- India and Japan are finalizing a Joint Crediting Mechanism (JCM) under Article 6.2 of the Paris Agreement.
- Expected to be formalized soon, the JCM aims to enhance decarbonization efforts and lower clean energy costs in India.
- Japanese companies will invest in advanced carbon-reduction technologies in India in exchange for carbon credits.
- Japan can use these credits to offset emissions or trade them within its national carbon market.
- Sectors like solar thermal energy, green hydrogen, and sustainable aviation fuel will benefit from JCM investments.
- India plans to direct these funds to underdeveloped clean energy sectors, leveraging Japanese expertise.
- Japan has similar agreements with 11 other countries, showcasing its commitment to global climate action.
- Negotiations between India and Japan have been ongoing since 2014, reflecting the complexity of such agreements.
- Challenges include preventing double-counting of emissions reductions and building India’s independent technological capacity.
