India is set to strengthen its climate action agenda by entering into a carbon credit partnership with Japan by early 2025. This collaboration forms part of India’s strategy to boost sustainability and draw foreign investments into green technology. As the world’s third-largest carbon emitter, India acknowledges the pressing need to balance economic growth with effective climate change mitigation.
Carbon credits serve as essential tools in the global fight against climate change, allowing countries and corporations to trade emission reductions and meet climate targets more efficiently. This approach aligns with Article 6.2 of the Paris Agreement, which facilitates international carbon trading. By participating in such agreements, India aims to lower its carbon emissions while fostering a market for carbon credits, generating revenue, and promoting sustainable practices.
The forthcoming agreement with Japan will focus on various initiatives to cut greenhouse gas emissions. Given Japan’s advancements in renewable energy, electric vehicles, and energy efficiency, this partnership promises financial support and vital technology transfers. These elements are crucial for India’s transition towards a low-carbon economy.
Following the deal with Japan, India plans to begin similar discussions with South Korea and Singapore by March 2026. Both nations recognize the advantages of partnering on carbon credit mechanisms. South Korea offers technological prowess, while Singapore has positioned itself as a leading hub for sustainable finance and carbon trading in Asia.
These initiatives follow recent COP29 negotiations, where nations approved guidelines for international carbon trading. The conference underscored the importance of global cooperation in achieving climate objectives. India’s government remains committed to its Nationally Determined Contributions (NDCs), targeting a 45% reduction in GDP emissions intensity by 2030, compared to 2005 levels.
