A cap-and-trade system in India?

Has India just established a domestic cap-and-trade system? Maybe.

Well, here’s something potentially significant:

India has approved in principle new trading plans centred on energy efficiency as part of efforts to shift to a greener economy to fight climate change, opening up a potential market worth more than $15 billion by 2015.

…

The plan involves creating a market-based mechanism that would allow businesses using more energy than stipulated to compensate by buying energy certificates from those using less energy due to energy efficiency practices.

The government is setting up energy benchmarks for each industry sector. Companies that do not meet the benchmarks would have to buy these certificates under a reward and penalty system.

A government statement said the efficiency mission would ensure an annual saving of 5 percent of India’s total energy consumption and a cut of about 100 million tonnes of carbon dioxide every year from its annual emissions of about 3 billion tonnes now.

This is far too sketchy to really know what it is about more: I’ll do some poking around. For example, we do not know what the energy benchmarks will be. The “5%” reduction figure must be a reduction from whatever benchmark the government would have projected in the absence of the program: any Indian government proposing a 5% reduction in consumption itself would be quickly thrown out of office. (Come to think of it, that’s true for just about any country.).

But this seems to show that the Prime Minister’s Office is committed to doing something. As with anything in India, it’s not just a matter of how it will show up in legislation, but whether anyone will pay attention to it once it becomes law. But it is quite a development.

Author: Jonathan Zasloff

Jonathan Zasloff teaches Torts, Land Use, Environmental Law, Comparative Urban Planning Law, Legal History, and Public Policy Clinic - Land Use, the Environment and Local Government. He grew up and still lives in the San Fernando Valley, about which he remains immensely proud (to the mystification of his friends and colleagues). After graduating from Yale Law School, and while clerking for a federal appeals court judge in Boston, he decided to return to Los Angeles shortly after the January 1994 Northridge earthquake, reasoning that he would gladly risk tremors in order to avoid the average New England wind chill temperature of negative 55 degrees. Professor Zasloff has a keen interest in world politics; he holds a PhD in the history of American foreign policy from Harvard and an M.Phil. in International Relations from Cambridge University. Much of his recent work concerns the influence of lawyers and legalism in US external relations, and has published articles on these subjects in the New York University Law Review and the Yale Law Journal. More generally, his recent interests focus on the response of public institutions to social problems, and the role of ideology in framing policy responses. Professor Zasloff has long been active in state and local politics and policy. He recently co-authored an article discussing the relationship of Proposition 13 (California's landmark tax limitation initiative) and school finance reform, and served for several years as a senior policy advisor to the Speaker of California Assembly. His practice background reflects these interests: for two years, he represented welfare recipients attempting to obtain child care benefits and microbusinesses in low income areas. He then practiced for two more years at one of Los Angeles' leading public interest environmental and land use firms, challenging poorly planned development and working to expand the network of the city's urban park system. He currently serves as a member of the boards of the Santa Monica Mountains Conservancy (a state agency charged with purchasing and protecting open space), the Los Angeles Center for Law and Justice (the leading legal service firm for low-income clients in east Los Angeles), and Friends of Israel's Environment. Professor Zasloff's other major activity consists in explaining the Triangle Offense to his very patient wife, Kathy.