India’s Approach To Carbon Credit Gained Traction Post COP26: Report
Ministry of Power recently notified carbon credit framework. Photo by: Freepik
A latest report by CareEdge Ratings on carbon credit claimed that India’s approach to building a local carbon credit market gained traction after COP26. The report said it could aid in decarbonizing the country’s economy.
“India’s approach gained traction after COP26, marked by the identification of 12 GHG mitigation activities eligible for trading within the ambit of the Paris Agreement’s Article 6.2 mechanism,” the report said.
It also added that this endeavour was oriented towards creating a robust domestic market that bridges financial gaps concerning the nation’s ongoing energy transition. “Through these initiatives, India showcases a steadfast commitment to the decarbonization of its economy and the fostering of sustainable development in the collective mission to combat climate change,” the report said.
The Ministry of Power recently notified its domestic carbon credit market framework. The government paved the platform for the same through the passing of the Energy Conservation (Amendment) Bill 2022.
“A significant stride in this direction was taken through the introduction of the Energy Conservation (Amendment) Bill in 2022, which established the groundwork for the forthcoming Indian carbon credit market. The draft blueprint envisions the establishment of the India Carbon Market Governing Board (ICMGB) as the central entity responsible for the oversight and regulation of the carbon credit market,” the report said.
The report said that, as per estimates, the market size of the Indian carbon credit market is likely to only scale up. “The popularity of the credits could be estimated by the fact that India alone has a market share of 17% globally with 35.94 million USD currently (the global market stands at 2 billion). By some estimates, the global carbon credits market would reach 100 billion USD by the end of 2030, as per the Confederation of Indian Industry. It has also been estimated by MarketsAndMarkets that global market size would reach 1,602 billion $,” the report said.
Citing the World Bank report on the issue, the CareEdge rating report said that the proportion of global greenhouse gas emissions covered by carbon credits has risen from 5 percent in 2005 to 22% in 2022.
