Finance Minister Nirmala Sitharaman on Thursday urged the International Financial Services Centre (IFSC) at GIFT City to develop a platform where green credits can be traded. She said this would help India meet its net zero commitment by 2070 and bridge the funding gap of USD 10.1 trillion.
What are green credits?
Green credits are certificates that represent the environmental benefits of reducing greenhouse gas emissions or enhancing carbon sinks. They can be issued by entities that undertake activities such as afforestation, renewable energy generation, solid waste management, etc. These credits can then be sold or traded to buyers who want to offset their own emissions or comply with regulatory requirements.
Why does India need a green credit trading platform?
India has pledged to achieve net zero emissions by 2070, which means that it will balance its greenhouse gas emissions with removals by carbon sinks. This is a challenging task, considering that India’s emissions are expected to grow as its economy and population expand. According to Sitharaman, India has a funding gap of USD 10.1 trillion to meet its net zero goal.
A green credit trading platform can help mobilize financial resources for low-carbon development and incentivize green practices among various stakeholders. It can also create a market for green products and services and enhance India’s competitiveness in the global arena.
How will IFSC facilitate green credit trading?
Sitharaman said that the IFSC at GIFT City has the potential to become a hub for green finance and innovation. She said that the direct listing of stocks in IFSC exchanges, which was announced last year, will enable Indian companies to access global funds easily. She also suggested that the IFSC should host a platform where green credits can be bought and sold by people who are planting trees, using renewable energy, managing solid waste, etc.
She said that such a platform would attract international investors and buyers who are looking for credible and transparent green credits. She also said that it would create opportunities for Indian entrepreneurs and innovators who are working on green solutions.
What are the benefits of green credit trading?
Green credit trading can have multiple benefits for India’s economy, environment and society. Some of them are:
- It can help India achieve its climate targets and contribute to the global efforts to combat climate change.
- It can foster green growth and development by creating jobs, enhancing skills, improving infrastructure and promoting innovation.
- It can reduce India’s dependence on fossil fuels and improve its energy security and diversity.
- It can improve India’s air quality and public health by reducing pollution and emissions.
- It can protect India’s natural resources and biodiversity by conserving forests, water and soil.