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Polity & Governance
Mahesh

20/12/22 12:40 PM IST

Energy Conservation (Amendment) Bill

In News
  • Parliament recently passed the Energy Conservation (Amendment) Bill, 2022, giving sweeping powers to the central government to create a carbon credit trading mechanism.
About the bill
  • Amendments brought into the 2001 Act aim to create an EU-style carbon market in India to meet the country’s Nationally Determined Contributions (NDCs) agreed upon during the 2015 Paris Agreement.
  • The Energy Conservation Act, 2001 provided a framework for regulating energy consumption and promoting energy efficiency and energy conservation.
Provisions of the bill
  • The Act set up the Bureau of Energy Efficiency (BEE) which recommends regulations and standards for energy consumption in appliances, vehicles, and commercial establishments.
  • These regulations do help in reducing greenhouse gas emissions by lowering the energy generation requirements.
  • The central government will specify a carbon credit trading scheme.
  • Through this scheme, the government or any authorised agency will issue a carbon credit certificate to entities for reducing a specified amount of carbon dioxide or other greenhouse emissions.
  • This can be done either by using renewable energy sources or by offsetting their emissions. 
Carbon Credits
  • Carbon Credits are essentially a kind of permit that can be traded and are equivalent to one tonne of carbon dioxide removed, reduced, or sequestered from the atmosphere, as per United Nations standards.
  • Carbon credits can be bought either from an entity engaged in projects that reduce, remove, capture, or avoid emissions or from companies that have overachieved their emission targets. 
Issues involved in the bill
  • Bill does not provide clarity on the mechanism to be used for the trading of carbon credit certificates— whether it will be like the cap-and-trade schemes or use another method— and who will regulate such trading.
  • It is not specified, which is the right ministry to bring in a scheme of this nature.
  • While carbon market schemes in other jurisdictions like the U.S., United Kingdom, and Switzerland are framed by their environment ministries, the Indian Bill was tabled by the power ministry instead of the Ministry of Environment, Forest, and Climate Change (MoEFCC).
  • The Bill does not specify whether certificates under already existing schemes would also be interchangeable with carbon credit certificates and tradeable for reducing carbon emissions.
Source- The Hindu

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