India and Japan Establish Joint Crediting Mechanism to Reduce GHG Emissions and Enhance Cooperation

India and Japan have formalised a partnership to collaborate on carbon credit trading under the Paris Agreement. This initiative aims to assist India in acquiring funds and technology for its climate objectives while enhancing bilateral relations. The Union environment ministry announced the signing of a Memorandum of Cooperation (MoC) with Japan on the Joint Crediting Mechanism (JCM) under Article 6.2 of the Paris Agreement.

The Joint Crediting Mechanism, initiated by Japan, is designed to aid developing nations in adopting low-carbon technologies. Unlike the older Clean Development Mechanism, JCM treats both countries as co-implementers, sharing emission reduction credits. Projects under JCM will benefit from investment, technology transfer, and capacity building support.

Joint Crediting Mechanism and Its Benefits

The JCM is expected to facilitate investment flow and technological assistance, including technology transfer and capacity building for projects involving low-carbon technologies. This mechanism could help India reduce costs by attracting foreign investment and expertise while also boosting domestic capacity to manufacture clean energy equipment and systems.

India's commitment to achieving net zero emissions by 2070 necessitates expensive technologies that require viability gap funding. The JCM could play a crucial role in bridging this gap by providing financial and technical support. This agreement was highlighted by Prime Minister Narendra Modi during his visit to Japan, emphasising the Indo-Japan cooperation theme of Green Energy Focus for a Better Future.

Carbon Credit Trading and International Cooperation

The agreement allows India to trade carbon credits generated under Article 6.2 of the Paris Agreement with Japan and other countries. The ministry clarified that this will not impact India's Nationally Determined Contributions (NDCs). Several Asian countries, including Singapore, have already entered into similar agreements under Article 6.2.

The ministry has received Cabinet approval to finalise the Rules of Implementation for these agreements. It plans to sign similar pacts with other countries in consultation with various ministries and the Ministry of External Affairs. This development underscores India's strong commitment to climate action and marks another milestone in implementing the Paris Agreement.

The pact between India and Japan signifies a significant step towards achieving climate goals through international collaboration. By leveraging foreign investment and expertise, India aims to advance its clean energy initiatives while strengthening ties with Japan and other nations committed to environmental sustainability.

With inputs from PTI