As the largest exporter of carbon credits, India is planning to have its own uniform carbon market in one year as a large finance avenue for energy transition projects and emission reduction.
According to an analysis by Deloitte Economics Institute, India could gain $11 trillion over 50 years by pulling back rising global temperatures and realising its potential to ‘export decarbonisation’ to the world.
The government is considering a change in legislation for implementing the carbon trading scheme that will subsume all such present tradeable certificates. The proposal is also to have a closed market that doesn’t allow export of such clean certificates in international carbon markets.
At the moment the current schemes are very limited as buyers are limited. Once a formal carbon trading market is opened up, and a conversion factor of every such certificate into how much CO2 has been avoided is put in place, the resultant market will be very large.
Setting up of emission targets is not ruled out, but is unlikely to happen soon. The market will let green plants and energy efficient units estimate earnings this will help earnings through carbon trade, which in turn will help boost and finance more such projects.
The government is initially planning to begin with a voluntary market considering net-zero announcements made by large corporations. Under the present Perform, Trade and Achieve scheme – Energy Saving Certificates (ESCerts) are traded. Likewise, renewable energy certificates (RECs) are traded to let entities meet renewable purchase obligations.