As India prepares to roll out its own national compliance-based carbon market, Centre for Science and Environment (CSE) has prepared a clear roadmap to help it along.
Finance minister Nirmala Sitharaman had announced in the Budget of 2024-25 that a plan and appropriate regulations will be put in place for the transition of hard-to-abate sectors from a Perform, Achieve and Trade (PAT) mode to an Indian Carbon Market (ICM) mode.
CSE released its proposed roadmap – as part of its new report titled The Indian Carbon Market: Pathways towards an effective mechanism — here today at a global webinar.
India has pledged to meet its Nationally Determined Contribution (NDC) targets by 2030, and aims for net-zero emissions by 2070, in line with the United Nations Framework Convention on Climate Change (UNFCCC) guidelines. To meet these ambitious goals, the country has set out on a pathway to develop and launch its own national compliance-based carbon market.
Speaking in the webinar, CSE director general Sunita Narain said: “The upcoming Indian Carbon Market scheme should kick start with a large coverage of the country’s emissions. A single nation-wide carbon market scheme for carbon-intensive sectors should be brought in to ensure effective implementation and avoid any complexity. For this scheme to be effective, it also needs to ensure a high carbon price, data integrity and transparency.”
CSE’s new report aims to collate a clear set of learnings from past and present compliance-based emission trading schemes worldwide, including those operating in India. This learning would help facilitate effective operationalisation of carbon markets in India; it would also ensure they serve their intended purpose of reducing emissions.
The report has analysed four Emission Trading Schemes (ETS) in use worldwide: the European Union Emission Trading System, the Korean ETS, the Chinese ETS, and the Surat ETS. India’s Perform, Achieve, and Trade (PAT) scheme, which specified energy reduction targets over three-year cycles, has also been assessed as it sets the base for the upcoming Indian Carbon Market scheme.
Says Nivit Yadav, programme director, industrial pollution, CSE: “The PAT scheme was initiated with the good intention of increasing energy efficiency in industrial sectors, but faced several shortcomings in implementation. Our analysis shows it has achieved marginal emissions reduction, which is not enough as India attempts to travel towards decarbonisation, especially in the hard-to-abate industries.”
