India's climate targets and the carbon credit trading scheme
India's climate story runs on two tracks, the pledges made under the Paris Agreement, and the domestic carbon market built to meet them. The exam tests both, and often the gap between them.
The NDC targets
India's updated Nationally Determined Contribution (2022) sets three headline numbers.
| Target | Value |
|---|---|
| Non-fossil power capacity by 2030 | 50% |
| Emission intensity reduction vs 2005 | 45% |
| Additional carbon sink | 2.5–3 GtCO₂e by 2030 |
Source: India's updated NDC (UNFCCC)
The Carbon Credit Trading Scheme
India's compliance carbon market runs under the Energy Conservation Act, 2001, as amended in 2022, and is administered by the Bureau of Energy Efficiency under the Ministry of Power. The scheme has two strands.
The compliance mechanism. Notified in 2023, it sets emission intensity targets for obligated entities in specified sectors. Underperformance must be covered by buying Carbon Credit Certificates, one certificate per tonne of CO₂ equivalent.
The offset mechanism. Notified from 2025, it lets emission-reduction projects generate credits for sale.
Source: Bureau of Energy Efficiency: carbon markets
The schemes it builds on
The market consolidates older instruments.
Perform, Achieve and Trade (PAT). The precursor. Energy-efficiency certificates traded by designated consumers.
Renewable Energy Certificates. A separate market for green power attributes.
The Carbon Credit Trading Scheme now subsumes both into one carbon market, with a single registry and trading platform.
The recurring exam angles
Which ministry runs it. Power, through the BEE. The classic trap option.
Compliance versus voluntary. India's scheme obligates entities, unlike purely voluntary offset markets.
Article 6 linkage. The UNFCCC rules now permit international transfer of credits, which India's domestic market can plug into later.
Prelims traps
| Statement | True or False |
|---|---|
| "The CCTS is administered by the Ministry of Environment" | False. Ministry of Power, via BEE |
| "The compliance mechanism was notified in 2023" | True |
| "PAT was the precursor energy-efficiency market" | True |
| "One Carbon Credit Certificate equals one tonne of CO₂e" | True |
Part of: Environment and Climate, July 2024 to June 2026
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Source: Bureau of Energy Efficiency; UNFCCC NDC registry.