Cap and Trade Comes To India Ahead Of USA

Posted on 27. Aug, 2009 by Ross in Asia, Climate Change, Government Policy

In a bold move designed to stir up the landscape of international climate change diplomacy, the Indian government has set the foundations for an imminent carbon cap-and-trade scheme to reduce domestic energy consumption by 5% by 2015.

Despite still refusing to set a stringent target for carbon dioxide emissions ahead of the Copenhagen Conference in December, India’s system which is based on Europe’s emission trading scheme (ETS) sends a clear signal that the developing powerhouse is firmly at the negotiating table, despite wrangling with the US and other developed countries.

Indeed, knowing the shaky ability of cap-and-trade schemes to deliver immediate savings might be one of the main reasons that India still refuses to fall into line with other nations and commit to a target. Despite its population growing at a substantially faster rate than China’s (by the time that you’ve read this article - around two minutes - 110 babies will have been born in China whilst 158 will be born in India), India feels that it will be able to sustain both economic and population growth whilst reducing emissions by aggressively pursuing nuclear and renewable energy whilst making their notoriously inefficient industrial sector more energy efficient.

At the moment India is the world’s fourth most polluting nation: a 5% cut in carbon emissions would equate to saving 100 million tonnes of carbon dioxide.

India hopes to save 10GW of energy by 2012 through energy efficiency alone. It last month set mandatory energy efficiency ratings for electric appliances which are due to expand to cover all electrical equipment manufactured or sold in the country.

Saving energy has become a hot topic in India in recent weeks, the weak monsoon rains are failing to replenish the country’s hydroelectric power stations which supply 25% of India’s energy supplies, leaving the country perilously close to severe power shortages.

Image by Alex Graves @ Flickr