Since 2004, the Indian market for carbon credits has been expanding, but it is still in its infancy. The nation’s goal is to achieve net zero carbon emissions by 2070. India developed the first exchange in Asia, the Multi Commodity Exchange (MCX), to facilitate the trading of carbon credits. Many agribusinesses have already begun collaborating with farmers to help them sequester carbon, which will allow them to earn carbon credits. To maintain a transparent operating system in this sector, numerous advancements are still required on the regulatory and market fronts.
Global carbon pricing revenue in 2021 increased by almost 60 per cent from 2020 levels, to around $84 billion, providing an important source of funds to help support a sustainable economic recovery, finance broader fiscal reforms, or invest in communities as part of the low-carbon transition future, according to the World Bank’s annual “State and Trends of Carbon Pricing” report released on May 24, 2022. The report noted that the past year has seen some very positive signs, such as the significant increase in revenue that can be invested in communities and in supporting the low carbon transition.
Since 2004, the Indian market for carbon credits has been expanding, but it is still in its infancy. The nation’s goal is to achieve net zero carbon emissions by 2070. India developed the first exchange in Asia, the Multi Commodity Exchange (MCX), to facilitate the trading of carbon credits. Many agribusinesses have already begun collaborating with farmers to help them sequester carbon, which will allow them to earn carbon credits. To maintain a transparent operating system in this sector, numerous advancements are still required on the regulatory and market fronts.
The latest amendment to The Energy Conservation Bill, in August 2022, empowers the central government to specify a carbon credit trading scheme, as a step towards becoming carbon-neutral by 2070.
The scheme aims to reduce carbon emissions. Certificates will be issued to those who meet their emission targets. These certificates are tradeable. As per a recent report by the Trade Promotion Council of India (TPCI), India’s carbon trading market ranked as the second highest globally in transacted volumes – generating 30 million carbon credits. The current pulse of the industry suggests that the Energy Conservation Bill is definitely a game-changer move by the government if implemented in its true spirit.
Applauding the move, Shailendra Singh Rao, Founder and Managing Director, Creduce, that provides services such as carbon trading to empower people and businesses to live a ‘carbon conscious’ life, stated, “The Bill will bring Bharat at par with the world and also provide much- needed guidance towards a carbon-neutral economy. The revision is to provide clarity on the generation, utilisation and as well as trading of Carbon Credits as well as rewarding acts of conservation. Not only will it define the emission standards at par with global ones but also act as a catalyst to promote energy efficiency in the private sector.”
India’s goal of becoming a carbon-neutral nation by 2070 relies heavily on the large agricultural and industrial sectors cutting their respective emission levels. The agriculture carbon trading market in India is at a relatively nascent stage but exhibiting a fast pace of growth with the entry of private players in the last two years. Farmers, as the major stakeholders in the agriculture sector can increase their income by way of earning and selling carbon credits as per their needs.
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