Energy Transition And Climate Change In Action: Advancing India’s Low-Carbon Development Pathway

Session Report
Dolly Kaushik

Introduction

Climate change has emerged as one of the defining challenges of the twenty-first century, demanding an unprecedented transformation of global energy systems and development pathways. As countries strive to fulfil their commitments under the Paris Agreement while ensuring sustainable economic growth, the transition towards cleaner energy has become central to climate action. For developing economies such as India, this transition is particularly significant, as it must simultaneously address energy security, economic development, environmental sustainability, and social equity.

Against this backdrop, Day 3 of the IMPRI Monsoon School Programme, Understanding the Nuances of Climate Change in the Indian Subcontinent: Cohort 3.0, organised by the IMPRI Centre for Environment, Climate Change, and Sustainable Development (CECCSD), explored India’s evolving climate policy architecture, the country’s energy transition roadmap, the role of carbon markets, and the institutional mechanisms required to achieve long-term decarbonisation. The discussion highlighted that climate action extends beyond renewable energy deployment and encompasses governance reforms, financial mechanisms, technological innovation, and robust monitoring frameworks capable of supporting a just and effective transition.

The session was hosted by Vinita Sharma, Research Intern at IMPRI, and delivered by Mr. Srinivas Krishnaswamy, Founder, Trustee, and Chief Executive Officer of the Vasudha Foundation, whose work has significantly contributed to climate policy research, energy transition strategies, and sustainable development in India. Drawing upon extensive experience in climate governance and international environmental negotiations, he presented a comprehensive overview of India’s progress, challenges, and opportunities in achieving a low-carbon future.

Understanding Energy Transition in the Context of Climate Action

Mr. Krishnaswamy began by placing climate change within the broader framework of sustainable development. He emphasised that climate mitigation cannot be viewed merely as reducing greenhouse gas emissions but must be understood as a systemic transformation involving production systems, consumption patterns, infrastructure development, industrial processes, and governance institutions.

Energy lies at the centre of this transformation because the energy sector remains one of the largest contributors to greenhouse gas emissions globally. India’s rapid economic growth, urbanisation, and industrial expansion continue to increase energy demand, making it imperative to transition towards cleaner and more efficient energy sources while maintaining energy access and affordability.

The discussion highlighted that India’s energy transition differs fundamentally from that of developed economies. While developed countries are primarily replacing existing fossil-fuel-intensive systems, India continues to build new infrastructure to meet growing developmental needs. Consequently, climate policy in India must simultaneously promote economic development and environmental sustainability, ensuring that climate action complements rather than constrains developmental aspirations.

India’s Climate Commitments and the Road Towards Net Zero

The session examined India’s international climate commitments under the Paris Agreement and explained how these commitments guide national climate policy. India has adopted progressively ambitious Nationally Determined Contributions (NDCs), committing to reduce the emissions intensity of its GDP while significantly increasing the share of non-fossil fuel energy capacity.

Mr. Krishnaswamy explained that India’s climate strategy is built around multiple complementary objectives:

Expanding renewable energy capacity;
Improving energy efficiency across sectors;
Promoting sustainable transport and green mobility;
Enhancing forest and carbon sinks;
Developing institutional mechanisms to monitor and regulate emissions; and
Supporting technological innovation for low-carbon growth.

Rather than viewing these objectives in isolation, he argued that they collectively form the foundation of India’s long-term decarbonisation strategy, ultimately contributing towards the country’s commitment to achieving Net Zero emissions by 2070.

At the same time, he cautioned that announcing ambitious targets represents only the first step. The real challenge lies in translating national commitments into measurable action through appropriate policy instruments, institutional coordination, and financial investments.

Carbon Markets as an Emerging Instrument of Climate Governance

A major focus of the session was India’s evolving carbon market framework. Mr. Krishnaswamy explained that carbon markets are increasingly recognised as an important economic instrument for reducing greenhouse gas emissions by creating financial incentives for cleaner production and technological innovation.

Unlike traditional command-and-control regulations, carbon markets utilise market-based mechanisms that encourage industries to reduce emissions where reductions can be achieved most efficiently. Entities capable of reducing emissions below prescribed limits may generate tradable carbon credits, while organisations unable to meet reduction targets may purchase these credits to comply with regulatory obligations.

The discussion highlighted that India has been steadily developing its domestic carbon market architecture through the Carbon Credit Trading Scheme (CCTS), which aims to establish a transparent regulatory framework capable of supporting emission reductions while maintaining industrial competitiveness.

