India, Japan finalise joint crediting mechanism to cut GHG emissions

New Delhi, Aug 29 (PTI) India and Japan have signed an agreement to work together on carbon credit trading under the Paris Agreement, a move that could help India access funds and technology for its climate goals while also strengthening bilateral ties.

The Union environment ministry said it has signed a Memorandum of Cooperation (MoC) with Japan on the Joint Crediting Mechanism (JCM) under Article 6.2 of the Paris Agreement.

The ministry said the development "demonstrates India's firm commitment to climate action and marks yet another milestone in the implementation of the Paris Agreement".

The pact was signed earlier this month and was highlighted by Prime Minister Narendra Modi during his ongoing visit to Japan as part of the Indo-Japan cooperation theme of "Green Energy Focus for a Better Future".

The Joint Crediting Mechanism is a bilateral system launched by Japan to support developing countries in adopting low-carbon technologies, with both countries sharing the emission reduction credits.

It is different from the older Clean Development Mechanism as it treats both partners as co-implementers rather than just host and donor. The ministry said projects under JCM will receive support through investment, technology transfer and capacity building.

"The JCM will encourage the flow of investment, technology assistance, including technology transfer and capacity building support for the implementation of projects involving these low-carbon technologies," it said.

The ministry said while India has committed to reaching net zero by 2070, the shift requires expensive technologies that need viability gap funding.

The JCM could help reduce these costs by attracting foreign investment and expertise, while also building domestic capacity to manufacture equipment and systems for clean energy.

The pact also allows India to trade carbon credits generated under Article 6.2 of the Paris Agreement with Japan and other countries.

The ministry said this will not affect India's Nationally Determined Contributions (NDCs). Several countries in Asia, including Singapore, have already signed similar pacts under Article 6.2.

The ministry said it has received Cabinet approval to finalise the Rules of Implementation and to sign similar agreements with other countries in consultation with other ministries and the Ministry of External Affairs. PTI GVS RHL