India’s carbon market will take time to emerge but its rewards could go beyond climate progress

The feeble outcomes of this year’s UN climate summit, CoP-30, held at Belém in Brazil were a reflection of today’s geopolitical realities. The US does not recognize the threat of global warming, while several other large economies like Russia, China and India are in no mood to embark on a roadmap to phase out fossil fuels.

This does little to counter nature’s response to the rise in heat-trapping carbon and methane emissions, seen in all kinds of environmental disasters like forest fires stoked by drought and increasingly heavy rainfall and floods.Earlier this week, the EU’s Earth observation service Copernicus noted that for the first time, a three-year average from 2023 to 2025 is about to exceed the 1.5° Celsius cap on warming (above the pre-industrial level), after which the planet faces irreversible damage. Hopes of slowing our descent into climate disaster are largely pinned on advances in clean technology.

Displacing high-emission fossil fuels for energy has been made easier by solar panel costs dropping 90% over the past decade and battery storage costs softening more recently.For industry, a key breakthrough includes a process that eliminates the release of carbon into the air while converting natural gas to hydrogen, which can be used as a fuel. India has been an early adopter of clean-tech, thanks to enabling policies designed to decarbonize electricity supply.

As a result, renewables account for half our generation capacity.But the challenge gets far steeper from here on. For industries to emit less, they must invest in clean equipment in a manner that yields profits.

Two months ago, the government set legally binding emission targets for a handful of energy-intensive sectors. These goals are premised on