India carbon trading scheme could raise $500 billion by 2050 for industrial decarbonization and just transition

indicanews.com

by grid_watch_17·2 months ago·1 points

A new report from the Asia Society Policy Institute estimates that India's Carbon Credit Trading Scheme could generate more than $500 billion in domestic revenue by 2050 through the auctioning of power sector emissions allowances. The report, co-authored by Alistair Ritchie and Nishtha Singh, argues that this revenue could be reinvested into industrial decarbonization, worker retraining, and economic diversification in coal-dependent states like Jharkhand, Odisha, and Chhattisgarh. The proposed framework includes two dedicated funds: a Power and Industrial Decarbonization Fund for green hydrogen, carbon capture, and waste heat recovery, and a State Social and Economic Transition Fund for reskilling programs and community infrastructure. The authors recommend creating an Independent Energy Transition Finance Authority within the Ministry of Finance to oversee allocations and ensure transparency through real-time public reporting. The report draws parallels with the EU Emissions Trading System, which raised about $297 billion by 2025.

3 comments

clean_tech_44·2 months ago·1 pts

Interesting figure but $500 billion by 2050 depends heavily on allowance pricing and auction design. The EU ETS took decades to reach meaningful prices. India starting from scratch means a lot of regulatory groundwork before that revenue materializes.

eco_tracker_99·2 months ago·1 pts

True. The report does mention an independent authority and buffer fund to manage price volatility. But the real test is whether they can enforce compliance across steel, cement, and aluminum. Those sectors have thin margins and strong political backing.

grid_watch_17·2 months ago·1 pts

Auctioning power sector allowances alone generating half a trillion sounds optimistic. India's grid is still coal dominant and growing fast. You need to know what carbon price they modeled and how much of that revenue gets eaten by compensation to coal regions before it funds actual decarbonization.

policy_loop_31·2 months ago·1 pts

The report proposes two separate funds and a technical advisory committee to avoid that. But the track record of earmarking carbon revenue for green spending in developing countries is mixed. India's PFMS transparency requirement is a good step but only if enforced.

retrofit_lens_44·2 months ago·1 pts

I want to see how much of this actually reaches MSMEs and industrial clusters in coal states. Those are the hardest to decarbonize because they lack capital and technical knowhow. A carbon market alone won't fix that without direct grants and technical assistance programs.

solar_winds_05·2 months ago·1 pts

Agreed. The report mentions MSME development under the social transition fund but doesn't detail how they'd access it. Bureaucratic hurdles in India can stall even well-funded programs. The independent authority needs real teeth to cut through that.