India-Japan Joint Carbon Crediting Mechanism Scheme

Reference

According to a cabinet note of July 2024, both India and Japan are planning to sign a Memorandum of Cooperation to establish a joint lending arrangement with sharing of emission reduction credits.

About Joint Carbon Crediting Mechanism Scheme

• Under the Joint Carbon Crediting Mechanism scheme, carbon credits will be “allocated through a structured process” and “there will be a registry to track these credits”.
• Projects under the scheme will be initiated only after they are approved through a joint committee and the two governments will notify the issuance of these credits based on the reports submitted.
• These credits will be allocated to the respective registries of India and Japan and can later be used for the Nationally Determined Contributions (a climate action plan for emission reductions and adaptation to climate impacts) of both countries.

Joint Credit Mechanism (JCM)

• The JCM between the two countries will be established under Article 6.2 of the Paris Climate Agreement.
• This mechanism will be implemented in accordance with the ‘relevant domestic laws and regulations’ in both the countries concerned.
• Under this mechanism, a Joint Committee will be established which will develop rules and guidelines required for the implementation of the JCM, which will include project cycle processes, methodology, project design documents, monitoring and designation of third party bodies etc.

Benefits of the scheme

• The proposal will promote job creation by attracting investments in low carbon and clean technologies.
• Such a project will also have financial implications for both countries.
• The Joint Credit Mechanism will support the dissemination of leading decarbonizing technologies, equipment, machinery, products, systems and infrastructure, implementation of mitigation actions, etc.
• Japan will facilitate transfer of technology, finance and capacity building in respect of new technologies for the Joint Credit Mechanism.