CEEW suggests emissions trade for India

According to the Delhi-based think tank Council on Energy, Environment and Water (CEEW) India should create a carbon emissions trading scheme (ETS) similar to what the European Union or South Korea have set up.

The CEEW recommended a cap-and-trade mechanism for greenhouse gas emissions that can be made applicable to various sectors in order to drive down emissions in a cost-effective manner.

The Bureau of Energy Efficiency (BEE), which is in charge of regulating this market, is likely to come up with a framework for a domestic carbon market by the end of next month, according to sources in the central government.

The Energy (Conservation) Amendment Bill, passed in Parliament late last year, paved the way for the establishment of a domestic carbon market in India, which seeks to incentivise emissions reductions among carbon-intensive industries.

According to the CEEW, India’s own carbon market could regulate 50 per cent of its carbon dioxide emissions, while the rest could be mitigated “through dedicated and complementary sectoral policies”.

A government official said that while ETS in countries like EU and Korea set absolute targets on emissions reductions, in India, the emissions targets will not be absolute, but in terms of emissions intensity. Emissions intensity refers to the volume of carbon per unit of output.

India has pledged to achieve net-zero emissions by 2070, as well as reduce its carbon emissions intensity of gross domestic product (GDP) by 45 per cent by 2030. Carbon markets are viewed as an essential tool by policymakers to achieve these climate goals.