The rise of voluntary carbon credit derivatives and how it can drive sustainable investments in India

economictimes.indiatimes.com:

sustainable investments and contribute to the country's ambitious decarbonization goals. By delving into VCC derivatives and electricity derivatives, the NSE aims to leverage its expertise in the financial markets to drive sustainable investments and pave the way for a greener future.

These initiatives hold the potential to unlock economic value, foster innovation, and accelerate India's progress towards a low-carbon economy.Potential of VCC Derivatives in IndiaThe National Stock Exchange (NSE) of India, in its quest to become a multi-asset stock exchange, is actively exploring opportunities in the VCC market. The introduction of VCC derivatives can serve as a catalyst for sustainable investments by providing investors with a new avenue to participate in the carbon credit market.

With an estimated 26 million voluntary carbon credits available in India, valued at around $150 million, the market holds significant potential.Creating a market for VCCsTo unlock the value of VCCs, it is crucial to establish a well-functioning market. The NSE recognizes this and is evaluating ways to build a robust market for VCCs.

By creating liquidity and price discovery mechanisms, the exchange aims to facilitate the monetization of carbon credits and attract a broader range of investors. This initiative aligns with the Indian government's efforts to decarbonize the economy through the trading of carbon credit certificates.Driving sustainable investmentsThe introduction of VCC derivatives can incentivize sustainable investments in India.

Investors, including institutions, corporations, and individuals, can participate in the VCC market, supporting projects that reduce greenhouse gas emissions and contribute to a greener future. By