How new policy will generate revenue from carbon credits (CARBON CREDIT MONETISATION), Pg8

Key Highlights:

• The Delhi government approved a framework for carbon credit monetisation to generate revenue by selling carbon credits earned through green projects.
• The policy aims to monetize emission reductions from initiatives like electric buses, plantation drives, solar energy promotion, and waste management.
• A specialized agency will handle documentation and registration of carbon credits according to international norms, with proceeds going to the Consolidated Fund of the State.
• Globally, carbon pricing covered 28% of global emissions in 2023, raising over $100 billion in revenue.

Detailed Insights:

• A carbon credit represents one tonne of carbon dioxide reduced, avoided, or removed from the atmosphere through a specific project.
• Companies buy carbon credits to meet emission reduction targets, either voluntarily for Corporate Social Responsibility (CSR) or to comply with government regulations.
• There are approximately 80 carbon trading regimes worldwide, established by international non-profits or governments, with India currently developing its own carbon market.
• The value of a carbon credit varies from $1 to over $100 based on market dynamics, demand, supply, and credit types, as verified by accredited third-party firms.
• Maharashtra approved a similar policy 4-5 months ago, making Delhi one of the pioneering states to implement such a mechanism for financial incentives in carbon emission reduction.

Key Concepts Involved:

• Carbon Credit: A permit representing one tonne of carbon dioxide removed from the atmosphere.
• Carbon Market: A trading system where carbon credits are bought and sold.
• Consolidated Fund: A government account where all revenues and receipts are deposited.