To price or not to price? making a case for a carbon pricing mechanism for India
The 2021 Conference of Parties 26 (COP26) propelled nations to ramp up their climate targets and the concomitant Nationally Determined Contributions (NDCs) to reduce global greenhouse gas emissions. However, the updated NDCs and the announced pledges for 2030 remain insufficient and poorly aligned with the targets of the Paris Agreement. The reduction in projected 2030 emissions is estimated to be 7.5 percent—far lower than the 30 percent required to limit warming to 2°C, and the 55 percent which is ideal to remain within the 1.5°C target. Many analysts had posited that the COVID-19 pandemic was a unique opportunity to conflate the recovery process with the green agenda and accelerate the decarbonisation process. Yet, the resulting emission reduction in 2020 was transient in its effects, and the urgency and scale of the impending climate crises demands increased ambition and cooperation to drive the green transition imperative. This paper explores the role of carbon pricing as an effective instrument in the domestic and international climate policy architecture.