Lesson 58 of 70 7 min Premium

India's Climate Policy: NDCs, Mitigation, Adaptation and Carbon Markets

India's emissions profile

Total and per capita: India is the third-largest emitter in total, after China and the US, with about 7% of global GHG emissions. Its per capita emissions are about 2 t CO₂ (about 2.9 t CO₂e including all gases), far below the world average.

By sector:

energy (electricity, transport, industry) dominates, about 75%;
agriculture about 13% (methane from paddy and livestock);
industrial processes about 8%;
waste.

Emissions intensity of GDP has fallen, by about 36% from 2005 to 2020 (India's Biennial Update Report 4, 2024).

India's NDC

First NDC (2015):

reduce emissions intensity of GDP by 33–35% from 2005 levels by 2030;
40% of power capacity from non-fossil sources by 2030. This was achieved in 2021;
create an additional carbon sink of 2.5–3 billion t CO₂e through forests.

Table comparing India's 2015 and updated 2022 NDC targets on emissions intensity, non-fossil capacity, carbon sink and lifestyle with their status — India met its capacity targets years ahead of schedule.

Updated NDC (August 2022):

45% reduction in emissions intensity by 2030 (from 2005);
50% of installed power capacity from non-fossil sources by 2030. Reached in mid-2025, five years early;
the carbon sink target is unchanged;
LiFE was added as a goal.

Panchamrit (COP26, 2021): five commitments:

500 GW of non-fossil capacity by 2030;
50% of energy requirements from renewables by 2030;
a reduction of 1 billion tonnes in projected emissions by 2030;
reducing carbon intensity by 45%;
net zero by 2070.

Not all of these were formally included in the NDC.

Long-Term Low Emission Development Strategy (LT-LEDS, November 2022): India's pathway to net zero by 2070, covering electricity, transport, urbanisation, industry, carbon dioxide removal and finance.

NDC 3.0: due for 2035. Check the latest submission.

National Action Plan on Climate Change (NAPCC, 2008)

Released by the PM's Council on Climate Change, it has eight missions:

National Solar Mission;
Enhanced Energy Efficiency: the Perform, Achieve and Trade (PAT) scheme;
Sustainable Habitat;
Water Mission: 20% higher water-use efficiency;
Sustaining the Himalayan Ecosystem;
Green India: afforestation;
Sustainable Agriculture;
Strategic Knowledge for Climate Change.

Organogram of the eight missions of the National Action Plan on Climate Change grouped as energy, habitat and water, ecosystems, and agriculture and knowledge — States implement the plan through State Action Plans on Climate Change.

New missions on health and coastal areas have been proposed. States have State Action Plans on Climate Change (SAPCC).

Mitigation measures

Energy:

renewables (see the energy infrastructure lesson);
energy efficiency: the UJALA LED programme (over 36 crore bulbs), star labelling, the Energy Conservation Building Code, and the PAT scheme;
green hydrogen;
nuclear;
gradual coal plant retirement.

Transport: EVs, ethanol blending, rail electrification, and dedicated freight corridors.

Industry: steel and cement decarbonisation roadmaps, and green steel taxonomy (2024).

Forests and land: Green India Mission, Nagar Van, and the Green Credit Programme.

Carbon markets

The Energy Conservation (Amendment) Act 2022 empowers the Centre to establish a carbon market.

Flowchart of India's Carbon Credit Trading Scheme from target setting to verification, certificate issue, purchase by underperformers and trading on power exchanges — The scheme builds on the PAT energy efficiency market launched in 2012.

Carbon Credit Trading Scheme (CCTS, 2023):

compliance mechanism: GHG emission intensity targets for energy-intensive sectors (aluminium, cement, chlor-alkali, pulp and paper; refineries, petrochemicals, textiles and steel were added later). Targets were notified in 2025 for the first sectors. Entities that beat their targets earn Carbon Credit Certificates to sell to those that miss;
offset mechanism: voluntary projects earn credits;
administered by the Bureau of Energy Efficiency (BEE), which also prepares the Indian Carbon Market;
credits trade on power exchanges, regulated by the CERC;
it builds on the PAT scheme (2012), which traded ESCerts (energy saving certificates).

Significance:

cost-effective emission cuts;
a response to CBAM: carbon priced at home could be credited at the EU border;
links with Article 6 of the Paris Agreement.

Adaptation

Why adaptation matters: India is highly vulnerable, and adaptation is a national priority. India spends substantial domestic resources on it (estimated at about 5–6% of GDP of adaptation-relevant spending).

Key adaptation actions:

Heat Action Plans: Ahmedabad (2013), NDMA guidelines, and state and city plans;
climate-resilient agriculture: NICRA (National Innovations in Climate Resilient Agriculture, ICAR), stress-tolerant varieties, and climate-resilient villages;
water: Jal Shakti Abhiyan, micro-irrigation and watershed management;
disaster risk reduction: early warning systems (IMD's impact-based forecasts; the Common Alerting Protocol cell broadcast system), cyclone shelters and CDRI;
coastal: mangrove restoration (MISHTI) and shoreline management;
health: the National Programme on Climate Change and Human Health.

Funding: the National Adaptation Fund for Climate Change (2015). India submitted its first Adaptation Communication in 2023, and is preparing a National Adaptation Plan.

Climate finance and green finance in India

Needs: India's NDC needs are estimated at about $2.5 trillion (2015–2030), with trillions more for net zero.

Domestic tools:

Sovereign Green Bonds (first issued in January 2023);
a climate finance taxonomy (draft 2025) to define green investments;
the RBI's guidelines on climate risk disclosure for regulated entities (draft 2024);
green deposits framework (2023);
SEBI's BRSR Core for ESG disclosure.

