Delhi Cabinet clears carbon credit policy to cut emissions, raise rev

New Delhi: The Delhi Cabinet on Tuesday approved a Carbon Credit Monetisation Framework, a policy aimed at reducing pollution while generating additional revenue by selling emission reductions from the government’s green initiatives in national and international carbon markets.

Announcing the decision, Chief Minister Rekha Gupta said the framework would help Delhi convert its environmental efforts into financial resources for public welfare. “The Delhi Government is fully committed to combating climate change. This initiative will not only promote environmental conservation but will also generate additional revenue that can be used for development works and public welfare,” she said. Gupta added that Delhi would “emerge as the country’s leading state in leveraging the carbon market”.

Under the framework, emission reductions achieved through projects such as electric buses, solar energy adoption, large-scale plantation drives and waste management initiatives will be scientifically measured and registered as carbon credits. These credits can then be traded in recognised carbon markets, with the proceeds deposited directly into the Consolidated Fund of the State. Environment Minister Manjinder Singh Sirsa described the policy as a “game-changer for Delhi’s environment”. “We are not just reducing emissions but also turning them into resources for a cleaner future,” he said, adding that the revenue generated would be reinvested in pollution mitigation, climate resilience and green infrastructure.

Officials said the Environment Department will act as the nodal agency for implementing the framework. A specialised agency will be selected through a transparent tender process to identify eligible projects, complete documentation and register credits under global standards. The model is based on revenue sharing, ensuring that the government does not incur any upfront expenditure.

The government said the policy draws inspiration from similar initiatives in states such as Madhya Pradesh, Meghalaya and Arunachal Pradesh, where carbon credit trading has already yielded financial returns. According to the Delhi government, the framework aligns with India’s broader climate commitments and net-zero ambitions. By institutionalising monitoring, reporting and verification mechanisms, the policy seeks to ensure transparency and credibility in credit generation.