ES Ranganathan: India's Decision to Trade Carbon Credits Overseas Can Be a Ground-Breaking Solution for Achieving India's Climate Goals

Implementing India's self-defined climate action objectives known as the Nationally Determined Contribution (NDC) will require a series of courageous choices as shown in the latest one by the government of India

India's ambitious goal to achieve net-zero emissions by 2070 has prompted it to consider new avenues for reducing carbon emissions. In the wake of climate change, countries across the globe are striving to mitigate their carbon footprint and embracing more sustainable practices through various initiatives and decisions. A significant development comes from the Power and New & Renewable Energy Ministry where India is contemplating allowing overseas trading of carbon credits linked with Green Hydrogen with other countries. Mr. ES Ranganathan shares, "India is a dynamic and diverse nation with a rapidly growing economy. This economic growth has been accompanied by an increase in carbon emissions, mainly from the energy and industrial sectors." He highlighted the benefits of this move by saying, "Allowing overseas carbon credit trading can expedite India's emissions reduction efforts. By purchasing carbon credits from other countries, India can offset its emissions more effectively, especially in sectors where reduction is challenging."

Understanding Carbon Credits
Carbon credits, often referred to as carbon offsets, are a market-based mechanism that allows organizations or countries to offset their carbon emissions by investing in projects that reduce or remove an equivalent amount of greenhouse gases from the atmosphere. These projects could include reforestation efforts, renewable energy initiatives, and improved industrial processes. Essentially, carbon credits are a way to incentivize emissions reductions and promote sustainability. ES Ranganathan shares, "India has taken significant steps towards clean energy adoption, such as increasing its renewable energy capacity, implementing energy efficiency measures, and setting ambitious targets for electric vehicle adoption."

Significance of This Move
India's commitment to mitigating climate change is well-documented. The country has pledged to reduce its carbon intensity by 33-35% by 2030, compared to 2005 levels, as part of its Nationally Determined Contributions (NDCs) under the Paris Agreement. The idea of allowing its carbon credit market to international trade is a relatively new and exciting development.

Carbon credit trading fosters international collaboration in addressing climate change. It promotes partnerships between India and other nations, encouraging the exchange of knowledge and technology to develop more sustainable practices. This can further lead to creating economic opportunities for India. In fact, it can attract investments in renewable energy, afforestation, and other emission-reduction projects, potentially leading to job creation and economic growth in the country. "By exploring this avenue, India can access additional resources to accelerate emissions reductions and engage in international climate cooperation," cited ES Ranganathan.

Careful Consideration Is Required
While the potential benefits of international carbon credit trading for India are substantial, establishing robust systems for verifying emissions reductions and preventing fraud is essential for the credibility of carbon credit markets. ES Ranganathan suggests, "India should not solely rely on international carbon credit trading and must continue to focus on domestic emissions reduction efforts also"

India's contemplation of allowing overseas trading of carbon credits is a significant step towards fulfilling its climate commitments. However, it must tread carefully, addressing the challenges and ensuring that its domestic efforts to reduce emissions remain robust. With the right strategies, India can contribute significantly to the global fight against climate change while reaping economic and environmental benefits.