Carbon Market India
India, like many other countries, is facing the challenge of reducing its carbon emissions to mitigate the impact of climate change. One of the ways to achieve this is through the use of a carbon market, which incentivizes industries and businesses to reduce their carbon emissions and rewards them for doing so.
The carbon market in India is still in its nascent stages, but it has the potential to become an important tool in the country’s efforts to combat climate change. The Carbon Market India blog aims to provide comprehensive information on carbon market.
There are two types of carbon markets in India: the voluntary carbon market and the compliance carbon market. The voluntary carbon market is made up of companies and individuals who voluntarily purchase carbon credits to offset their carbon emissions. The compliance carbon market, on the other hand, is regulated by the government and is mandatory for companies that exceed a certain level of emissions.
The compliance carbon market in India is known as the Perform, Achieve and Trade (PAT) scheme, which was introduced in 2012. Under this scheme, energy-intensive industries are assigned energy efficiency targets, and if they exceed these targets, they can earn tradable energy-saving certificates (ESCerts). These ESCerts can be sold to companies that have not met their targets, creating a market for emissions reductions.
The PAT scheme has been successful in reducing carbon emissions in India. According to the Bureau of Energy Efficiency, the scheme has helped reduce carbon dioxide emissions by 31 million tonnes between 2012 and 2020. However, there is still room for improvement, as only a small percentage of industries are currently covered under the scheme.
In addition to the PAT scheme, there are other initiatives in India that are promoting the growth of the carbon market. The Renewable Energy Certificate (REC) mechanism is another market-based instrument that incentivizes the use of renewable energy sources. Under this scheme, renewable energy producers earn RECs, which can be sold to companies that need to meet their renewable energy targets.
Another initiative is the National Clean Energy Fund (NCEF), which provides financial support to renewable energy projects. This fund is financed through a cess on coal consumption and is used to promote the development of renewable energy sources.
The Network for Certification and Conservation of Forests (NCCF) is working to promote sustainable forest management in India. Forests play a critical role in mitigating climate change, as they absorb carbon dioxide from the atmosphere. By promoting sustainable forest management practices, the NCCF is helping to reduce carbon emissions in India.
The Carbon Registry-India is a voluntary registry for companies and organizations that want to offset their carbon emissions. Companies can purchase carbon credits through the registry, which represent emissions reductions that have been verified by independent third-party auditors. The registry provides a transparent and credible way for companies to offset their emissions and contribute to the growth of the carbon market in India.
The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is also relevant to India, as the country is one of the fastest-growing aviation markets in the world. CORSIA is a global carbon offsetting scheme for the aviation industry, which aims to cap emissions from international flights at 2020 levels. The scheme requires airlines to offset their emissions by purchasing carbon credits from approved projects.
India has not yet opted into the CORSIA scheme, but it is considering doing so in the future. As the country’s aviation sector continues to grow, it will become increasingly important for India to address the carbon emissions from this sector.