Legal constraints and opportunities in launching emissions trading in India

In wake of the repeated failures of the multilateral process to deal with climate change in terms of restricting global average temperature to 2 degrees Celsius as compared to the pre-industrial levels, emission trading is emerging as one of the preferred policy tools. Its implementation in the context of a developing country like India, which considers climate change as the creation of the industrialised countries, is fraught with a number of serious constraints. But the emergence of huge carbon markets in the past five years in India is an encouraging sign on the way to emissions trading. This paper tries to identify the legal constraints and opportunities that are likely to engage seriously the designers of emissions trading in India.