India prepares for a domestic carbon market with release of a draft carbon trading scheme

India prepares for a domestic carbon market with release of a draft carbon trading scheme

Subject: Environment

Section: Climate change

Context: India’s carbon market is gradually taking shape with the latest push from the Ministry of Power which released a draft of the Carbon Credit Trading Scheme (CCTS).

More on the News:

• The carbon trading scheme was introduced through the Energy Conservation (Amendment) Bill, 2022 which provides for empowering the central government to specify such a scheme.
• Though the establishment of a carbon or emission market has been part of India’s overall climate action strategy, it has gained momentum after the Conference of Parties (COP26) organised in Glasgow. The concept of emissions trading is that countries sell excess emission units – emissions that they are permitted to have but not used – to other countries which need the excess units to meet their emission targets.

Draft of the Carbon Credit Trading Scheme

• The draft of CCTS lays out the organisational architecture needed to set up and operationalise a domestic carbon market in India.
• It identified the role composition of key constituents – the regulator (India Carbon Market Governing Board), the administrator, the registry (the Grid Controller of India), the trading administrator (Central Electricity Regulatory Authority), exchanges and specifications for empaneling auditors and developing methodologies.
• The draft proposes a structure for the Indian Carbon Market (ICM), including a voluntary trading and compliance market. Secretaries and joint secretaries of several crucial ministries in union government will be part of the governing board, which will administer and regulate the market.
• According to the draft, the proposed board will suggest policies and regulations for the market, set up the framework for voluntary carbon credit trading, and specify criteria for selling carbon credit certificates to foreign buyers.
• Bureau of Energy Efficiency will be the administrator for the Indian Carbon Market and also work as the secretariat for Indian Carbon Market Governing Board (ICMGB).
• Bureau of Energy Efficiency will discharge several responsibilities, from developing standards and processes for registering projects under a voluntary mechanism to developing trajectories and targets for the entities under the compliance mechanism.
• The Bureau will also issue carbon credit certificates (CCC) and develop market stability mechanisms for carbon credits.
• The Bureau will specify the procedure, including eligibility criteria for the accreditation of agencies to function as Accredited Carbon Verifiers.

Energy Conservation (Amendment) Bill, 2022 https://optimizeias.com/bill-to-set-up-carbon-credit-trading-passed/

Carbon Markets https://optimizeias.com/india-will-be-the-biggest-carbon-market-by-2030/