Analysis

India's strengths: rapid renewable growth, early achievement of NDC targets, and a constructive international role (ISA, LiFE).

Challenges:

continued coal dependence for energy security;
a large finance gap;
the just transition for coal regions such as Jharkhand and Chhattisgarh;
adaptation spending crowding out development;
trade measures (CBAM).

India's case: a development-first, low-carbon pathway, with CBDR and climate justice as anchors.

Common prelims traps

The updated NDC target is 50% non-fossil capacity (installed), not 50% of generation.
The NAPCC has eight missions.
The CCTS is administered by BEE; trading is regulated by CERC.
Net zero is targeted for 2070.

Quick self-test

*What does the PAT scheme do?* Sets energy efficiency targets for industries and lets them trade energy saving certificates.
*Why is India's emissions intensity falling while total emissions rise?* GDP is growing faster than emissions.
*What is a just transition?* Shifting from fossil fuels in a way that protects affected workers and communities.

Practice: Mains question

*"India's climate policy seeks to balance development needs with global climate responsibilities." Examine with reference to its updated NDC and carbon market. (250 words)*

Key terms

Emissions intensity: emissions per unit of GDP. It falls when the economy grows faster than its emissions.
Net zero: a balance between the greenhouse gases emitted and the gases removed by sinks or technology.
Mission LiFE: Lifestyle for Environment, launched in 2022, which promotes mindful consumption.
Green Credit Programme (2023): a market-based incentive for voluntary environmental actions such as tree plantation and water conservation, run under the Environment Protection Act.
ESCerts: tradable Energy Saving Certificates under the PAT scheme.

Analysis: the just transition

Coal still supplies most of India's electricity. Coal districts such as Dhanbad, Korba and Angul depend on mining for jobs, local revenue and the District Mineral Foundation funds.

A just transition requires:

reskilling workers;
economic diversification in coal regions;
repurposing mine land, for example for solar parks;
social protection;
careful sequencing, so that energy security is not compromised.

India has argued that the pace of its transition must match the availability of finance and technology. International partnerships, such as the Just Energy Transition Partnerships offered to South Africa, Indonesia and Vietnam, are seen as possible models, though India has not signed one.

Answers should show both ambition and pragmatism, and cite India's early achievement of its NDC targets as evidence of credibility.

Practice: additional question

*Discuss the significance of the Carbon Credit Trading Scheme for India's industrial decarbonisation in the context of the EU's CBAM. (150 words)*

⚡ Quick revision

India 3rd largest total emitter (~7%); per capita ~2 t CO₂; energy ~75% of emissions; intensity −36% (2005–20)
NDC 2015: 33–35% intensity cut, 40% non-fossil (met 2021), 2.5–3 Gt sink; updated Aug 2022: 45% intensity, 50% non-fossil (met mid-2025), LiFE
Panchamrit (COP26): 500 GW, 50% RE energy, −1 Gt, 45% intensity, net zero 2070; LT-LEDS Nov 2022
NAPCC 2008: 8 missions; SAPCCs
CCTS 2023 (BEE; CERC; compliance + offset); EC (Amendment) Act 2022; PAT 2012
Adaptation: Heat Action Plans (Ahmedabad 2013), NICRA, NAFCC 2015; first Adaptation Communication 2023; Sovereign Green Bonds Jan 2023

The natural process by which certain gases in the atmosphere absorb heat radiated from the Earth's surface and re-emit it, keeping the planet far warmer than it would otherwise be; human emissions are strengthening it and causing global warming.The market value of all final goods and services produced within a country's borders in a given period. This hub page shows where GDP turns up across the syllabus as a yardstick; the measurement methods are covered in the linked lesson.A state in which the greenhouse gases a country, company or the world emits are balanced by an equal amount removed from the atmosphere, so that net additions to the atmosphere are zero.The increase in the share of a country's population living in towns and cities, driven by natural growth, migration from villages and the reclassification of rural areas as urban, along with the economic and social changes that come with it.Long-term shift in temperature and weather patterns, now driven mainly by greenhouse gas emissions. Full coverage: Climate Change (module).The young fold-mountain system that arcs about 2,400 km along India's northern frontier from the Indus gorge to the Brahmaputra bend. This hub page links the range's role in climate, rivers, hazards, ecology and security; physiography in depth is in the linked lesson.A national programme approved in January 2023 with an initial outlay of ₹19,744 crore to make India a global hub for producing, using and exporting green hydrogen, made by splitting water with renewable electricity, with a target of at least 5 million tonnes of production capacity a year by 2030.The National Mission for a Green India (Green India Mission, GIM) is one of the eight missions under India's National Action Plan on Climate Change (2008). Approved for implementation in 2014, it aims to protect, restore and enhance India's forest cover and respond to climate change through afforestation and ecosystem restoration, with community participation.A carbon credit is a tradable certificate representing the reduction or removal of one tonne of carbon dioxide or its equivalent; carbon markets are systems in which such credits or emission allowances are bought and sold to cut emissions at the lowest cost.A legally binding international climate treaty adopted at COP21 in Paris in December 2015, under which all countries set their own nationally determined contributions to limit global warming to well below 2°C, and pursue efforts towards 1.5°C.Jal Shakti Abhiyan is a nationwide water conservation campaign, first launched in July 2019 in water-stressed districts and repeated since 2021 as "Jal Shakti Abhiyan: Catch the Rain", which mobilises governments and communities to harvest rainwater, renovate water bodies, recharge groundwater and plant trees, mainly before and during the monsoon.Salt-tolerant trees and shrubs of tropical coastal intertidal zones. Full coverage: Forests, Wetlands, Mangroves and Coral Reefs.

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