The Indian government has favored the CDM to promote climate-friendly practices. CEO of British-based Carbon Rating Agency, Yuvraj Dinesh Babu, noted that all sectors of Indian’s domestic economy have engaged with the CDM market–making India attain the highest number of unilateral CDM projects and with many Indian industries having accumulated their allotted Carbon Emission Reduction (CER) credits (the main instrument facilitating CDM markets). Currently, India faces low CER credit prices but with prospects of a more aggressive push in the international market, CER prices may rise, causing more credit selling by Indian industries and further boost India’s CDM market.
There has been recognition of the economic advantage of CDM markets within India. For example, as the Indian state of Himachal Pradesh which seeks to be the India’s first carbon-free state, seeking opportunities to finance the goal through the CDM. However, effectiveness, accountability and transparency of the process are a concern in CDM’s credibility within India paralleling broader debates over the CDM in general. In the city of Kolkata, the promotion green buildings, failed to get recognition for carbon reductions that could be utilized in the CDM schemed due to difficulty in explicitly account for energy savings under current CDM methodology. CDM practices can be skewedby promoting ‘greenwash’ approaches by businesses and seen as a vehicle for environmental injustice. Himachal Pradesh’s ambitious goals, comes with the cost of imposing on local livelihoods and environments.
The extent to which the UNFCCC aims to streamline the CDM process will be an important feature in 2009 for industries in India actively engaged in CDM projects with “efficiency and quality” as key goals. While the booming CDM market within suggest that India would favor maintaining the CDM’s overall mission, there is definitely a need to support a restructuring of the Mechanism if the Indian government seeks to be inclusive in ensuring climate change policies are conducive to all- businesses and citizens.