India has decided to join at least one of the four cooperative work programmes launched last week under the ‘clean energy pillar’ of the US-led Indo Pacific Economic Framework (IPEF) – the one on facilitating and promoting carbon market activities.
Officials said New Delhi is also considering two of the other co-operative work programme initiatives, one on clean electricity and the other on use of sustainable aviation fuel but will take a call on whether to join or not after thorough analysis.
“India will join the cooperative working group on carbon markets through the Ministry of Power and the Bureau of Energy Efficiency will be the nodal body,” an official tracking the matter said.
The IPEF, an initiative led by US President Joe Biden, was launched in May 2022, bringing together 14 regional partners – Australia, Brunei, Fiji, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, the US, and Vietnam.
Four pillars
Seen by many analysts as an attempt by the US to counter China’s growing influence in the region, the IPEF aims to have a common set of rules and standards around four pillars: connectivity and digital trade; resilient supply chains; clean energy; and corruption-free fair trade. Tariff cuts are not on the agenda at all, but India has still decided to exclude itself from the trade pillar, while joining the other three.
In India, the Ministry of Power, which is working on deepening the country’s carbon markets, brought in amendments to the carbon credits trading scheme (CCTS) recently which puts it on track towards establishing independent standards for carbon trading and also allows non-obligated entities to generate carbon credits.
“India, which is developing its own carbon markets, is keen on joining the IPEF work programme on carbon markets, led by US and supported by Korea. The Bureau of Energy Efficiency is the nodal authority working on it. The idea is to see how carbon markets are developing in each of the economies (of partner countries) and whether there is a rationale for trying to standardise and integrate these carbon markets at some point in time,” the official said.
Carbon taxes
With trading partners like the EU and the UK putting in place mechanisms to collect carbon taxes, India is focussed on developing its own carbon market fast and wants to learn from others’ experience.
On the co-operative work programme on clean electricity brought in by Japan and supported by many member countries, India is weighing its options. “The Ministry of Power is actively considering whether the clean electricity work programme serves the interest of our country,” the official said.
Similarly, on the cooperative work programme on sustainable aviation fuel, put forward by Singapore, India is in internal discussions on its line of action. “This work programme is largely to see how we can ensure increasing use of sustainable aviation fuel in our civil aviation sector. India is actively considering this programme. Our Ministries of Petroleum and Natural Gas and Civil Aviation are engaged in discussions on this. We haven’t decided yet on joining it,” the official said.
The fourth co-operative work programme on `just transition’ launched by Philippines, which is largely around work force development, is still under consideration by many countries, the official added.
The IPEF is one of the fastest moving negotiations with members having already wrapped up pillar 2 negotiations on supply chains and finalised the text for two other pillars on clean energy and fair trade.