India aims to achieve net-zero emissions by 2070 and is exploring new ways to cut carbon emissions. In response to the global push to address climate change, the Power and New & Renewable Energy Ministry is considering allowing the overseas trading of carbon credits linked with Green Hydrogen. According to Mr. ES Ranganathan, India’s economic growth has led to increased carbon emissions, particularly from the energy and industrial sectors.
Ranganathan emphasizes the benefits of overseas carbon credit trading, stating that it can expedite India’s efforts to reduce emissions. By buying carbon credits from other countries, India can effectively offset its emissions, especially in challenging sectors.
Carbon credits, also known as carbon offsets, are a market-based approach that allows organizations or countries to balance their carbon emissions by investing in projects that remove or reduce an equivalent amount of greenhouse gases. These projects include reforestation, renewable energy, and improved industrial processes, serving as incentives for emissions reduction and sustainability.
India has committed to reducing its carbon intensity by 33-35% by 2030 compared to 2005 levels, as part of its Nationally Determined Contributions (NDCs) under the Paris Agreement. Allowing international trade of carbon credits is a new and exciting development for the country.
International carbon credit trading promotes collaboration in addressing climate change and encourages partnerships between India and other nations. This collaboration can lead to the exchange of knowledge and technology, fostering economic opportunities in India. The country can attract investments in renewable energy, afforestation, and emission reduction projects, potentially creating jobs and contributing to economic growth.
While the potential benefits are significant, establishing robust systems to verify emissions reductions and prevent fraud is crucial for the credibility of carbon credit markets. ES Ranganathan suggests that India should not rely solely on international carbon credit trading but continue to focus on domestic efforts to reduce emissions.
India’s consideration of overseas carbon credit trading is a significant step toward meeting its climate commitments. However, careful consideration and addressing challenges are necessary to ensure the effectiveness of domestic emission reduction efforts. With the right strategies, India can make a substantial contribution to the global fight against climate change while enjoying economic and environmental benefits.