{"id":142668,"date":"2024-11-13T19:27:24","date_gmt":"2024-11-13T13:57:24","guid":{"rendered":"https:\/\/pwonlyias.com\/stage\/?post_type=current-affairs&#038;p=142668"},"modified":"2024-11-14T11:49:55","modified_gmt":"2024-11-14T06:19:55","slug":"cop-clears-carbon-credit-trade","status":"publish","type":"current-affairs","link":"https:\/\/pwonlyias.com\/stage\/current-affairs\/cop-clears-carbon-credit-trade","title":{"rendered":"COP 29 Clears Carbon Credit Trade"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Countries assembled in Baku for the annual climate conference, COP29, voted to clear a much-delayed agreement to finalise a <\/span><b>global carbon market.\u00a0<\/b><\/p>\n<div class=\"vc_table_green\"><\/p>\n<table style=\"width: 99.7979%;\">\n<tbody>\n<tr>\n<th style=\"width: 100%; border-style: solid; border-color: #000000; background-color: rgba(184, 165, 217, 0.53); text-align: left; vertical-align: middle;\">\n<h2><span style=\"font-size: 18pt; color: #000000;\"><b>Carbon Credit<\/b><\/span><\/h2>\n<p><span style=\"color: #000000;\"><span style=\"font-weight: 400;\">According to the United Nations Framework Convention on Climate Change (UNFCCC), a carbon credit represents<\/span><b> a unit of carbon dioxide or an equivalent amount of another greenhouse gas <\/b><span style=\"font-weight: 400;\">that has been<\/span><b> reduced, sequestered, or avoided.<\/b><\/span><\/p>\n<p><span style=\"font-weight: 400; color: #000000;\">Carbon credits are typically generated through projects that reduce emissions, such as renewable energy projects, reforestation, or energy efficiency initiatives.\u00a0<\/span><\/th>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><\/div>\n<p style=\"text-align: center;\"><span class=\"vc_button\"><a href=\"https:\/\/www.pw.live\/batches\/upsc?utm_source=seo+upsc+batch&#038;utm_medium=seo+upsc&#038;utm_campaign=seo&#038;utm_id=upsc\" target=\"_blank\" rel=\"noopener\">Enroll now for UPSC Online Course<\/a><\/span><\/p>\n<h2><span style=\"font-size: 18pt;\"><b>About Global Carbon Market<\/b><\/span><\/h2>\n<ul>\n<li><span style=\"font-weight: 400;\">A Global Carbon market will allow countries to trade carbon credits for certified reductions of carbon emissions among themselves. <\/span><b>The prices of these instruments are determined as a consequence of emission caps imposed by countries.<\/b><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Aim: <\/b><span style=\"font-weight: 400;\">To finalise a global carbon market facilitating trade in carbon credits among countries to meet climate targets.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Background: Article 6 of Paris Agreement<\/b><span style=\"font-weight: 400;\"> provides mechanisms for countries and companies to collaborate in reducing carbon emissions and meet their climate action goals formally known as nationally determined contributions (<\/span><b>NDCs).<\/b><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Carbon market: <\/b><span style=\"font-weight: 400;\">Derived from Article 6 of the Paris Agreement which outlines mechanisms for <\/span><b>international carbon credit trading.\u00a0<\/b><\/li>\n<\/ul>\n<div class=\"vc_table_green\"><\/p>\n<table style=\"width: 99.7992%;\">\n<tbody>\n<tr>\n<th style=\"width: 100%; border-style: solid; border-color: #000000; background-color: rgba(184, 165, 217, 0.53); text-align: left; vertical-align: middle;\">\n<h3><span style=\"font-size: 16pt; color: #000000;\"><b>India&#8217;s NDC\u00a0<\/b><\/span><\/h3>\n<p><span style=\"font-weight: 400; color: #000000;\">To reduce emissions intensity by 45% by 2030 (compared to 2005 levels) and increase forest cover to create a carbon sink of 2.5 to 3 billion tonnes by 2030.<\/span><\/th>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><\/div>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Bilateral Carbon Trade: <\/b><span style=\"font-weight: 400;\">Article 6.2 Allows for bilateral trading between countries.<\/span><b>Framework of Carbon Trade:<\/b><span style=\"font-weight: 400;\">\u00a0 Article 6.4 sets the framework for a global market supervised by a UN body.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Carbon Credit Integrity : <\/b><span style=\"font-weight: 400;\">A UN supervisory body has developed draft standards for assessing and ensuring genuine carbon credits.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Operationalizing the Market:<\/b><span style=\"font-weight: 400;\"> The first UN-sanctioned carbon credits will be available by<\/span><b> 2025.<\/b> <b>Significance of Global Carbon Market:<\/b><\/li>\n<li><b>Economic Impact :<\/b><span style=\"font-weight: 400;\"> Finalising Article 6 negotiations could reduce the cost of implementing national climate plans by $250 billion per year.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Stricter Standards:<\/b><span style=\"font-weight: 400;\">The introduction of downward adjustments to project baselines is aimed at preventing inflated claims.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Real Impact: <\/b><span style=\"font-weight: 400;\">Only projects that achieve real and additional reductions in emissions will earn carbon credits.<\/span><\/li>\n<li><b>Loss and Damage Fund: <\/b><span style=\"font-weight: 400;\">Activate the Loss and Damage Fund to support vulnerable nations affected by climate change.Expected to start disbursing funds in 2025.