India’s National Designated Authority for Carbon Trading
India has recently established a National Designated Authority (NDA) to manage carbon emissions trading under the 2015 Paris Agreement. This move follows the finalisation of Article 6 at the 29th UN Climate Change Conference of Parties (COP29) held in Baku, Azerbaijan in November 2024. The NDA is important step towards operationalising a carbon market to meet India’s climate commitments.
Background of Article 6 and Carbon Markets
Article 6 of the Paris Agreement outlines the framework for international carbon emissions trading. It enables countries to cooperate in achieving their emission reduction targets through market mechanisms. The article was a contentious issue for years and was only resolved in late 2024. The agreement ensures transparency and credibility in carbon credit generation and trading.
Formation and Composition
India’s NDA is a 21-member committee led by the Secretary of the Ministry of Environment, Forest and Climate Change. Members include officials from the Ministries of External Affairs, Steel, Renewable Energy and the policy think tank NITI Aayog. The Environment Ministry holds the largest representation. The NDA acts as the central authority for carbon market governance in India.
Roles and Responsibilities
The NDA recommends which activities qualify for emission reduction trading under Article 6. It continuously updates this list based on national sustainability goals and priorities. The body evaluates, approves and authorises projects that generate emission reduction units. It also sanctions the use of these units for India’s Nationally Determined Contributions (NDCs) compliance.
India’s Nationally Determined Contributions (NDC)
India’s NDC targets include reducing the emission intensity of its GDP by 45% by 2030 compared to 2005 levels. It aims to achieve 50% of electric power capacity from non-fossil fuel sources by 2030. Additionally, India plans to create a carbon sink of 2.5 to 3 billion tonnes of CO₂ equivalent through afforestation by 2030. The NDA supports these goals by facilitating carbon credit trading.
Significance of the Carbon Market
The carbon market will help India mobilise investments in clean technologies and renewable energy. It provides economic incentives for emission reductions while ensuring environmental integrity. The NDA’s role is vital to maintain transparency and avoid double counting of emission reductions. This system aligns India with global climate action efforts.
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