{"id":199561,"date":"2022-08-10T18:14:53","date_gmt":"2022-08-10T12:44:53","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=199561"},"modified":"2022-08-10T18:16:31","modified_gmt":"2022-08-10T12:46:31","slug":"a-carbon-markets-form-must-follow-its-function","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/a-carbon-markets-form-must-follow-its-function\/","title":{"rendered":"A carbon market\u2019s form must follow its function"},"content":{"rendered":"\n

Source<\/strong>: The post is based on the article \u201cA carbon market\u2019s form must follow its function\u201d<\/strong> published in the Live Mint<\/strong> on 9th<\/sup> August 2022.<\/strong><\/p>\n

Syllabus<\/strong>: GS 3 Ecology and Environment; Infrastructure and Energy<\/p>\n

Relevance: <\/strong>Market Intervention for Combating Climate Change<\/p>\n

News:<\/strong> This week, the Lok Sabha passed the Energy Conservation (Amendment) Act of 2022<\/strong> before sending an update of India\u2019s plans to the United Nations Framework Convention on Climate Change (UNFCCC).<\/p>\n

Prime Minister of India revised India\u2019s climate commitment<\/strong> at last year\u2019s CoP-26 summit in Glasgow<\/strong><\/p>\n

(1) By 2030, India aims at around 50% energy drawn from sources other than fossil fuels.<\/p>\n

(2) India would release 45% less dirty emissions for every rupee of economic output than we did in 2005.<\/p>\n

(3) India would also achieve carbon neutrality by 2070.<\/p>\n

Proposed bill<\/strong><\/h5>\n

The bill amends the Energy Conservation Act 2001. <\/strong>The move will let the government specify standards of energy<\/strong> use by various groups of users, with mandates for clean<\/strong> sources<\/strong> in their usage mix.<\/p>\n

The bill proposes to set up a market platform<\/strong> locally for the trading of carbon credits.<\/strong><\/p>\n

About the carbon market<\/strong><\/h5>\n

The idea works by placing a price tag on a fungible tonne of carbon exhaust. Further,<\/strong> the prices of carbon units are based on the forces of demand and supply in a system of dynamic burden sharing<\/strong>. In this, the emitters pay the cost to buy credit for their own financial well-being, and the ones outperforming the green energy target will sell those credits.<\/p>\n

The carbon market functions with a \u2018cap and trade\u2019 mechanism<\/strong>. In this, a legal limit is set on emissions.<\/p>\n

It allows the entities which are spouting more gases than their annual allowance to buy add-on rights, while efficient carbon compressors<\/strong> could sell their surplus to the defaulters.<\/p>\n

Why did India need a carbon market?\u00a0\u00a0<\/strong><\/h5>\n

It is a form of market intervention, which is a key element of economic success. For example, it works upon private incentives.<\/p>\n

The deployment of private incentives and market signals helps to stall climate change.<\/p>\n

What should be done?<\/strong><\/h5>\n

The cap-and-trade limit<\/strong> should be tightened over the years in accordance with our climate goals.<\/p>\n

For this, emission c<\/strong>aps should be placed and should be calibrated with full transparency. For instance,<\/strong> the scientific data used for their basis, devices used for exhaust evaluation, and other elements of our policy frame must always be kept amenable to scrutiny.<\/p>\n

It\u2019s crucial that cap-and-trade<\/strong> does not end up as an inspect-and-extort regime<\/strong> in India. For this, a tech-enabled model of open verification can be adopted by the government.<\/p>\n

The past certificates issued by the Bureau of Energy Efficiency (BEE) could be enlisted under a cap-and-trade plan.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source: The post is based on the article \u201cA carbon market\u2019s form must follow its function\u201d published in the Live Mint on 9th August 2022. Syllabus: GS 3 Ecology and Environment; Infrastructure and Energy Relevance: Market Intervention for Combating Climate Change News: This week, the Lok Sabha passed the Energy Conservation (Amendment) Act of 2022… Continue reading A carbon market\u2019s form must follow its function<\/span><\/a><\/p>\n","protected":false},"author":10343,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216,10501],"class_list":["post-199561","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","tag-live-mint","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/199561","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10343"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=199561"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/199561\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=199561"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=199561"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=199561"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}