India's Carbon Markets Are Set To Be a Key Driver for Climate Action and Economic Growth
29 Jul 2024
Carbon markets have emerged as a pivotal factor as nations intensify their efforts to combat climate change. Carbon markets facilitate the reduction of greenhouse gas (GHG) emissions by permitting organisations and individuals to purchase and trade carbon credits. Each carbon credit represents the reduction of one tonne of carbon dioxide equivalent (CO2e) by one tonne.
By the year 2023, the global carbon market was valued at approximately $949 billion, encompassing diverse technologies such as renewable energy, energy efficiency, afforestation and reforestation, carbon capture and storage, and numerous others. Biogas is a significant contributor among the 170 carbon credits generated.
The carbon markets in India have experienced significant growth owing to the country's commitment to Nationally Determined Contributions (NDCs) under the Paris Agreement. In the year 2022, the market had a valuation of $1.2 billion. The Indian government has taken a proactive approach in establishing frameworks to facilitate carbon trading, with the objective of establishing a robust mechanism that not only assists in achieving environmental objectives but also fosters economic growth. Between 2010 and 2022, India issued 35.94 million carbon credits and actively traded them on international markets.
According to its NDCs, India is currently focusing on creating a domestic market for carbon credits in order to achieve its net zero goals. India aims to contribute to global climate goals by balancing national and international priorities and by advancing sustainable development domestically. Tapping into this market has the potential to initiate a biogas revolution in India, resulting in significant advantages for rural communities, the environment, and the economy.
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