Adopting Price or Supply Adjustment Mechanisms (PSAMs) in India’s upcoming Carbon Credit Trading Scheme (CCTS) can help avoid market imbalances and ensure credible carbon pricing, suggests a new report.

The report by the Institute for Energy Economics and Financial Analysis (IEEFA) and Environmental Defense Fund (EDF) underscores the importance of integrating stability mechanisms to avoid disruptive interventions; prevent structural oversupply; create predictability for long-term investment; and allow gradual calibration when introducing reforms. Advertisement

“In India’s CCTS, the need for a PSAM is significant. While credit banking offers flexibility, the absence of limits allows credits from early, low-cost reductions to accumulate, which could lead to supply-demand imbalances, depre

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