India National Designated Authority for Carbon Trading

As part of Paris Agreement carbon emissions trading, India has established a National Designated Authority (NDA) to regulate the trading. It is announced following the completion of Article 6 at COP29 in Baku (November 2024), and is a significant advancement towards an effective carbon market to help India meet its climate obligations.

Background: Article 6 and Carbon Markets

Article 6 of the Paris Agreement offers international carbon trading structure, where countries are encouraged to collaborate in terms of realizing emission cuts. It maintains transparency, credibility and elimination of double counting in the generation and utilization of carbon credits. Its rules were finally finalised in 2024, leading to the possibility that countries such as India can operationalise carbon markets.

Formation and Structure

It is a 21 member committee under the chairmanship of the Secretary of the Ministry of Environment, Forest and Climate Change (MoEFCC) . It has the representatives of the Ministries of External Affairs, Steel, Renewable Energy, and NITI Aayog, with the largest representation of the MoEFCC. This will be the nodal body in the governance of the carbon market in India.

Roles and Responsibilities

• Approving projects which produce emission reduction units.
• Pre-Recommending activities that can be traded in the carbon trading under Article 6.
• Coordinating projects to the needs of sustainability and development in India .
• Approving the application of emission reduction credits under the compliance of the Nationally Determined Contributions (NDCs) in India.

India's NDC Targets

India has pledged to:

• By 2030 (2005 levels) halve the emission intensity of GDP.
• Achieve 50% of power capacity from non-fossil fuel sources by 2030 .
• Create an additional carbon sink of 2.5-3 billion tonnes of CO2 equivalent through afforestation.

The NDA will be significant in facilitating these targets through control of carbon credit generation and trading.

Significance of the Carbon Market

A robust carbon market will:

• Attract investments in clean energy and green technologies.
• Give economic incentives to industries to reduce emission.
• Enhance global climate leadership of India coupled with protection of environmental integrity.

Through the declaration of the NDA, India places itself in the vanguard of market-based action on climate , in balancing the economic growth with sustainable development.