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Q40 (CDS-I/2026) Environment & Ecology › Climate Change & Global Initiatives

The financial instruments that generate proceeds for investment in environmentally sustainable and climate-suitable projects are called as :

Result
Your answer: —  Â·  Correct: A

Explanation

Green Bonds are fixed-income financial instruments specifically designed to raise funds for projects that have positive environmental and climate benefits. According to the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI), the proceeds from these bonds are earmarked for projects like renewable energy, energy efficiency, sustainable waste management, and clean transportation.

  • Social Impact Bonds are outcome-based contracts where private investors fund social services, and the government repays them only if specific social outcomes (e.g., improved literacy) are achieved.
  • Carbon Bonds and Climate Credit Bonds are not standard financial terms; rather, "Carbon Credits" or "Carbon Offsets" are used in the context of emissions trading.

In 2023, the Government of India issued its first Sovereign Green Bonds (SGrBs) to mobilize resources for green infrastructure, aligning with its 'Panchamrit' climate action goals.

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