<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-size: 18pt;\"><b>Difference between Compliance-based and Voluntary Carbon Credit Trading<\/b><\/span><\/h2>\n<div class=\"vc_table_green\"><\/p>\n<table style=\"width: 99.5984%;\">\n<tbody>\n<tr>\n<td style=\"width: 19.6787%; text-align: center;\"><b>Feature<\/b><\/td>\n<td style=\"width: 32.5301%; text-align: center;\"><b>Compliance-based<\/b><\/td>\n<td style=\"width: 48.5226%; text-align: center;\"><b>Voluntary<\/b><\/td>\n<\/tr>\n<tr>\n<td style=\"width: 19.6787%;\"><b>Regulatory Framework<\/b><\/td>\n<td style=\"width: 32.5301%;\"><span style=\"font-weight: 400;\">Governed by regulations and mandates<\/span><\/td>\n<td style=\"width: 48.5226%;\"><span style=\"font-weight: 400;\">Self-regulated, driven by corporate social responsibility<\/span><\/td>\n<\/tr>\n<tr>\n<td style=\"width: 19.6787%;\"><b>Emission Limits<\/b><\/td>\n<td style=\"width: 32.5301%;\"><span style=\"font-weight: 400;\">Strict limits imposed on emissions<\/span><\/td>\n<td style=\"width: 48.5226%;\"><span style=\"font-weight: 400;\">No mandatory limits, voluntary participation<\/span><\/td>\n<\/tr>\n<tr>\n<td style=\"width: 19.6787%;\"><b>Market Participants<\/b><\/td>\n<td style=\"width: 32.5301%;\"><span style=\"font-weight: 400;\">Primarily regulated industries and governments<\/span><\/td>\n<td style=\"width: 48.5226%;\"><span style=\"font-weight: 400;\">Wider range of participants, including corporations, individuals, and NGOs<\/span><\/td>\n<\/tr>\n<tr>\n<td style=\"width: 19.6787%;\"><b>Motivation<\/b><\/td>\n<td style=\"width: 32.5301%;\"><span style=\"font-weight: 400;\">Regulatory compliance and avoiding penalties<\/span><\/td>\n<td style=\"width: 48.5226%;\"><span style=\"font-weight: 400;\">Environmental responsibility, brand reputation, and risk management<\/span><\/td>\n<\/tr>\n<tr>\n<td style=\"width: 19.6787%;\"><b>Credit Verification<\/b><\/td>\n<td style=\"width: 32.5301%;\"><span style=\"font-weight: 400;\">Rigorous verification and certification processes<\/span><\/td>\n<td style=\"width: 48.5226%;\"><span style=\"font-weight: 400;\">Varying levels of verification, often based on international standards<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><\/div>\n<p style=\"text-align: center;\"><span class=\"vc_button\"><a href=\"https:\/\/store.pw.live\/govt-entrance-exams\/upsc-books?utm_source=SEO&#038;utm_medium=PW+Live&#038;utm_campaign=UPSC+CSE+Books\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Check Out UPSC CSE Books From PW Store<\/span><\/a><\/span><\/p>\n<h2><span style=\"font-size: 18pt;\"><b>About Carbon Credit Trading Scheme (CCTS) in India<\/b><\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Carbon Credit Trading Scheme (CCTS) is a statutory framework established under the Energy Conservation (Amendment) Act, 2022 in India.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Act designates the Bureau of Energy Efficiency (BEE) as the nodal authority for overseeing the scheme\u2019s implementation and compliance.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It is designed to facilitate the creation of a domestic carbon market, aligning with India\u2019s climate commitments under the Paris Agreement.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The CCTS aims to provide an <\/span><b>economic mechanism for reducing greenhouse gas (GHG)<\/b><span style=\"font-weight: 400;\"> emissions by enabling the trade of carbon credits across industries.<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-size: 18pt;\"><b>Institutional Framework for Carbon Trading in India<\/b><\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>National Steering Committee for Indian Carbon Market (NSCICM): <\/b><span style=\"font-weight: 400;\">Established by the Central Government under the<\/span><b> Carbon Credit Trading Scheme<\/b><span style=\"font-weight: 400;\"> (CCTS).<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">It comprises members from various ministries and relevant organisations, chaired by the Secretary, <\/span><b>Ministry of Power, <\/b><span style=\"font-weight: 400;\">with co-chairmanship by the Secretary,<\/span><b> Ministry of Environment, Forest, and Climate Change.<\/b><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">It Recommends procedures, rules, and regulations for institutionalising and operating the Indian carbon market.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Sets emission targets, develops trading guidelines, and oversees the market\u2019s operations.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Advises on the issuance, renewal, or expiry of carbon credit certificates.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Bureau of Energy Efficiency (BEE):<\/b><span style=\"font-weight: 400;\"> Acts as the administrator of the CCTS and identifies sectors for GHG emission reduction, setting targets and issuing carbon credits. It also Manages carbon credit certification and market stability mechanisms.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Accredits verification agencies and determines fees and charges for implementation costs.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Maintains IT infrastructure, data security, and stakeholder capacity-building activities.