Carbon markets are transitioning from voluntary, fragmented instruments into policy-anchored mechanisms that directly support national climate commitments and industrial decarbonisation. Under the Paris Agreement, Article 6 provides structured pathways for international cooperation through bilateral credit transfers (Article 6.2) and a centralised UN-supervised mechanism (Article 6.4), enabling countries and private actors to mobilise finance while safeguarding environmental integrity.

In parallel, India has already established its domestic carbon market framework through the Carbon Credit Trading Scheme (CCTS), notified under national legislation. CCTS represents a significant step in pricing greenhouse gas emissions, incentivising over-compliance, and creating a regulated carbon credit ecosystem aligned with India’s enhanced Nationally Determined Contributions (NDCs).

This focus session at India Energy Week will examine how international and domestic carbon market architectures coexist, interact, and evolve, and what this means for Indian industry, policymakers, and investors.

Key Themes:
1. Article 6 of the Paris Agreement: Structuring International Carbon Cooperation
Article 6 of the Paris Agreement, overseen by the UNFCCC, enables countries to cooperate in achieving their NDCs through market-based mechanisms.

Article 6.2 – Cooperative Approaches & ITMOs
• Enables bilateral and multilateral agreements for transferring Internationally Transferred Mitigation Outcomes (ITMOs)
• Requires corresponding adjustments to prevent double counting
• Provides flexibility for countries to access lower-cost mitigation opportunities across borders
• Creates scope for private sector participation under government oversight
Article 6.4 – UN-Supervised Sustainable Development Mechanism
• Establishes a centralised global carbon crediting mechanism
• Builds on lessons from the Clean Development Mechanism (CDM)
• Emphasises additionality, robust MRV, and sustainable development outcomes
•  Allows private entities to generate internationally recognised credits

2. India Carbon Credit Trading Scheme (CCTS): India’s Domestic Carbon Market
India has already notified and operationalised the Carbon Credit Trading Scheme (CCTS) as the foundation of the Indian Carbon Market. Is it designed to price GHG emissions through tradable Carbon Credit Certificates.
Compliance Mechanism
• Obligated entities are required to meet prescribed GHG emission intensity reduction targets
•  Entities achieving reductions beyond targets are eligible to receive Carbon Credit Certificates
Offset Mechanism
• Non-obligated entities may register eligible projects delivering GHG emission reduction, removal, or avoidance to earn Carbon Credit Certificates
• CCTS is intended to support India’s climate commitments under the Paris Agreement while enabling domestic market discovery, liquidity, and investment signalling