Mr. Krishnaswamy emphasised that carbon markets should not be perceived merely as trading platforms but as comprehensive governance systems requiring strong institutional oversight, scientific methodologies, transparent reporting, and credible verification mechanisms to ensure environmental integrity.

Carbon Credit Trading Scheme: Building a Market-Based Climate Governance Framework

One of the central themes of the session was India’s transition towards a structured carbon market through the Carbon Credit Trading Scheme (CCTS). Mr. Krishnaswamy explained that carbon markets have evolved globally as instruments capable of combining environmental responsibility with economic efficiency. Rather than relying solely on regulatory mandates, carbon markets encourage industries to reduce emissions by assigning economic value to verified reductions in greenhouse gases.

India’s Carbon Credit Trading Scheme seeks to institutionalise this approach by creating a domestic framework for carbon credit generation, trading, monitoring and compliance. The scheme aims to incentivise industries to adopt cleaner technologies while enabling emission reductions to be achieved at comparatively lower economic costs.

However, the speaker cautioned that carbon markets should never be viewed merely as financial trading platforms. Their effectiveness depends fundamentally upon scientific credibility, transparent governance and robust institutional mechanisms capable of ensuring that every carbon credit genuinely represents measurable environmental benefits.

The discussion highlighted that carbon markets cannot substitute direct climate action. Instead, they function as complementary policy instruments designed to accelerate emission reductions alongside renewable energy deployment, energy efficiency improvements and sectoral decarbonisation strategies.

The Importance of Monitoring, Reporting and Verification (MRV)

A recurring emphasis throughout the session was the importance of establishing a credible Monitoring, Reporting and Verification (MRV) system. According to Mr. Krishnaswamy, MRV forms the backbone of any successful carbon market because it ensures transparency, accountability and environmental integrity.

Monitoring involves systematically measuring greenhouse gas emissions and emission reductions achieved through various projects and industrial processes. Reporting requires organisations to disclose these measurements according to standardised methodologies, while verification involves independent assessment to confirm that the reported reductions accurately reflect actual environmental outcomes.

Without an effective MRV framework, carbon markets risk losing credibility as inaccurate reporting or exaggerated claims can undermine confidence among regulators, investors and participating industries. Therefore, institutional capacity building, scientific methodologies and independent verification agencies become indispensable components of India’s emerging carbon market architecture.

The speaker emphasised that transparent data systems are equally essential for strengthening public trust in climate governance and enabling policymakers to evaluate whether climate interventions are producing measurable outcomes.

Strengthening Carbon Market Credibility through Additionality

An important concept discussed during the session was additionality, which determines whether a climate project produces emission reductions that would not have occurred under normal business conditions.

Mr. Krishnaswamy explained that projects should receive carbon credits only when they generate genuinely additional environmental benefits beyond existing legal obligations or commercially viable investments. If industries receive credits for activities they would have undertaken regardless of carbon market incentives, the environmental value of the entire system becomes questionable.

Consequently, determining additionality requires rigorous baseline assessments, scientific evaluation and transparent methodologies capable of distinguishing genuine climate interventions from routine industrial improvements.

This principle safeguards the environmental integrity of carbon markets while ensuring that financial incentives support meaningful emission reductions rather than rewarding pre-existing practices.

Preventing Greenwashing through Strong Climate Governance

The session also addressed growing concerns regarding greenwashing, wherein organisations portray themselves as environmentally responsible without undertaking substantial climate action.

Mr. Krishnaswamy observed that increasing public interest in sustainability has encouraged many organisations to make ambitious environmental claims. However, without scientific evidence, transparent reporting and independent verification, such claims may create misleading impressions regarding actual climate performance.

Carbon markets therefore require strong governance structures capable of distinguishing credible emission reductions from superficial sustainability narratives. Transparent disclosure mechanisms, independent audits and standardised reporting frameworks become essential for preserving both market credibility and public confidence.

The speaker stressed that climate action should be measured through demonstrable outcomes rather than aspirational declarations. Policies must therefore prioritise accountability alongside ambition.

Energy Transition Beyond Renewable Energy

The discussion highlighted that energy transition extends far beyond expanding solar and wind energy capacity. While renewable energy remains a critical pillar of India’s climate strategy, achieving long-term decarbonisation requires systemic transformation across multiple sectors of the economy.

Mr. Krishnaswamy argued that industrial production, transportation, urban infrastructure, buildings, agriculture and consumption patterns must all gradually transition towards lower carbon pathways. Such transformation demands coordinated policy interventions involving technological innovation, regulatory reforms, financial incentives and institutional collaboration.

