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Q.Read the following text carefully : Growing carbon footprint of industries have put power and steel sector in the spotlight as the major contributor to the climate crisis. The challenge of climate change can be tackled only by making our industries and businesses follow practices and processes that reduce their carbon footprint. It can be possible only with green financing. Green financing aims to increase the level of financial flows (from banking, micro-credit, insurance and investment) from the public, private and not-for-profit sectors to sustainable development priorities. Global green finance has also started chasing Indian companies. Global development finance institutions and funds are ready to offer long-term support (both equity and debt) at cheap rates to projects like solar energy and hydropower. Green finance can positively affect environment quality, economic development and financial issues that promote the green economy, such as reducing greenhouse gas emissions, improving energy efficiency or enhancing the organic economy. On the basis of the given text and common understanding, answer the following questions :

(a) State the meaning and objective of green finance.
(b) Discuss any two benefits of green financing.
CBSECBSE Class XII Board 2025Subjective· 6mImportance★★★★★
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Green finance involves directing financial flows towards sustainable development priorities to tackle climate change and promote a green economy, offering benefits like improved environmental quality and fostering sustainable economic development.

The global challenge of climate change, largely driven by industrial carbon footprints, necessitates a shift towards sustainable practices. Green finance emerges as a critical mechanism to facilitate this transition by reorienting financial resources towards environmentally responsible initiatives.

  1. Meaning and Objective of Green Finance Green finance refers to the mobilization and allocation of financial resources from various sectors—public, private, and not-for-profit—towards projects and activities that contribute to sustainable development priorities. This includes financial flows from banking, micro-credit, insurance, and investment. Essentially, it is about making capital available for environmentally friendly investments. The primary objective of green finance is to address environmental challenges, particularly climate change, by encouraging industries and businesses to adopt practices and processes that reduce their carbon footprint. It aims to foster a "green economy" by channeling funds into projects that mitigate greenhouse gas emissions, improve energy efficiency, enhance the organic economy, and generally improve environmental quality. By providing financial incentives and support, green finance seeks to accelerate the transition to a more sustainable and resilient economic system.
  2. Benefits of Green Financing Green financing offers several significant benefits, impacting environmental quality, economic development, and financial stability.
  1. Improvement in Environmental Quality: Green finance directly contributes to mitigating environmental degradation and climate change. By directing investments towards projects like solar energy, hydropower, and other renewable energy sources, it helps reduce reliance on fossil fuels, thereby lowering greenhouse gas emissions and the overall carbon footprint of industries. It also supports initiatives aimed at improving energy efficiency, waste management, and sustainable agriculture, all of which lead to cleaner air, water, and healthier ecosystems. The availability of long-term support at cheap rates, as mentioned in the text, makes it financially viable for companies to adopt these environmentally beneficial technologies and practices. …

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