Carbon Credit Trading In India

I. Introduction

Climate change has redefined the global policy landscape, compelling nations to adopt market-based instruments that internalise the cost of emissions. In this backdrop, India has sought to balance its developmental imperatives with climate commitments under the Paris Agreement. The Energy Conservation Act, 2001 (as amended in 2022), together with the Notifications dated 28 June 2023¹ and 19 December 2023², introduced the Carbon Credit Trading Scheme, 2023 ("CCTS"), establishing the statutory foundation of the Indian Carbon Market ("ICM"). This marks a decisive transition from the earlier efficiency-driven mechanisms, such as the Perform, Achieve, and Trade (PAT) scheme, to a comprehensive national carbon trading system.