India’s Role in Advancing South-South Climate Cooperation

GS3 –ENVIRONMENT  

Context: India has the potential to play a significant role in strengthening climate collaboration among developing countries under Article 6.2 of the Paris Agreement, facilitating global climate solutions.

Article 6 of the Paris Agreement

• Carbon Markets: This provision enables the exchange of carbon credits to fulfill emission reduction commitments, allowing India to generate revenue by selling surplus credits.
• Cooperative Approaches: It supports joint initiatives between nations to curb emissions and promote sustainable growth.
• Non-Market Strategies: Encourages knowledge sharing, financial support, and capacity-building for climate resilience.
• Flexibility: Assists India in achieving its Nationally Determined Contributions (NDCs) while maintaining a balance between economic progress and sustainability.

India’s Climate Commitments and Policies

• As the third-largest greenhouse gas (GHG) emitter, India must align its developmental objectives with its climate responsibilities.
• National Goals: India aims to cut emissions intensity by 45% by 2030 and urges developed nations to contribute $1 trillion annually in climate finance.
• Carbon Credit Trading Scheme (CCTS) 2023: Strengthens carbon credit monitoring, verification, and integration into national policies.
• Past Experience: India’s participation in the Clean Development Mechanism (CDM), Voluntary Carbon Market (VCM), Energy Saving Certificates (ESCerts), and Renewable Energy Certificates (REC) establishes a strong foundation for leveraging Article 6.2.

Opportunities for India Under Article 6.2

• Mobilizing Climate Finance: Transactions involving Internationally Transferrable Mitigation Outcomes (ITMOs) can attract investments for green initiatives. In 2022, India’s renewable energy sector received $10 billion in foreign direct investment (FDI).
• Technology and Knowledge Sharing: India can collaborate with nations such as Japan, the EU, and South Korea in areas like solar energy, green hydrogen, energy storage, and carbon capture.
• Strengthening South-South Partnerships: Joint efforts with African countries can enhance climate-resilient infrastructure, renewable energy deployment, and agricultural adaptation strategies.
• Advancing Sustainable Development Goals (SDGs): ITMO transactions contribute to job creation, pollution reduction, and energy security.
• Carbon Trading in Developing Economies: India can sell carbon credits to countries struggling to meet their NDCs, leveraging its expertise in emission reduction initiatives.
• Clean Energy Collaboration: India can co-develop renewable energy projects with other developing nations to scale up climate-friendly solutions.
• Institutional Capacity Building: Assisting partner nations in establishing robust Monitoring, Reporting, and Verification (MRV) systems for accurate carbon credit tracking.

ITMOs, a mechanism under the Paris Agreement, allow nations to offset emissions by financing mitigation projects abroad. They enhance sustainability, environmental integrity, transparency, and promote global carbon trading and technology exchange.

Challenges in Utilizing ITMOs and Climate Finance

• Opportunity Costs: Selling ITMOs could reduce India’s ability to use those credits for its own climate objectives.
• Shifting Responsibility: Developed nations might prefer purchasing ITMOs rather than implementing their own domestic emission reductions.
• Transparency Concerns: Weak governance in ITMO trading could lead to inefficiencies and inequitable practices.
• Environmental Integrity Risks: The possibility of low-quality credits or double counting could weaken global climate commitments.
• Institutional Coordination: Aligning national policies with international climate finance frameworks remains a challenge.

India-Africa Climate Cooperation: A Strategic Priority

• Africa’s Climate Vulnerability: Sectors like agriculture and water resources are significantly affected by climate change.
• Renewable Energy Potential: African nations possess abundant solar and wind energy resources, which align well with India’s expertise in renewable energy.
• Economic Collaboration: In line with India’s 10 Principles for India-Africa engagement, India prioritizes capacity-building and sustainable development projects.
• Joint Crediting Mechanism (JCM): India can adopt Japan’s model to ensure transparent and equitable allocation of credits in ITMO transactions.

Mains question

Analyze the opportunities and challenges for India in utilizing Internationally Transferrable Mitigation Outcomes (ITMOs) under the Paris Agreement. How can India balance economic growth with climate commitments?