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Grid Controller of India (GCI): <\/b><span style=\"font-weight: 400;\">It Registers entities and manages their carbon credit accounts.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Facilitates trading and maintains a secure database, functioning as a meta-registry for the Indian carbon market.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Central Electricity Regulatory Commission (CERC): <\/b><span style=\"font-weight: 400;\">It regulates trading activities under the Indian Carbon Market.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">It also approves power exchange business regulations for trading.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Provides market oversight and enforces corrective actions to prevent fraud.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Accredited Carbon Verification Agency (ACVA): <\/b><span style=\"font-weight: 400;\">Conducts validation and verification of GHG reduction activities.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Accredited by<\/span><b> BEE,<\/b><span style=\"font-weight: 400;\"> following detailed eligibility criteria and procedure.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><span style=\"font-size: 18pt;\"><b>Limitations of India&#8217;s Carbon Trading System<\/b><\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Limited Coverage:<\/b><span style=\"font-weight: 400;\"> Excludes major polluting sectors like electricity and agriculture, reducing its overall impact.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Delayed Implementation:<\/b><span style=\"font-weight: 400;\"> Potential economic costs due to delayed rollout, especially with global carbon pricing mechanisms like<\/span><b> CBAM.<\/b><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Effectiveness and Timing:<\/b><span style=\"font-weight: 400;\"> May take several years to significantly reduce emissions, and the effectiveness hinges on the system&#8217;s design and coverage.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Questionable Exclusions:<\/b><span style=\"font-weight: 400;\"> The exclusion of major polluting sectors raises concerns about the system&#8217;s ability to drive substantial emissions reductions.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Greenwashing:<\/b><span style=\"font-weight: 400;\"> Projects overstating environmental benefits, especially in forestry.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Lack of Stringent Verification:<\/b><span style=\"font-weight: 400;\"> Inadequate checks on carbon sequestration claims.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Additionality Concerns:<\/b><span style=\"font-weight: 400;\"> Projects claiming credit for activities that would have happened anyway.<\/span><\/li>\n<\/ul>\n<p style=\"text-align: center;\"><span class=\"vc_button\"><a href=\"https:\/\/www.pw.live\/batches\/upsc\/pw-only-ias?utm_source=seo+upsc+batch&#038;utm_medium=seo+upsc&#038;utm_campaign=seo&#038;utm_id=upsc\" target=\"_blank\" rel=\"noopener\">Enroll now for UPSC Online Classes<\/a><\/span><\/p>\n<h2><span style=\"font-size: 18pt;\"><b>Measures to Improve Carbon Trading<\/b><\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Robust Verification Protocols:<\/b><span style=\"font-weight: 400;\"> Strict verification procedures and a central registry to prevent double-counting.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Learning from International Best Practices:<\/b><span style=\"font-weight: 400;\"> Adopting standards from organisations like the Gold Standard.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Alignment with Global Standards:<\/b><span style=\"font-weight: 400;\"> Integrating with Article 6 of the Paris Agreement and preventing double-counting.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Transparency and Disclosure:<\/b><span style=\"font-weight: 400;\"> Detailed project information, third-party verification, and real-time tracking of credit transactions.<\/span><\/li>\n<\/ul>\n<div 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<\/p>\n","protected":false},"author":11,"featured_media":142614,"menu_order":0,"comment_status":"open","ping_status":"open","template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"tags":[],"paper-wise":[2089],"subject":[4642],"acf":[],"_links":{"self":[{"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/current-affairs\/142668"}],"collection":[{"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/current-affairs"}],"about":[{"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/types\/current-affairs"}],"author":[{"embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/comments?post=142668"}],"version-history":[{"count":4,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/current-affairs\/142668\/revisions"}],"predecessor-version":[{"id":142716,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/current-affairs\/142668\/revisions\/142716"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/media\/142614"}],"wp:attachment":[{"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/media?parent=142668"}],"wp:term":[{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/tags?post=142668"},{"taxonomy":"paper-wise","embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/paper-wise?post=142668"},{"taxonomy":"subject","embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/subject?post=142668"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}