Can't have single market for carbon credits globally, sovereigns need independence over credits: Sebi chief

That is something we should not lose sight at all, she said.In the transition, finance will be an essential constituent and global capital will have to support the needs of the planet, Buch said.She also said that in the future, Sebi envisages having ESG rating agencies on the lines of rating agencies which rate a borrower while adhering to principles of disclosures and transparency.Assurance is also a very important function in the ESG journey and there is a need to have third-party auditors to take care of this aspect, she said.

Sebi chairperson Madhabi Puri Buch on Tuesday said there should not be a single carbon credit market in the world, questioning why should one pay extra for locally generated resources because they are priced higher in the global market.

Equating the commodity of carbon credits to currency, the capital markets regulator asserted that every sovereign should have the independence to deal with the credits as and how it deems fit.

It can be noted that improvements in processes and energy consumption to drive more efficiencies generates carbon credit which are fungible instruments which can be traded.

''There has been discussion around the globe which said that there should be a single carbon credit market. We believe that it is not necessarily correct, again from the perspective of emerging markets and particularly low cost economies because a carbon credit will become a commodity,'' Buch said.

Giving the example of coffee, Buch questioned why should one pay very high for a coffee from a brand like Starbucks if there is locally generated coffee available for as low as Rs 10 per cup.

''When we have carbon credits generated in our country, our jurisdiction, why should it be that there should be a single price of these carbon credits? it is like saying everybody should have the same cup of coffee or the same currency,'' Buch said, speaking at an event organised by the Ministry of Environment, Forest and Climate Change and National Productivity Council here.

''…It will be an important issue for us as a sovereign to maintain independence over our carbon credits in terms of how we want to deal with them,'' she added.

The theme of environment, social and governance is still evolving and it is very important for ''low cost economies like India'' to have their independent views on what ESG (Environment, Social and Governance) means to them, Buch said.

The developed world led the conversation on environmental regulation and the developing nations only rallied with them, Buch said, stressing on the need for developing nations to set their own narratives now.

''Sebi has been discussing this in various international fora that the important thing is to convert (energy) intensity on a purchasing power parity basis. That is something we should not lose sight at all,'' she said.

In the transition, finance will be an essential constituent and global capital will have to support the needs of the planet, Buch said.

She also said that in the future, Sebi envisages having ESG rating agencies on the lines of rating agencies which rate a borrower while adhering to principles of disclosures and transparency.

Assurance is also a very important function in the ESG journey and there is a need to have third-party auditors to take care of this aspect, she said.

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