Asia Society Report Says India Can Raise $500 billion Through Carbon Market

India-West News Desk

NEW YORK, NY – India could generate more than $500 billion by 2050 through its Carbon Credit Trading Scheme and use the proceeds to finance its clean energy transition, according to a new report by the Asia Society Policy Institute.

The report, ‘Carbon Credit Trading Scheme & Energy Transition Finance: Preparing India for Optimal Use of Compliance CCTS Revenue,’ argues that revenue from auctioning carbon emission allowances should be reinvested to help industries reduce emissions while supporting workers and communities affected by the shift away from fossil fuels.

Authors Nishtha Singh and Alistair Ritchie said the Carbon Credit Trading Scheme offers India an opportunity to build a domestic financing mechanism for its climate goals without relying heavily on external funding.

“India’s transition toward a low carbon economy requires a financing architecture capable of supporting deep industrial decarbonization, strengthening economic resilience in fossil fuel dependent regions, and ensuring a just and equitable clean energy transition,” the authors wrote.

They said the scheme represents a “significant opportunity to mobilize domestic revenue at scale while advancing India’s climate commitments and safeguarding industrial competitiveness.”

According to the report, auctioning emissions allowances in the power sector alone could generate more than $500 billion by 2050. The authors pointed to Europe’s emissions trading system as an example, noting that it had raised nearly $300 billion through 2025 and directed much of the revenue toward clean energy investments and industrial efficiency.

To ensure the money is used effectively, Singh and Ritchie recommend that the Ministry of Finance establish a dedicated authority to oversee the collection and distribution of Carbon Credit Trading Scheme revenues.

The report proposes creating two funding mechanisms. One would provide financial support to industries, including small and medium enterprises, to adopt cleaner technologies and improve energy efficiency. The second would focus on a just transition by funding worker retraining, local infrastructure projects, and economic redevelopment in regions dependent on coal mining and thermal power generation.

The authors also recommend forming an independent advisory body to assess projects, monitor spending, and adjust investment priorities as the country’s energy transition progresses.

While the government’s current roadmap suggests Carbon Credit Trading Scheme revenues could begin reaching projects by 2031, the report says India could accelerate implementation and start deploying funds as early as 2029 by drawing on lessons from established carbon markets.