A new analysis from the Observer Research Foundation warns that India's Carbon Credit Trading Scheme could fail if regulators do not enforce strict market discipline. The study points to a legacy glut of 10.3 million Energy Saving Certificates issued under the old PAT scheme, against only 5.2 million that were required to be purchased. If these old certificates are converted to carbon credits without tight limits, the market could be flooded and the carbon price destroyed before it matures. The report also flags enforcement gaps. Under the PAT scheme, companies that missed targets faced soft penalties and were still allowed to trade. The author argues that the CCTS will regulate the same industrial entities, so a cultural expectation of weak enforcement is already set. Without real penalties and credible monitoring, the new market will not drive long-term decarbonization investment.
