Why in News
At the COP-29 summit in Baku, India is expected to focus on its climate finance strategy, including the creation of a domestic carbon market.
This follows India's 2023 update to its Nationally Determined Contributions (NDCs), which includes the establishment of a Carbon Credit Trading Scheme (CCTS) under the Energy Conservation (Amendment) Act of 2022.
India’s Efforts to Establish a Domestic Carbon Market
India aims to align its climate goals under the Paris Agreement with economic objectives by setting up a domestic carbon market.
The system needs to be designed to ensure credibility, efficiency, and fairness.
India launched the Green Credit Programme (GCP) which will focus on emissions reduction through carbon credits, but it must avoid issues like greenwashing, as seen in other countries.
Greenwashing is a deceptive practice where a company or entity misleads the public about its environmental impact
Lessons from Global Experience
Global carbon markets, especially voluntary ones, have faced criticism for projects overstating their benefits.
India’s GCP and the Carbon Credit Trading Scheme (CCTS) could face similar risks, especially with non-scientific tree plantation efforts.
To ensure credibility, India must adopt international best practices, including using third-party verifiers, national registries to track carbon credits, and measures to prevent double-counting.
Environmental Integrity
Environmental integrity is essential to maintaining the trust and effectiveness of carbon markets.
India’s carbon market must align with global frameworks like Article 6 of the Paris Agreement, which facilitates international carbon trading.
Transparent systems for accounting, reporting, and verifying emissions reductions are key to maintaining the credibility of India’s market.
Transparency must be a cornerstone, with clear project details, third-party audits, and real-time tracking of carbon credits.
Independent auditors, like those approved by India’s Bureau of Energy Efficiency (BEE), should ensure compliance with environmental standards.
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