JOINT CARBON CREDIT MECHANISM

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Context: India and Japan are establishing a Joint Crediting Mechanism to share carbon credits, track projects, and boost low-carbon technology investments.

Details

• The proposed Joint Crediting Mechanism (JCM) between India and Japan is a strategic initiative aimed at enhancing bilateral cooperation in carbon crediting and carbon trading.

About Joint Crediting Mechanism (JCM)

• The JCM is designed to facilitate the exchange of emission reduction credits between India and Japan. This collaboration is aimed at helping both countries achieve their climate goals under the Paris Agreement, specifically their Nationally Determined Contributions (NDCs), which are commitments to reduce greenhouse gas emissions.
• A Memorandum of Cooperation (MoC) was signed between the governments of India and Japan. This document will outline the framework and procedures for implementing the JCM, ensuring both countries work together efficiently in managing and allocating carbon credits.

Key Components of the JCM

Structured Process for Carbon Credits	●Allocation: Carbon credits will be allocated through a structured process. This means that the distribution of credits will follow a predefined set of rules and procedures to ensure transparency and fairness. ●Registry: A registry will be established to track the carbon credits. This registry will help in maintaining records of credits issued, traded, and retired, thus providing a clear and accountable system for monitoring emissions reductions.
Joint Committee	●Role: A Joint Committee will be formed to oversee the JCM. This committee will be responsible for reviewing and approving projects, monitoring their progress, and ensuring compliance with the JCM rules. ●Project Clearance: Projects can only be undertaken once they are cleared by the Joint Committee. This process ensures that all projects meet the necessary criteria and contribute effectively to emission reductions. ●Credit Issuance: Both governments will notify the issuance of credits based on the reports submitted by the projects. This ensures that credits are issued accurately and reflect the actual emissions reductions achieved.
Project Implementation	●Technology Transfer and Capacity Building: Japan will assist in transferring technology, providing finance, and building capacity for new technologies related to the JCM. This support is crucial for implementing low-carbon and clean technologies effectively. ●Boosting Investment: The mechanism is expected to attract investments in low-carbon and clean technologies, leading to job creation and economic benefits.

Regulatory and Operational Framework

• Legal Compliance: The JCM will be implemented in accordance with relevant domestic laws and regulations in both India and Japan. This ensures that the mechanism operates within the legal frameworks of the two countries.
• Rules and Guidelines: The Joint Committee will develop rules and guidelines covering various aspects of the JCM, including project cycle procedures, methodologies, project design documents, monitoring, and third-party designations. These guidelines will help standardize the implementation and evaluation of projects.
• Credit Sharing and Double Counting:
  • Credit Allocation: The JCM credits can be used towards achieving Japan’s and India’s NDCs. The credits will be allocated based on mutual recognition, and steps will be taken to avoid double counting of credits. Double counting occurs when the same emission reductions are claimed by both countries.
  • International Mitigation Purposes: Each government can authorize a portion of JCM credits for international mitigation purposes, contributing to global climate efforts.

Timeline and Approval ●Cabinet Note: A draft Cabinet Note has been prepared and reviewed by the relevant ministries in India. This note authorizes the Ministry of Environment, Forest, and Climate Change (MoEFCC) to sign the MoC with the Japanese government. ●Approval Process: The draft has received approval from the Indian Environment Minister and will undergo further consultation with concerned ministries before finalization and signing.

Significance and Benefits

• Enhanced Bilateral Cooperation: The JCM represents a significant step in enhancing cooperation between India and Japan in the field of climate action. It builds on the Paris Agreement’s framework to foster international collaboration in reducing emissions.
• Support for Climate Goals: By facilitating the exchange of carbon credits, the JCM will help both countries meet their climate targets and transition towards low-carbon economies.
• Technological and Financial Support: The mechanism will promote the diffusion of advanced technologies and provide financial support, which is crucial for accelerating the adoption of clean technologies and achieving sustainable development goals.

Conclusion

• The Joint Crediting Mechanism between India and Japan is a strategic initiative aimed at fostering international collaboration in climate action. By establishing a structured process for carbon crediting, creating a joint committee for oversight, and facilitating technology transfer and investment, the JCM will help both countries achieve their climate goals while supporting global efforts to combat climate change.

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Source:

The Hindu

PRACTICE QUESTION Q. How can carbon pricing mechanisms, such as carbon taxes or cap-and-trade systems, be designed to ensure equitable outcomes, particularly for vulnerable populations and developing countries? What are the potential trade-offs between environmental effectiveness and social justice?