The Institute for Energy Economics and Financial Analysis (IEEFA) has stressed that establishing credible carbon price signals in the initial years of India’s upcoming Carbon Credit Trading Scheme (CCTS) will be critical for building market confidence. According to the report, early compliance cycles will shape industry expectations around policy certainty and influence long-term investment decisions in low-carbon technologies.
IEEFA noted that benchmark design, target stringency and market stability mechanisms will play a key role in determining carbon prices. The report warns that weak or oversupplied markets could dilute decarbonisation incentives, while transparent and predictable policy measures can help create a durable carbon market that supports India’s industrial transition and climate goals.