India is looking to enter into a carbon trading and carbon credit adjustment mechanism with Japan.
The two countries plan to sign a Memorandum of Cooperation for setting up a Joint Crediting Mechanism (JCM) with emission- reduction credits being shared
Under the mechanism, carbon credits will be ‘allocated through a structured process’ and there will be a ‘registry to track these credits’
Projects will be taken up only when they are cleared through a Joint Committee, and both governments will notify these credits issued based on the submitted reports
The credits will be allocated to the respective registries of India and Japan, and can subsequently be used towards the Nationally Determined Contribution (a climate action plan to cut emissions and adapt to climate impact) of both countries.
The proposal will “boost job creation by attracting investments in low-carbon and clean technologies”.
The JCM will facilitate diffusion of leading decarbonising technologies, equipment, machinery, products, systems and infrastructure, implementation of mitigation actions, among others
The JCM will be formed under Article 6.2 of the Paris Agreement
A joint committee will be established and it will develop rules and guidelines required for implementation of the JCM that cover project cycle procedures, methodologies, project design documents, monitoring and designation of third-party entities, among others.
Both governments “mutually recognise that part of JCM credits issued from emission reductions and removals may be towards the achievement of Japan’s nationally determined contribution and rest of the said JCM credits may contribute to the achievement of India’s nationally determined contribution” while ensuring double counting is avoided.
Each government can authorise part of JCM credits for international mitigation purposes too.
The two countries will confirm registration of a project prior to a decision by the joint committee; while the percentage of credit allocation will also be decided
The MoC (draft) also mentions Japan will facilitate the transfer of technology, finance and capacity building in respect of new technologies for the joint crediting mechanism
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