Carbon Markets and Climate Justice in India: Legal Architecture, Compliance Challenges, and Equity Implications under the Carbon Credit Trading Scheme

Carbon markets have emerged as a central policy instrument in global climate governance, aiming to reduce greenhouse gas emissions through market-based incentives. India’s Carbon Credit Trading Scheme (CCTS), introduced under the Bharatiya Nyaya Sanhita framework of climate action and energy transition, represents a major step toward institutionalizing a domestic carbon market. This abstract critically examines the evolving legal architecture of the CCTS, assessing its interaction with existing environmental laws, regulatory bodies, and compliance mechanisms. The analysis highlights how India seeks to balance economic growth with emission reduction commitments, including the transition toward mandatory sectoral caps and measurement, reporting, and verification (MRV) standards. At the same time, carbon markets raise complex questions of climate justice. The paper explores the equity implications for vulnerable communities, especially those dependent on land-based livelihoods, who could face disproportionate compliance burdens or exclusion from carbon revenue opportunities. It also evaluates transparency, accountability, and safeguard provisions to ensure that market benefits do not bypass local stakeholders. By situating India’s carbon market within broader global and domestic climate justice debates, this study identifies gaps in institutional design and recommends inclusive reforms to strengthen environmental integrity and social equity. The research concludes that the success of India’s carbon markets will depend on embedding justice-oriented principles into the operational framework of the CCTS.