India’s Paris Agreement Playbook: Market Mechanisms + Climate Finance, Tied Together

India–Japan sign MoC on Joint Crediting Mechanism (JCM) under Article 6.2 of the Paris Agreement to boost low-carbon technology, investment and carbon credit trading. India also establishes a National Designated Authority (NDA) for Article 6.4 carbon markets and leads the Global South push for Article 9.1 climate finance ahead of COP30 in Belém, Brazil.

India’s latest climate moves line up three pieces of the Paris Agreement architecture into one coherent strategy:

(i) a bilateral crediting pathway with Japan under Article 6.2,

(ii) a domestic authority to run projects under Article 6.4, and

(iii) a renewed diplomatic push to center Article 9.1 climate finance at COP30 (Belém, Brazil).

Read together, they show India pairing carbon markets and technology deployment with a parallel insistence on equitable finance—so mitigation scaling does not come at the expense of development priorities.

i) First, the India–Japan MoC on the Joint Crediting Mechanism (JCM) under Article 6.2. 

The Ministry of Environment, Forest and Climate Change (MoEFCC) has signed a Memorandum of Cooperation (MoC) with Japan to operationalize the JCM, a bilateral framework that supports investment flows, technology transfer, and capacity building for low-carbon technologies. (Low-carbon technologies = solutions that reduce greenhouse gas (GHG) emissions per unit of output.)

Under Article 6.2—which enables country-to-country cooperative approaches—projects approved by India’s National Designated Agency for Implementation of Article 6 can generate carbon credits that are internationally traded with Japan (and, on similar lines, with other partners).

This aligns with India’s Net-Zero by 2070 pathway but recognizes today’s cost and viability-gap hurdles: the JCM explicitly aims to lower these barriers while localising advanced equipment, systems, and infrastructure—so India builds a homegrown ecosystem rather than importing solutions indefinitely.

The MoC sits within the broader India–Japan agenda of “Green Energy Focus for a Better Future,” highlighted during the Prime Minister’s visit to Japan. Importantly, MoEFCC notes that credit trading will not dilute India’s NDC (Nationally Determined Contribution) commitments—NDC = each country’s self-set climate targets under the Paris Agreement.

ii) Second, India’s domestic readiness for Article 6.4: establishing a National Designated Authority (NDA/DNA). 

Alongside the bilateral 6.2 track, MoEFCC has formed a 21-member NDA (headed by the Environment Secretary) to run the Paris Agreement Crediting Mechanism (PACM) under Article 6.4—a UN-supervised mechanism designed to issue credits from projects that demonstrably reduce or remove emissions.

The NDA’s core functions include screening and recommending eligible activities, and authorising projects for emission-reduction trading. India’s initial eligible list spans renewable energy, green hydrogen, green ammonia (alternate material production), and removal activities such as Carbon Capture, Utilisation and Storage (CCUS).

This complements the 6.2 JCM by giving project developers two routes to market—bilateral (6.2) and multilateral (6.4).

For readers: a carbon market is a system where entities buy/sell carbon credits; one carbon credit = one tonne of CO₂ (or CO₂-equivalent) reduced, avoided, or removed. Companies can offset part of their emissions by purchasing such credits, while host countries keep guardrails so that claimed reductions remain real, additional, and verifiable.

iii) Third, the finance pillar: re-centring Article 9.1 at COP30. 

India—along with several developing countries—is pressing to foreground Article 9.1, which states that developed countries “shall provide financial resources” to assist developing countries with mitigation (cutting emissions) and adaptation (building resilience to climate impacts).

This is not voluntary; it continues binding obligations already embedded in the UNFCCC and is grounded in CBDR-RC—Common But Differentiated Responsibilities and Respective Capabilities, the principle that those with greater historical responsibility and capacity should lead on finance and technology support.

