Overview of UNFCCC and Carbon Market Initiatives
The United Nations Framework Convention on Climate Change (UNFCCC) and its Paris Agreement do not mandate annual financial reporting. India adheres to its updated Nationally Determined Contributions (NDC). These were submitted in 2022 as part of its commitment under the Paris Agreement.
Emission Reductions and Progress
According to India’s 4th Biennial Update Report (BUR-4), submitted to the UNFCCC on 30th December 2024, India achieved a 36% reduction in the emission intensity of its Gross Domestic Product (GDP) between 2005 and 2020. This is compared to an NDC target of 45% reduction by 2030. Additionally, the share of non-fossil fuel sources in India’s total installed electricity generation capacity reached 47.10% by December 2024. This is approaching the target of 50% by 2030. India has also established 2.29 billion tonnes of additional carbon sink through forest and tree cover. They aim for a target of 2.5 to 3.0 billion tonnes by 2030.
Development of Carbon Market
In alignment with its climate goals, the Government of India amended the Energy Conservation Act, 2001 in 2022 to foster the development of a carbon market. This led to the notification of the Carbon Credit Trading Scheme (CCTS) on 28th June 2023. Its amendment on 19th December 2023 was also crucial. The CCTS includes two key mechanisms:
- Compliance Mechanism: Obligated entities must adhere to prescribed GHG emission intensity reduction norms in each compliance cycle and can earn Carbon Credit Certificates for exceeding these standards.
- Offset Mechanism: Non-obligated entities can register projects aimed at reducing, removing, or avoiding GHG emissions to qualify for Carbon Credit Certificates.
Transitioning to CCTS
The Government has outlined a plan to shift energy-intensive sectors and Designated Consumers (DCs) from the Perform, Achieve, and Trade (PAT) Scheme to the compliance mechanism under the CCTS. This ensures coherence with national climate objectives and avoids target duplications. The targeted sectors include Aluminium, Cement, Steel, Paper, Chlor-Alkali, Fertilizer, Refinery, Petrochemical, and Textile. Ten sectors have been approved under the offset mechanism. These encompass energy, waste management, agriculture, forestry, and transportation.
International Collaboration and Climate Goals
The establishment of the National Designated Authority for the Implementation of Article 6 of the Paris Agreement (NDAIAPA), notified on 30th May 2022, aims to manage the trading of international carbon credits. The Government collaborates globally on renewable energy initiatives through various agreements. These include Memorandums of Understanding and Joint Declarations.
At the United Nations Environment Assembly (UNEA) in March 2024, India successfully promoted the resolution on sustainable lifestyles, which aligns with the Mission LiFE initiative. Furthermore, India hosted the 3rd Voice of Global South Summit in August 2024. The summit emphasized sustainable consumption, production patterns, and climate justice.
Cross-Border Energy Initiatives
India has developed cross-border power connections with Nepal, Bhutan, Bangladesh, and Myanmar. Their agreements highlight India’s commitment to sustainable energy solutions. They include hydroelectric power cooperation with Bhutan and exporting 10,000 MW of electricity to Nepal within the next decade.
By engaging in these ambitious climate actions and international collaborations, India is making significant strides toward a sustainable future. They are addressing the pressing challenges posed by climate change.
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Reference: PARLIAMENT QUESTION: Progress in achieving Climate Goals
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