UPSC Prelims Practice Questions — A framework for climate and development capital

Q1. As per the Draft Framework released in May 2025, approximately what quantum of annual finance is the India's Climate Finance Taxonomy intended to facilitate towards climate-friendly technologies and activities?

  • A. USD 100 billion per year
  • B. USD 170 billion per year
  • C. USD 250 billion per year
  • D. USD 400 billion per year

Q2. With reference to the Draft Framework of India's Climate Finance Taxonomy (2025), consider the following activity categories: 1. Climate change mitigation activities 2. Climate change adaptation activities 3. Transition activities for hard-to-abate sectors 4. Biodiversity offset trading activities Which of the above are correctly identified as falling within the explicit scope of the Draft Taxonomy?

  1. Climate change mitigation activities
  2. Climate change adaptation activities
  3. Transition activities for hard-to-abate sectors
  4. Biodiversity offset trading activities
  • A. 1 and 2 only
  • B. 1, 2 and 3
  • C. 2, 3 and 4
  • D. 1, 3 and 4

Q3. With reference to the climate strategy articulated in the Economic Survey 2025-26 as compared with conventional treatments of climate and development finance, consider the following statements: 1. The Survey adopts a development-centred, whole-of-economy climate strategy that integrates adaptation, mitigation and behavioural change within the development model. 2. The Survey identifies adaptation as central to India's climate strategy, particularly for poorer and climate-vulnerable populations. 3. The Survey recommends maintaining a strict separation between climate finance accounting and development finance accounting tracks. Which of the statements given above is/are correct?

  1. The Survey adopts a development-centred, whole-of-economy climate strategy that integrates adaptation, mitigation and behavioural change within the development model.
  2. The Survey identifies adaptation as central to India's climate strategy, particularly for poorer and climate-vulnerable populations.
  3. The Survey recommends maintaining a strict separation between climate finance accounting and development finance accounting tracks.
  • A. 1 only
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q4. The Draft Framework of India's Climate Finance Taxonomy released in May 2025 was prepared pursuant to an announcement made in which one of the following Union Budgets?

  • A. Union Budget 2022-23
  • B. Union Budget 2023-24
  • C. Union Budget 2024-25
  • D. Union Budget 2025-26

Q5. Which of the following is the nodal body that released the Draft Framework of India's Climate Finance Taxonomy for public consultation in May 2025?

  • A. Ministry of Environment, Forest and Climate Change
  • B. NITI Aayog
  • C. Department of Economic Affairs, Ministry of Finance
  • D. Reserve Bank of India