India’s Bold Leap: Unveiling a Pioneering Carbon Trading and Green Bond Regulator for a Greener Tomorrow
The Indian government is planning to establish a regulatory agency similar to the National Agriculture Cooperative Marketing Federation of India (NAFED) to oversee carbon trading, according to sources. This new entity will also handle green initiatives such as green bonds, aligning with global efforts to create a carbon market under the Conference of the Parties (COP29) to the UN Framework Convention on Climate Change (UNFCCC). This follows the passage of the Energy Conservation (Amendment) Bill, 2022, which lays the groundwork for a carbon market in India.
The legislation empowers the government to create a domestic carbon market and allows specific agencies to issue carbon credit certificates (CCCs), each representing a reduction or removal of one tonne of CO2 equivalent. The proposed Indian Carbon Market Framework would have two components: a compliance mechanism aimed at sectors with significant emissions, and an offset mechanism to encourage voluntary greenhouse gas reduction efforts by other entities.
The Bureau of Energy Efficiency (BEE) and the Central Electricity Regulatory Commission (CERC) will play vital roles in managing the scheme and regulating carbon credit trading, respectively. As part of the Paris Agreement, India committed to reducing its greenhouse gas emission intensity by 45% by 2030 from the 2005 levels.
The potential new agency could take a form similar to NAFED but focus on fostering green industrial development. There is a global bond market valued at $135 trillion as of July 2023, with $575 billion in green bonds issued in 2023 alone. Despite India’s large economy, its green bond issuance accounted for just 2.2% of the global total in 2023.
Currently, the green finance working committee, part of the finance ministry, supervises the issuance of sovereign green bonds. However, the relevant Indian ministries involved did not respond to queries regarding these developments at the time of reporting.
Original Story https://www.livemint.com/news/india/india-to-set-up-a-carbon-trading-green-bond-regulator-11733031254191.html
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