Article Summary: India’s voluntary carbon market has a valuation exceeding $1.2 billion and boasts 1,451 projects registered or under various stages of consideration across two prominent registries, Verra and Gold Standard, as of May 2023. Under the Energy Conservation (Amendment) Act of 2022, the Indian government announced the formation of the Indian Carbon Market (ICM). “A domestic market that is formed in unison and close consultation with relevant industry stakeholders can tremendously accelerate the country’s transition to become carbon neutral,” initially founded Carbon Market Association of India’s president Manish Dabkara told the media in 2022.
Carbon Markets- The global public at large is unaware of several climate jargon except Carbon Emissions (quite a popular climate term). Take a glance into your carbonated smartphone. You will see some climate jargon popping up in your Instagram reel, YouTube short, a news headline and X feed. Climate jargon has become quite popular in the last decade. Your subscribed newsletters’ big headings have spurred these climate jargon into your email inbox. Isn’t it? Something like mentioned below:
“Indian energy firms join hands to develop a carbon market.”
“India prefers negotiating with the EU on carbon tax to WTO complaint.”
“In the name of cutting carbon emissions, France banned short-haul flights.”
“Want a low-carbon summer vacation? Climate campaigners say the only way to reduce the environmental impact of holidays is to fly less. This Is How to Plan Your Low-Carbon, High-Impact Summer Vacation.”
“JP Morgan had made one of the biggest bets ever to remove carbon from the atmosphere to fight climate change. It agreed to invest more than $200 million to purchase carbon credits from several companies in the nascent industry, company officials said to Bloomberg in 2023.”
“Global carbon markets face upheaval as nations remake the rules.”
“Capturing carbon is hard — and pending judgements by the UN as to what methods should count as “proper” ways to remove carbon threaten to make it even harder.
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Centre of Science and Environment (CSE) Report 2023
In May 2023 alone, India’s carbon market valuation overshoot by $1.2 billion. The nation have more than 1000 projects under its belt. The Centre of Science and Environment (CSE) report says, “India’s voluntary carbon market has a valuation exceeding $1.2 billion and boasts 1,451 projects registered or under various stages of consideration across two prominent registries, Verra and Gold Standard, as of May 2023.”
Carbon Market of India
Under the Energy Conservation (Amendment) Act of 2022, the Indian government announced the formation of the Indian Carbon Market (ICM). “A domestic market that is formed in unison and close consultation with relevant industry stakeholders can tremendously accelerate the country’s transition to become carbon neutral,” initially founded Carbon Market Association of India’s president Manish Dabkara told the media in 2022. It aims to act as a mediator between government and industry to facilitate trade of carbon credits which would imply increased carbon neutral growth. Dabkara is the owner of EKI Energy Services. EKI Energy Services deals in carbon offsetting business.
India’s eco-conscious energy companies have come together to develop a carbon credit market to help achieve energy transition goals. For instance, Gautam Adani’s Adani Green (a part of Adani Group) and carbon offsetters EKI Energy Services. The association has Hero Future Energies, Ayana Renewable Power and global private equity major KKR’s Virescent Infra as members.
Difference between 90s carbon markets and Now carbon markets
The concept of Carbon Markets in 90s legally bind developed nations to reduce GHG emissions. Nowadays, the climate settings have transformed. So does this concept. The main objective of these carbon markets and governments too, is to incentivize companies’ carbon-free behaviour. Because companies and industries are the primary sources of pollution. So, it has become a widespread concept in under-developed, developing and developed nations as well. The World Bank has recorded the carbon market’s course from 1990s till now.
Cap-and-Trade Systems
The Regional Greenhouse Gas Initiative (RGGI) in the Northeastern US said it is reducing emissions. It is expected to lead to more money being invested in renewable energy and efficiency. So, a cap-and-trade system sets a limit on emissions and allows companies to buy and sell allowances. It encourages companies to find the most cost-effective ways to reduce emissions.
Carbon Offsetting
Carbon offsetting lets companies and individuals invest in projects that reduce emissions, like reforestation or renewable energy. This is popular with airlines and corporations that want to offset their emissions. A major airline partnered with an offsetting reforestation project in South America, offering passengers the choice.
Challenges
India’s economy is growing fast and using more energy, especially from fossil fuels. India wants to use more renewable energy. It depends on coal. 70% of coal is used for electricity. India’s economic growth and emissions reduction are at odds.
