Understanding Carbon Markets The Government of India’s announcement regarding the creation of a carbon credits market is a pathbreaking one. This follows numerous other actions like the net-zero announcement that demonstrate India’s leadership in and ambition for climate change mitigation. Against this backdrop, our issue brief discusses alternative forms of carbon markets and assesses the perspective of Indian stakeholders on this subject. This paper highlights and explains the two alternative approaches of carbon markets: ‘offset market (project-based)’ and ‘cap-and-trade (or emissions trading scheme [ETS])’. The two approaches are significantly different from each other in terms of the key characteristics that define their structure, as well as quality, environmental integrity, and operational boundary of tradeable units. In this context, we conducted an industry stakeholder discussion to understand their perspectives on the recent developments.
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Understanding carbon markets: Prospects for India and stakeholder perspectives