The push reflects the Global South’s demand for equity and climate justice: crediting mechanisms (Articles 6.2/6.4) can mobilize private capital and innovation, but they cannot replace public climate finance that developing countries need for adaptation, loss-and-damage responses, and just transitions.

Putting the pieces together. With Cabinet authorisation to finalise Rules of Implementation (RoI) for Article 6.2 and to sign similar agreements with other countries, India is building a dual-track market architecture (6.2 + 6.4) and a diplomatic front that seeks predictable Article 9.1 finance.

The design is deliberate: use markets to speed technology deployment and de-risk costs (via JCM-enabled investments, tech transfer, and training), while the NDA assures environmental integrity and project authorisation at home; in parallel, press for assured developed-country finance so that developing nations are not forced to rely solely on credit sales to fund climate action.

If executed well, this trio—JCM under Article 6.2, a robust NDA for Article 6.4, and a revived Article 9.1 agenda—can accelerate low-carbon deployment (renewables, green hydrogen, green ammonia, CCUS, and more), localise high-tech manufacturing, protect NDC integrity, and keep equity at the core of India’s climate pathway.

Comparison: Article 6.2 vs Article 6.4 vs Article 9.1

Provision	Focus Area	Mechanism / Nature	India’s Action	Relevance for Global South
Article 6.2	Voluntary cooperation through bilateral or multilateral arrangements	Allows country-to-country carbon credit trading (e.g., India–Japan Joint Crediting Mechanism – JCM)	Signed MoC with Japan; NDA to approve projects	Boosts investment, technology transfer, carbon markets
Article 6.4	UN-supervised carbon market (Paris Agreement Crediting Mechanism – PACM)	Credits issued from projects that reduce or remove emissions; overseen by UN body	India formed National Designated Authority (NDA) to authorise eligible projects (renewables, green hydrogen, CCUS)	Ensures environmental integrity + scalable market participation
Article 9.1	Climate Finance obligations of developed countries	Developed countries “shall provide financial resources” for mitigation & adaptation in developing countries	India pushing at COP30 (Belém, Brazil) to re-centre Article 9.1	Anchored in CBDR-RC principle; crucial for equity and climate justice

Frequently Asked Questions (FAQs)

Q1. What is the Joint Crediting Mechanism (JCM) between India and Japan?

The Joint Crediting Mechanism (JCM) is a bilateral framework under Article 6.2 of the Paris Agreement. It allows India and Japan to collaborate on low-carbon technology projects, share investments, enable technology transfer, and trade carbon credits generated from such projects.

Q2. What is the role of India’s National Designated Authority (NDA) under Article 6.4?

The National Designated Authority (NDA), formed by the Ministry of Environment, Forest and Climate Change (MoEFCC), will approve, monitor, and authorize projects under Article 6.4 carbon markets. Its functions include recommending eligible projects (e.g., renewables, green hydrogen, CCUS) and ensuring environmental integrity in carbon credit trading.

Q3. Why is Article 9.1 of the Paris Agreement important for India?

Article 9.1 mandates that developed countries shall provide climate finance to developing countries for mitigation and adaptation. India emphasizes this at COP30 (Belém, Brazil) to ensure that market mechanisms (like JCM and Article 6.4) are complemented by predictable finance and equity, in line with the principle of Common But Differentiated Responsibilities (CBDR-RC).

Q4. How do Article 6.2 and Article 6.4 differ under the Paris Agreement?

• Article 6.2 → Enables bilateral or multilateral cooperation between countries, like the India–Japan JCM.

• Article 6.4 → Creates a UN-supervised carbon market (Paris Agreement Crediting Mechanism) where emission reduction projects can generate credits, transferable across nations.

Q5. What are carbon credits and how do they help India’s climate strategy?

A carbon credit = 1 tonne of CO₂ (or equivalent) reduced, avoided, or removed. Companies or countries can buy these credits to offset emissions. For India, carbon markets bring investment, technology, and capacity-building, while supporting the Net Zero 2070 goal and sustainable development.