarbonizing how many of the above industries? - (a) Only two - (b) None - (c) All three - (d) Only one **Answer: (c)** β€” Green hydrogen can replace grey hydrogen made from natural gas in fertiliser (ammonia) plants and in refineries, and can be a reducing agent in steel making in place of coking coal. So it can decarbonise all three industries. **Q10.** (2025) Consider the following statements: I. Carbon dioxide (CO2) emissions in India are less than 0.5 t CO2/capita. II. In terms of CO2 emissions from fuel combustion, India ranks second in Asia-Pacific region. III. Electricity and heat producers are the largest sources of CO2 emissions in India. Which of the statements given above is/are correct? - (a) I and III only - (b) I, II and III - (c) II only - (d) II and III only **Answer: (d)** β€” India's per-capita CO2 emissions are well above 0.5 tonnes (statement I is wrong). From fuel combustion India is the second-largest emitter in the Asia-Pacific region after China (II is right), and electricity and heat producers are the largest source (III is right). **Q11.** (2022) "Climate Action Tracker" which monitors the emission reduction pledges of different countries is a: - (a) Wing of "International Panel of Climate Change" - (b) Database created by coalition of research organisations - (c) Agency promoted and financed by United Nations Environment Programme and World Bank - (d) Committee under "United Nations Framework Convention on Climate Change" **Answer: (b)** β€” The Climate Action Tracker is an independent scientific database maintained by a coalition of research organisations; it rates countries' emission-reduction pledges against the Paris goals. It is not part of the IPCC, the UNFCCC or UNEP. **Q12.** (2026) A bond whose proceeds are used only to finance or refinance a combination of both environmental and social projects is called: - (a) Sustainability Bond - (b) Green Bond - (c) Social Bond - (d) Sovereign Bond **Answer: (a)** β€” A bond whose proceeds fund a mix of environmental and social projects is a sustainability bond. A green bond funds only environmental projects, a social bond only social ones, and 'sovereign bond' just describes the issuer. India's Survey lists green, blue, yellow, transition, social and sustainability bonds in its thematic-bond framework. ### Mains Practice Questions Use these to frame full-length answers. You don't have to answer one exactly β€” they show the angles UPSC tests, so let them guide which points you cover. - Write a review of India's climate commitments under the Paris Agreement (2015), how they were strengthened at COP26 (2021) and how the first NDC was updated in 2022. - Explain the design of India's Carbon Credit Trading Scheme. How does it differ from the PAT scheme and from the global Article 6 mechanisms, and is a carbon market suited to a developing economy? - Why is climate finance the binding constraint for developing countries? Assess the role of sovereign green bonds, green deposits and multilateral development banks. - 'Development is, in itself, a form of adaptation.' Examine this view in the context of India's climate strategy. - 'Access to affordable, reliable, sustainable and modern energy is the sine qua non to achieve the Sustainable Development Goals.' Comment on India's progress. ### UPSC Mains β€” Previous Years’ Questions on this topic (last 10 years) These are the **actual GS Mains questions** UPSC has asked on this theme β€” real proof of how, and when, it is tested. Try to write a full answer to each. - 2025 (GS-III): Write a review on India's climate commitments under the Paris Agreement (2015) and mention how these have been further strengthened in COP26 (2021). In this direction, how has the first Nationally Determined Contribution intended by India been updated in 2022? - 2023 (GS-III): The adoption of electric vehicles is rapidly growing worldwide. How do electric vehicles contribute to reducing carbon emissions and what are the key benefits they offer compared to traditional combustion engine vehicles? - 2022 (GS-III): Discuss global warming and mention its effects on the global climate. Explain the control measures to bring down the level of greenhouse gases which cause global warming, in the light of the Kyoto Protocol, 1997. - 2021 (GS-III): Describe the major outcomes of the 26th session of the Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC). What are the commitments made by India in this conference? - 2021 (GS-III): Explain the purpose of the Green Grid Initiative launched at World Leaders Summit of the COP26 UN Climate Change Conference in Glasgow in November, 2021. When was this idea first floated in the International Solar Alliance (ISA)? - 2018 (GS-III): "Access to affordable, reliable, sustainable and modern energy is the sine qua non to achieve Sustainable Development Goals (SDGs)." Comment on the progress made in India in this regard. - 2017 (GS-III): 'Climate change' is a global problem. How India will be affected by climate change? How Himalayan and coastal states of India will be affected by climate change?