Question 1

India's new carbon market rules place a hard limit on the total volume of greenhouse gases a factory can emit.

Accepted Answer

The rules cap the 'emission intensity' (emissions per unit of product produced) rather than the absolute total emissions.

Question 2

The Carbon Credit Trading Scheme operates exclusively under the Environment (Protection) Act, 1986.

Accepted Answer

The foundational CCTS was notified under the Energy Conservation Act, 2001, while these specific target rules and penalty mechanisms draw their legal backing from the Environment (Protection) Act, 1986.

Question 3

Consider the following statements regarding the Draft Greenhouse Gases Emission Intensity Target Rules, 2025:
1. They mandate an absolute reduction in total greenhouse gas emissions for obligated entities by the compliance year 2026-27.
2. The rules introduce an Environmental Compensation penalty set at twice the average market price of a carbon credit for non-compliance.
3. The Central Pollution Control Board (CPCB) is responsible for the issuance of Carbon Credit Certificates (CCCs).

How many of the above statements are correct?

Accepted Answer

(a) Only one — Statement 1 is incorrect because the targets are based on 'emission intensity' (emissions per unit of output), not an absolute cap on total emissions. Statement 2 is correct; the penalty is 2x the average carbon credit price. Statement 3 is incorrect; the Bureau of Energy Efficiency (BEE) issues the CCCs, while the CPCB enforces the Environmental Compensation penalties. Therefore, only one statement (Statement 2) is correct.

Question 4

Match the following entities/concepts with their roles under India's Carbon Credit Trading Scheme (CCTS) framework:

List I (Entity/Concept)
A. Bureau of Energy Efficiency (BEE)
B. Central Pollution Control Board (CPCB)
C. Perform, Achieve and Trade (PAT)
D. Greenhouse Gas Emission Intensity (GEI)

List II (Role/Definition)
1. Measured as tonnes of CO2 equivalent per unit of output
2. Enforces Environmental Compensation for target shortfalls
3. Predecessor mechanism focused purely on energy efficiency
4. Sets baselines and issues Carbon Credit Certificates

Select the correct code:

Accepted Answer

(a) A-4, B-2, C-3, D-1 — The Bureau of Energy Efficiency (BEE) handles baselines and issues Carbon Credit Certificates (A-4). The CPCB is tasked with enforcing financial penalties for non-compliance (B-2). The PAT scheme was the predecessor that dealt with energy efficiency, not carbon specifically (C-3). GEI is the new metric, measured in tCO2e per unit of product (D-1).

Question 5

Assertion (A): The Greenhouse Gases Emission Intensity Target Rules, 2025 do not impose a strict ceiling on the total volume of industrial production in India.
Reason (R): The compliance mechanism relies on targets measured in tonnes of CO2 equivalent per unit of output, allowing industries to expand production as long as they become cleaner per unit.

Select the correct answer:

Accepted Answer

(a) Both A and R are true and R is the correct explanation of A — Both statements are correct. Because the rules target 'emission intensity' (emissions per unit of output) rather than an absolute cap (total emissions), factories can increase their total production volume as long as they reduce the proportional emissions per unit. Thus, R perfectly explains why A is true.

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