Joint Crediting Mechanism (JCM) : India & Japan

Why in the News? 

During Prime Minister Narendra Modi’s visit to Japan, India’s Environment Ministry announced the signing of a Memorandum of Cooperation (MoC) with Tokyo on a first-of-its-kind Joint Crediting Mechanism (JCM).

Key Points: Joint Crediting Mechanism (JCM)

Nature of the Agreement:

• The JCM is a Japanese initiative where Japan invests in low-carbon technologies in developing countries.
• The resulting emission reductions are credited to Japan’s account as carbon credits.

Benefits for India:

• Will encourage investment, technology transfer, capacity building, and localisation of low-carbon technologies.
• Facilitates the widespread adoption of eco-friendly technologies, equipment, systems, and infrastructure.
• Contributes to greenhouse gas reduction, sustainable development, and international carbon trading.

International Dimension:

• Allows India to exchange carbon credits with Japan and other partner nations in accordance with Article 6.2 of the Paris Agreement.
• Ensures trading will not adversely impact India’s NDC commitments.

India’s Climate Goals (NDCs):

• Reduce emission intensity by 45% by 2030 (from 2005 levels).
• The target is to generate half of the nation’s total power capacity through non-fossil fuel sources by 2030.
• Increase carbon storage by 2.5–3 billion tonnes of CO₂ equivalent through large-scale afforestation efforts by 2030.

Institutional Framework in India:

• Creation of the National Designated Authority as the nodal body to approve projects, evaluate emission reductions, and oversee India’s carbon market.
• The Cabinet gave approval to the Environment Ministry to frame the rules and enter into comparable agreements with other nations.

About Joint Crediting Mechanism (JCM):

• Launched by Japan to meet its emission reduction targets by partnering with developing nations.
• Functions by:

• Implementing low-carbon projects abroad.
• Crediting part of the achieved emission reductions to Japan.

• Dual Benefits:

• Partner countries get investment, advanced technologies, and infrastructure.
• Japan gets carbon credits to fulfil its climate pledges.

• Already implemented in several Asian nations (e.g., Vietnam, Indonesia, Mongolia, Bangladesh).