Roadmap for Answer Writing
1. Introduction
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- Briefly introduce the concept of carbon trading and its significance in tackling climate change.
- Define carbon trading as a system where carbon credits are bought and sold, allowing entities to offset their emissions by investing in projects that reduce greenhouse gas (GHG) emissions.
2. Importance of Carbon Trading
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- Reducing GHG emissions: Explain how carbon trading helps reduce emissions by incentivizing industries to adopt cleaner technologies and practices. Reference the global coverage of carbon pricing (21% of global emissions by 2021) and its role in global climate efforts .
- Cost-effective solution: Highlight that carbon trading is more cost-efficient compared to direct regulations or carbon taxes. Carbon trading allows for market-driven solutions and reduces the overall societal cost of emissions reduction.
- Alignment with Paris Agreement: Mention how carbon trading aligns with Article 6 of the Paris Agreement, encouraging international cooperation to meet collective emissions reduction goals.
- Financial and innovation incentives: Discuss how carbon trading provides financial benefits to companies that reduce their emissions below their allotted levels, allowing them to sell excess credits. Also, it promotes innovation in green technologies.
3. Key Features of CCTS 2023
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- Governance Structure: Introduce the National Steering Committee (NSC) formed for overseeing the Indian carbon market, headed by the secretaries of Power and Environment.
- Role of Bureau of Energy Efficiency (BEE): BEE’s role as the administrator of the carbon market, which involves setting emission reduction targets, issuing carbon credit certificates, and accrediting verification agencies.
- Regulatory Bodies: Discuss the Grid Controller of India Limited, which will serve as the registry for carbon credits, and the Central Electricity Regulatory Commission, which will regulate trading activities in the carbon market.
- Institutionalizing the Carbon Market: Mention the NSC’s role in formulating rules and procedures for implementing the carbon market, including greenhouse gas emission targets for obligated entities.
4. Conclusion
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- Summarize the importance of carbon trading in reducing emissions and fostering global cooperation on climate change.
- Emphasize the role of the CCTS 2023 in helping India meet its climate goals and align with global climate initiatives.
Relevant Facts:
- Global Carbon Trading: As of 2021, carbon trading covers over 21% of global emissions .
- Sulfur Dioxide Permits: The U.S. used trading of sulfur dioxide permits to successfully reduce acid rain.
- CCTS 2023 Governance: The National Steering Committee (NSC) will be led by the power and environment secretaries for oversight .
- Role of BEE: The Bureau of Energy Efficiency (BEE) will administer the market, set emission targets, and accredit carbon verification agencies .
- Grid Controller of India Limited: This entity will maintain the registry for the carbon credits in the Indian market.
This structured roadmap will help in crafting a well-rounded answer that covers both the significance of carbon trading and the features of the Indian CCTS 2023.
Model Answer
Reducing Greenhouse Gas (GHG) Emissions
Carbon trading is a key mechanism in addressing climate change by reducing GHG emissions. It provides a market-based solution where entities that exceed their emissions targets can buy credits from those who reduce their emissions, creating financial incentives for emission reductions. For example, trading in sulfur dioxide permits successfully helped reduce acid rain in the U.S. Carbon trading systems have been adopted globally, covering over 21% of global emissions by 2021, up from 15% in 2020-Effectiveness and Flexibility**
Carbon trading is often more cost-effective than imposing direct regulations or taxes on emissions, allowing industries to meet emissions targets without the heavy burden of direct control measures. This flexibility helps reduce the overall societal costs of combating climate change .
Alih the Paris Agreement
Carbon markets align with Article 6 of the Paris Agreement, encouraging international cooperation by facilitating the trade of carbon credits. This fosters a collective global effort to achieve emissions reduction goals .
Promoting Innd Financial Benefits
The system incentivizes industries to innovate and adopt cleaner technologies to reduce emissions. It also offers financial rewards for entities that emit less than their allowed limits by enabling them to sell unused credits .
Key Features oon Credit Trading Scheme (CCTS) 2023
Governance and Oversight
The Ministry of Power has set up the CCTS framework to regulate carbon markets in India. The National Steering Committee (NSC), led by the secretaries of Power and Environment, provides direct oversight of the Indian carbon market .
Role of Bureau of Energy Effic)
BEE will administer the carbon market, setting emission reduction targets, issuing carbon credit certificates, and accrediting carbon verification agencies .
Regulatory Bodies and Functions
The CCTS 2023 is an essential step in India’s climgy, helping to integrate domestic efforts with global initiatives for climate mitigation.