India, the world’s third-largest emitter of greenhouse gases, is poised to play a leading role in the global carbon credit market. In June 2023, the Indian government launched the Carbon Credit Trading Scheme (CCTS), which is expected to boost the country’s carbon trading market to $10 billion by 2030.
The CCTS is a compliance-based market that will require designated consumers, such as large energy-intensive industries, to reduce their carbon emissions or purchase carbon credits from entities that have reduced their emissions. The scheme is expected to incentivize industries to invest in clean energy technologies and reduce their emissions footprint.
In addition to the CCTS, India is also developing a voluntary carbon market. The voluntary carbon market is a market where entities can buy and sell carbon credits on a voluntary basis. The voluntary carbon market is expected to play a key role in helping India achieve its net-zero emissions target by 2070.
The growth of India’s carbon credit market is being driven by a number of factors, including:
- The increasing demand for clean energy and the growing awareness of climate change.
- The government’s commitment to reducing carbon emissions and achieving net-zero by 2070.
- The launch of the CCTS and the development of the voluntary carbon market.
- The availability of a large pool of carbon credits from renewable energy projects, energy efficiency projects, and afforestation projects.
The growth of India’s carbon credit market is expected to have a number of benefits, including:
- Reduced carbon emissions and improved air quality.
- Investment in clean energy technologies and infrastructure.
- Job creation and economic growth.
- Support for sustainable development.
India’s carbon credit market is still in its early stages of development, but it has the potential to be one of the largest and most dynamic carbon markets in the world. The growth of the market will depend on a number of factors, including the government’s policy support, the availability of financing, and the participation of private sector players.
However, the potential benefits of the carbon credit market are significant, and it is likely to play a key role in helping India achieve its climate goals.
Author: Prof. Ganesh Channa (President World Environment Council)