He emphasised that India’s developmental context makes this transition particularly complex. Unlike developed economies replacing mature infrastructure, India continues to build significant portions of its future economy. Consequently, climate-conscious planning today can prevent the long-term lock-in of carbon-intensive infrastructure while supporting inclusive economic development.

The speaker therefore advocated integrating climate considerations into mainstream development planning rather than treating climate policy as an independent sectoral issue.

Challenges in Implementing India’s Energy Transition

While India has demonstrated considerable ambition through its climate commitments, Mr. Krishnaswamy observed that translating policy into meaningful implementation remains a significant challenge. Climate governance today requires far more than announcing long-term targets—it necessitates strong institutional capacity, transparent regulatory mechanisms, coordinated policymaking, and sustained financial investments.

A key challenge lies in balancing economic growth with decarbonisation. As one of the world’s fastest-growing economies, India’s energy demand is expected to continue rising over the coming decades. Meeting this demand through cleaner energy systems requires large-scale investments in renewable energy, electricity transmission networks, energy storage technologies, green hydrogen, and climate-resilient infrastructure.

Furthermore, climate policy cannot function in isolation. Effective implementation demands coordination among multiple ministries, state governments, regulators, industries, financial institutions, and civil society organisations. The absence of integrated planning may lead to fragmented implementation despite well-designed policy frameworks.

The speaker also highlighted the importance of building technical capacity across institutions responsible for climate governance. As climate policies become increasingly data-driven, regulatory agencies must develop expertise in emissions accounting, carbon market regulation, verification methodologies, and climate finance.

Financing Climate Action: An Essential Component of Energy Transition

An equally significant aspect of the discussion centred on climate finance. Mr. Krishnaswamy explained that energy transition requires investments on an unprecedented scale, extending beyond renewable energy generation to include transmission infrastructure, industrial decarbonisation, clean mobility, technological innovation, and adaptation measures.

Carbon markets can contribute by creating additional financial incentives for emission reduction projects. However, they represent only one component of a broader climate finance ecosystem. Public investment, private capital, international climate finance, blended finance mechanisms, and green bonds all have important roles in supporting India’s low-carbon transition.

The session emphasised that financial resources must be accompanied by appropriate policy certainty. Stable regulatory frameworks encourage long-term investment decisions and enable industries to adopt cleaner technologies with greater confidence.

Towards a Just and Inclusive Energy Transition

Throughout the session, Mr. Krishnaswamy underscored that energy transition should not merely be understood as a technological transformation but as a socio-economic transition requiring careful consideration of equity and inclusion.

Communities dependent upon conventional energy sectors, workers employed in carbon-intensive industries, and economically vulnerable populations must remain central to policy design. Climate action should therefore promote both environmental sustainability and social justice by ensuring that the benefits of the transition are widely shared while minimising adverse impacts on livelihoods.

Similarly, strengthening institutional participation at local, state, and national levels would enable more responsive climate governance. Capacity-building initiatives, public awareness, stakeholder engagement, and transparent decision-making processes are essential for building broad societal support for climate policies.

The speaker reiterated that climate governance ultimately succeeds when environmental objectives, economic development, and social welfare are pursued simultaneously rather than in competition with one another.

Conclusion

The session “Energy Transition and Climate Change in Action” provided a comprehensive understanding of India’s evolving climate governance architecture and the central role of energy transition in achieving sustainable development. Mr. Srinivas Krishnaswamy demonstrated that addressing climate change requires a combination of scientific understanding, sound policymaking, institutional strengthening, and market-based mechanisms capable of accelerating emission reductions while supporting economic growth.

The discussion highlighted that instruments such as the Carbon Credit Trading Scheme (CCTS) represent important milestones in India’s climate policy landscape. Nevertheless, their long-term success depends upon transparent governance, robust Monitoring, Reporting and Verification (MRV) systems, credible methodologies for determining additionality, and effective safeguards against greenwashing.

At the same time, the session reinforced that India’s climate journey extends beyond renewable energy deployment. Building climate resilience, strengthening institutions, mobilising finance, encouraging technological innovation, and ensuring a just transition for vulnerable communities remain equally important components of sustainable climate action.

As India advances towards its long-term climate commitments, the country faces the dual challenge of sustaining economic development while progressively reducing its carbon footprint. Achieving this balance will require collaborative efforts across governments, industries, financial institutions, research organisations, and civil society. The session ultimately underscored that climate action is no longer solely an environmental imperative, it has become a developmental necessity, demanding integrated policies capable of securing both ecological sustainability and inclusive economic prosperity.