Global Carbon Market – India
Title: Global Carbon Market – India
Commissioned by: German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB)
Lead executing agency: Ministry of Environment, Forests and Climate Change
Overall term: 2015 to 2018
For the German Government, a global carbon market is an important instrument for international climate protection. The trading of emissions allows mitigation activities to take place first in places where they are least expensive. This makes mitigation activities less costly, with the result that effective carbon markets can contribute to states setting more ambitious climate targets and the private sector making more climate-friendly investments.
In 2008, the German Federal Environment Ministry launched the CDM /JI Initiative to support its partner countries in using the flexible mechanisms of the Kyoto Protocol – the Clean Development Mechanism (CDM) and Joint Implementation (JI). The Global Carbon Market project is part of the CDM/JI Initiative, and supports its objectives in Uganda, Chile and India.
Under the government of Narendra Modi climate protection has increased in political significance in India, although efforts to pursue climate change mitigation still face obstacles. The close relationship between the mitigation of climate change and development goals such as poverty reduction is not yet fully acknowledged. Neither the Indian Government nor the Environment Ministry have shown much interest in the new market mechanisms. Nonetheless, interest seems to be growing and some market-based instruments are already being applied, for example the energy efficiency trading system ‘Perform, Achieve and Trade’ (PAT) and the trade in certificates for renewable energies.
Public and private decision-makers in India have the necessary knowledge and skills to use existing and new carbon market instruments for the implementation of their national climate change mitigation actions.
The project advises the climate change department of the Environment Ministry about market mechanisms and other forms of cooperation under the Paris Agreement, as well as on climate finance. It supports the Ministry by means of feasibility studies and market analyses. It also organises expert workshops and other technical events in order to involve the private sector in the development of climate finance instruments. In this respect, it focuses on corporate social responsibility activities and voluntary carbon markets.
The Ministry receives advice on new market mechanisms, on national and local climate action plans, and on negotiations as part of the United Nations Framework Convention on Climate Change (UNFCCC).
In October 2015, India launched a digital monitoring and information system, developed with the support of the project, which now monitor India’s CDM portfolio.
In close cooperation with the Ministry of Environment, the project has developed a REDD+ methodology for the voluntary carbon market, specific to the Indian context. Based on this methodology, the Indian Government plans to attract financial resources for the development and implementation of REDD+ projects, to fund efforts to help avoid carbon emissions from deforestation and forest degradation.
Jointly with the financial consultants KPMG, the project is setting up the India Climate Responsibility Facility (ICRF). This will provide a platform on which to gather together the climate finance contributions of individual firms in order to invest them in larger climate programmes.
The project has conducted regional training and awareness raising measures for representatives of private companies and state-run businesses.