Emissions Trading And Carbon Credits In India: A Legal Perspective

INTRODUCTION

India is the world’s third–largest emitter of greenhouse gases (“GHG”), accounting for roughly 7% of global emissions, yet its per capita emissions remain well below those of most developed economies.¹ That contrast frames India’s central climate challenge: sustaining economic growth while meeting its environmental commitments. Under the Paris Agreement, India has pledged to reduce the emissions intensity of its GDP from 2005 levels by 45% by 2030 and to reach net–zero emissions by 2070.²

Meeting these targets requires India to move from a coal–dependent economy toward renewable energy and cleaner technologies – a transition that calls for market–based tools capable of reconciling growth with decarbonisation. Emissions trading is one such tool. This article explains what emissions trading is, how it works internationally, and how India’s own legal framework – now anchored by the Carbon Credit Trading Scheme – has taken shape.