NEW DELHI, INDIA, March 28, 2017 – The World Bank’s Partnership for Market Readiness (PMR) has announced an $8 million grant for India to prepare for and pilot the use of carbon pricing instruments to help reduce to greenhouse gas (GHG) emissions.
Part of the funding will help India to broaden and deepen the scope of its existing market-based approaches to increase energy efficiency and renewable energy, including through the Perform Achieve and Trade (PAT) Mechanism and the Renewable Energy Certificate (REC) scheme.
Through PAT, mandatory energy consumption targets are placed on companies in energy-intensive industries. Those with the greatest inefficiencies have the highest reduction targets. Companies that outperform their targets are awarded certificates that can be traded to weaker performers or banked for future use. The REC scheme awards renewable power producers with credits, which can be sold to entities that have a renewable purchase obligation.
Funding will also go to develop and pilot a new market-based instrument that could improve either solid waste management or energy efficiency in medium and small industries.
Part of the funding will be used to create systems to strengthen India’s existing registry systems for the PAT and REC schemes and to facilitate tracking greenhouse gas (GHG) emission reductions. The upgraded system will promote transparency, environmental integrity and will reduce the risk of double counting as well as help prepare India to engage in the international transfer of mitigation outcomes.
The grant was announced on March 22 during the PMR’s 16th assembly meeting in New Delhi.
India’s participation in the PMR is an integral part of the country’s plan to meet its ambitious Nationally Determined Contribution (NDC) – its climate change commitment made to the United Nations Framework Convention on Climate Change (UNFCCC). By 2030, it aims to reduce its emissions intensity per unit of gross domestic product (GDP) by 33 percent to 35 percent from 2005 levels. With international support, India has also pledged to install 40 percent of its power generation from non-fossil fuel based sources by 2030. Activities supported by the PMR will contribute to both components of India’s NDC.
The PMR Assembly also endorsed proposals from Chile (US$2M), China (US$2M), and Thailand (US$0.5M) to pursue and deepen their on-going PMR activities related to carbon pricing readiness and implementation.
The PMR provides technical expertise and grant financing to 20 emerging economies and developing countries that are exploring and implementing carbon pricing instruments, such as emissions trading systems, carbon taxes, or scaled-up crediting.
As a global platform, the PMR brings together developed and developing nations to share best practices and support one another to broaden the use of carbon pricing in order to boost climate change mitigation.
The PMR counts more than 30 countries – representing about 80 percent of global GHG emissions – among its participants.
For more information on the PMR, see: www.thepmr.org