A Clean gamble

Context:

• An amendment to the Energy Conservation Act passed in 2022 for trading Carbon credits and approved by the UN is significant but needs clarity in Indian context.

Shift in carbon market:

• Initial mechanism: A decade or more ago, they meant stock-market-like exchanges that traded in ‘carbon offsets’ made legitimate under the Clean Development Mechanism.
• Accessibility in India: Industrial projects in developing countries that avoided greenhouse gas emissions were eligible for credits that, after verification, could be sold to European companies that could buy them in lieu of cutting emissions themselves.
• The EU-Emissions Trading Systems (ETS): Except India, the government-mandates emission limit on industrial sectors such as aluminium or steel plants require industries to either cut emissions or buy government-certified permits.