New Delhi: The Ministry of Environment, Forest and Climate Change has finalised the creation of a National Designated Authority (NDA) — a crucial step towards enabling carbon emissions trading in line with the Paris Agreement. The NDA will serve as the nodal body to regulate and oversee India’s participation in global carbon markets.
Backdrop: Article 6 of the Paris Agreement
Under the 2015 Paris Agreement, Article 6 outlines the framework for an international carbon market that allows countries to trade emission reductions and offsets. After years of negotiations, Article 6 was formally adopted at COP29 in Baku, Azerbaijan, in November 2024, clearing the way for nations to set up their own mechanisms.
Ensuring Credibility and Transparency
Although much of the groundwork for a global carbon trading system has been in place since 2022, key challenges remained — particularly ensuring that carbon credits are genuine, traceable, and transparent. The NDA will play a critical role in certifying projects, validating credits, and preventing double-counting of emissions reductions.
Why It Matters for India
The establishment of the NDA positions India to benefit from the emerging global carbon market while also aligning with its climate commitments. By enabling the regulated trade of carbon credits, India can attract investment in renewable energy, forestry, energy efficiency, and low-carbon technologies, while also helping industries transition toward sustainability.
Looking Ahead
With the NDA now operational, India is set to engage actively in international carbon markets under UN supervision. The move not only strengthens India’s climate diplomacy but also provides a framework for industries and investors to participate in the carbon economy — a step seen as vital in achieving India’s net-zero goals by 2070.