In the previous video, we explored the two June 2023 notifications from the government of India, which aimed to establish a market for carbon credits and green credits.

In this video, M Ramesh focuses on the potential pitfalls that may arise as India develops its carbon credit market and green credit market.
One significant challenge lies in creating demand.

The second challenge relates to baseline setting. Apart from these two primary challenges, there are several other issues that need resolution. For example, should there be a secondary market for carbon and green credits, thereby allowing speculators to participate? Can individuals buy carbon credits, similar to purchasing shares, and later sell them for a profit? Allowing speculators would deepen the carbon market, but it could also mean that credit generators do not benefit from high carbon prices.
The enthusiasm to generate more credits would only arise if credit generators obtained favorable prices for carbon.

Additionally, the question of whether derivatives should be allowed, including futures and options with carbon credits as underlying assets, remains unanswered.

There are numerous obstacles to overcome before India can establish a vibrant carbon market. However, it is crucial to view these challenges as problems that can be resolved over time.

Story: M Ramesh, Producer: Siddharth MC, Thumbnail design: V Nivedita.

Chapters
00:00-01:20 -Introduction.
01:20-06:20- Challenge 1: Creation of demand.
06:20-10:20-Challenge 2: Fixing of baselines.
10:20-11:18-Conclusion.



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