CEF Insights

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April
Others

India Inc should prepare for a national carbon market

Author
Arjun Dutt

Notable because

A national carbon market will have wide-ranging implications for Indian corporates. It should be considered against the context of an ecosystem where Scope 1 and 2 emissions disclosure will become mandatory for large listed companies under SEBI’s Business Responsibility and Sustainability Report (BRSR) reporting. Internal carbon pricing can be a valuable tool for corporates looking to direct capital towards internal low-carbon investments and, in the process, lowering external capital outflow requirements for carbon credit purchases.

What to look out for in the months ahead

Shadow carbon credits already exist in the form of renewable energy certificates (REC), which assign a value to the green component of electricity. What will be the price of carbon that is eventually crystallised on the carbon market, and how will fungibility work between carbon credits and RECs?