India's transformation to a lower carbon economy offers a $800 billion opportunity for global investors says Namita Vikas, Group President, Yes Bank.In December, the world reached a historic consensus on climate change at the COP21 in Paris. It was heartening to see 195 sovereign nations come together for a common issue that the planet is facing today.Climate change has certainly become one of this century's greatest destabilizing forces, which is undermining the global economy, threatening public health and increasingly leading to the source of armed conflicts. Climate change discussions have largely focused on sustainable agriculture, energy security and climaterelated conflict, with the flow of finance as a major underlying theme to drive the climate negotiations and agreements.Given the need for the high quantum of financing, channeling public and private finances towards climate change mitigation, adaptation and resilience would be a key action area going forward.The Paris Agreement marked many firsts in the chequered past of previous climate agreements, including, a first time recognition of the bottom up approach to planning for world targets, and a clear demarcation of roles for both developing and developed economies. The Intended Nationally Determined Contributions (INDCs) coming from some countries have been really ambitious, such as from Bhutan which intends to absorb 3 times the carbon that it generates. At Paris, the COP participants took an ambitious target to pursue efforts to limit the global temperature increase to 1.50C above pre industrial levels. However, given that the currently submitted INDCs still would result in 2.70C rise in global temperatures, clearly a lot more needs to be done by countries individually beyond their INDCs, which are now expected to be revised after every 5 years, as per the new Agreement.Through its focus on adaptation, capacity building, and transparency in reporting, the Agreement clearly provides a direction that there can be no going back to the business-as-usual scenario, and the only sustainable growth possible is a low carbon one. This is further corroborated by a clear outlining of the base-case scenario, where signatories can backtrack on neither their INDCs nor financial commitments promised by developed economies, currently at $100 billion annually from 2020.There were clear disagreements on financing for climate action between various blocs comprising developed and developing countries at Paris. The onus is now on the developed countries to deliver on their financial commitments to enable developing nations avoid creating new sources of carbon emissions, adopt clean technologies, and build resilience to socio-economic and environmental changes due to climate impact. This would ensure that individual contributions, however ambitious, add up to create a multiplier effect and all nations, as a whole, can mitigate climate impact more effectively.India's INDCs, announced in September 2015, clearly outline the country's goals, underscored by its call for climate justice. The Indian Government's focus on scaling up India's renewable energy installed capacity to 175 GW by 2022, its commitment to reducing the emissions intensity of GDP by 33-35 per cent by 2030 from 2005 levels, and other targets on each of the adaptation, mitigation and resilience fronts has put the country on the right direction to climate action.However, to achieve them would need significant financing and capacity building. It is estimated that India's adaptation actions alone, apart from resilience and disaster relief, would require $206 billion between 2015 and 2020, and an estimate by the NITI Aayog puts the mitigation requirement for a moderate low carbon development cost at around $834 billion till 2030. While domestic public and private finance would be called upon to shoulder part of this responsibility, they are mostly tied up in meeting India's developmental priorities, and international funding would be critical in meeting India's climate change actions.In this context, innovative ways to raise finance are needed as traditional sources of finance remain constrained. For example, green infrastructure bonds, which witnessed USD 37 billion in new issuance volume in 2014, are taking off in India as well and are being considered as a promising source of future climate finance. India's first green bonds were issued in 2015 itself, when Yes Bank raised Rs 10 billion ($150 million) for its 10 year bonds, followed by EXIM Bank's issue of India's first Dollar denominated green bonds for approximately Rs 31 billion ($464 million). Later during the year, the International Finance Corporation (IFC) raised approximately Rs 3.15 billion ($50 million) through the issuance of its first green masala bonds (Rupee denominated bonds raised in overseas markets) at the London Stock Exchange.This is indeed a promising sign and indicates that avenues for international financing for end-use domestic markets are slowly but surely opening up.Similarly, Indian institutions could target overseas funding through climate bonds, focusing on water, affordable housing, thereby being able to cover a spectrum of developmental projects, even as these bonds remain financially attractive investments for overseas investors. Another untapped source of funding are municipal bonds, which, till date has seen limited success in India where Urban Local Bodies have traditionally been unable to become self sustained. If done rightly, however, this platform could serve as a strong opportunity, for example, if market standardization on service quality and principles is achieved. However, safeguarding investor interests would remain critical, which would need governments to play a key role. They could, for example, offer first loss default guarantees and utilize funds generated from carbon tax, Green Climate Fund or other similar sources towards this.In conclusion, given India's responsibility and commitment towards a low carbon growth path, I believe a thrust towards generating determined financial contributions from newer and more innovative sources is necessary, to adequately deliver on our stated goals, which in turn add into the globally agreed target of limiting temperature rise due to climate change to 1.5 degrees. The call for climate action would need both, nations and corporations, to innovate and collectively work towards a sustainable future.