Delhi Cabinet clears carbon credit plan to monetise green initiatives

The Delhi government on Tuesday approved the implementation of a Carbon Credit Monetisation Framework in the national capital, a move aimed at generating revenue from existing green and pollution-control initiatives.

The decision was taken at a Cabinet meeting, with Delhi joining Meghalaya, Arunachal Pradesh and Indore city in adopting a carbon credit monetisation model.

In a statement, the Department of Environment, Forests and Wildlife said that ongoing initiatives such as the electric vehicle rollout, urban forestry, Yamuna restoration, solar energy adoption and waste-to-energy plants would generate tradable carbon credits. These credits would create a new source of funding for environmental protection without imposing any financial burden on the government.

The department said work was underway to convert Delhi’s existing green projects into revenue-generating assets for pollution control and sustainability, subject to Cabinet approval.

It said that for every one metric tonne of carbon dioxide reduced through Delhi’s climate initiatives, one carbon credit would be generated. These credits could be sold in carbon markets in India and abroad.

According to the statement, the framework follows a no-financial-liability model and will support ongoing green efforts across departments including transport, power, forests, the Delhi Jal Board and urban development.

Chief Minister Rekha Gupta said the implementation of the Carbon Credit Monetisation Framework would provide the government with an additional source of revenue and help accelerate development works.

Gupta said the initiative would promote environmental conservation and that the revenue generated would be deposited into the Consolidated Fund of the State and utilised for public welfare schemes.

She said the framework would enhance the efficiency of various departments and provide citizens with the benefits of a cleaner and healthier environment.

The chief minister said that through this initiative, the Delhi government is not only leading India’s commitments against climate change but is also opening new financial pathways for sustainable development, adding that Delhi would emerge as the country’s leading state in harnessing the benefits of the carbon market.

Officials said the scheme would cover initiatives being implemented by multiple departments, with the environment department acting as the nodal agency for the entire process.

At present, the Delhi government is operating electric buses, undertaking large-scale plantation drives, promoting solar energy and implementing waste management initiatives, all of which contribute to reducing carbon emissions.

Under the new policy, the pollution reduction achieved through these initiatives will be scientifically measured and registered as carbon credits, which can then be sold in national and international carbon markets to generate revenue for the government.

According to the Department of Environment, the most significant feature of the scheme is its financial model.

Through a transparent tender or request for proposal process, the department will select a specialised agency to identify eligible schemes, carry out documentation and register projects in accordance with international standards.

The entire process will be based on a revenue-sharing model, under which the government will not incur any expenditure. A portion of the revenue generated will go to the agency, while the larger share will accrue to the government exchequer.

All revenue earned through the framework will be deposited directly into the Consolidated Fund of the state and reflected in the Delhi government’s financial accounts. The funds can be used to strengthen development initiatives and environmental improvement efforts.

“These efforts will help unlock economic value from pollution reduction while also supporting environmental goals,” Environment Minister Manjinder Singh Sirsa said.

He said the framework allows the government to quantify achievements, certify them under global standards such as VERRA, Gold Standard and the Indian Carbon Market, and monetise them transparently. He said the revenue would support further pollution control and climate mitigation, positioning Delhi as a model for urban sustainability.

Explaining the objectives of the framework, the department said it aims to establish a structured system to identify, verify and register emission-reduction projects across sectors.

It said a robust Monitoring, Reporting and Verification (MRV) mechanism would ensure data accuracy, transparency and international auditability.

Other objectives include enabling smooth issuance and trading of carbon credits through approved platforms, strengthening departmental capacity for long-term participation in carbon markets, and positioning Delhi as a leader in climate finance aligned with national goals.

The statement said expert agencies would be engaged on a success-fee basis, with payments made only after revenue is earned, ensuring zero upfront cost to the government. Up to three agencies will be empanelled to ensure scalability and wider participation.

The process of engaging these agencies will begin shortly and will cover project assessment, documentation, validation, registration, issuance of credits, trading strategies and capacity building.

Revenue generated under the framework will be used through a dedicated mechanism for pollution control, climate adaptation and environmental management.

If utilised effectively, Delhi’s carbon credit potential could run into hundreds of crores, creating a steady funding source for environmental protection, the statement said.