Environment
Ans :-The pursuit of carbon credit under CDM under UNFCCC is an important instrument to combat climate change but, due to the declining value of carbon credit, raises questions about its effectiveness.
There are several reasons for the continuation of carbon credit and CDM as :-
1. Carbon credit provides a mechanism for companies to reduce their carbon footprints and contribute to greenhouse gas reduction.
2. It also empowers developing countries to reduce their carbon emissions and contribute to climate change control
3. Companies and developing countries can also generate revenue through the sale of these carbon credits
4. It also facilitates technology transfer to developing countries
5. It also finances sustainable practices across the globe
6. It also strengthens global cooperation between developed and developing countries .
Challenges of carbon credit and Clean Development Mechanism :-
1. As the value of carbon credits is decreasing, which makes it less attractive for companies.
2. The carbon credit market is a time-consuming process which discourages companies from investing in it .
3. It has a complex verification and accountability process
4. Greenwashing is another issue where companies appear environmentally clean without making any substantive change .
5. Developing countries face challenges in accessing the resources for carbon credit .
6. The greater emphasis on carbon credit and CDM can discourage countries to explore other effective mechanisms.
India’s energy needs and economic growth :-
Despite fluctuations in the carbon credit market, India need not give up on this mechanism as -
1. India’s Panchamrit and INDCs are aligned with the carbon credit market
2. India is a growing economy which needs large amounts of energy to fuel its development.
3. Developing countries like India can’t compromise their growth on accounts of environmental sustainability. The carbon credit mechanism supplements economic growth and sustainability.
4. India’s large energy needs are fulfilled by thermal energy, which needs balance with clean fuels . It would be easy with a carbon credit mechanism.
Even though the carbon credit value is declining for economic development along with environmental sustainability, the carbon credit mechanism and CDM provide a way forward for developing countries like India . It needs to be reframed as per new market realities.