The Joint Crediting Mechanism (JCM) is a bilateral climate framework between India and Japan under Article 6.2 of the Paris Agreement. It facilitates low-carbon technology transfer and climate finance, generating shared carbon credits (ITMOs) to help both nations achieve their Nationally Determined Contributions (NDCs) while preventing double counting.
The Government of India and the Government of Japan officially adopted the 'Rule of Implementation' for the Joint Crediting Mechanism (JCM).
The JCM functions as a bilateral, project-based offset crediting mechanism that facilitates the diffusion of leading low-carbon technologies, systems, and infrastructure.
The mechanism measures Greenhouse Gas (GHG) emission reductions or removals in a host country and credits them to participating partners to help achieve their respective climate targets.
Japan initiated the JCM in 2013 to offset over 50% of its GHG reduction target. Japan commits to a 73% reduction in GHG emissions by FY2040 compared to FY2013 levels.
Japan provides advanced clean technology and financial subsidies in exchange for Internationally Transferred Mitigation Outcomes (ITMOs).
Key Features of JCM
Technology Transfer: The JCM mandates the deployment of advanced technologies, such as ultra-high-efficiency centrifugal chillers and smart microgrids, from Japan to India.
Sectoral Scope: Projects span 15 distinct sectors, including energy, transport, waste management, manufacturing, and afforestation.
Emission Calculation: The system calculates reductions as the difference between "reference emissions" (below business-as-usual) and actual "project emissions."
Joint Governance: A Joint Committee consisting of government representatives from both nations manages the bilateral framework and determines the sharing ratio of carbon credits.
Project Lifecycle: Participants submit a Project Idea Note (PIN), followed by a Project Design Document (PDD) and a Sustainable Development Implementation Plan (SDIP) for approval.
Measurement, Reporting, and Verification (MRV): An independent, accredited Third-Party Entity (TPE) conducts rigorous validation of the PDD and verification of monitored data.
Registry and Accounting: Each government maintains a National Registry. India applies "Corresponding Adjustments" to all credits transferred to Japan to prevent double counting under international ledgers.
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JCM and the Paris Agreement Article 6.2 Alignment: The JCM directly utilizes ITMOs to meet Nationally Determined Contributions (NDCs), distinguishing it from the centralized Article 6.4 mechanism. Market Integration: As India prepares to launch its Carbon Credit Trading Scheme (CCTS) in 2026, the JCM positions India as a key participant in the global carbon market. |
Green Technology Access: Indian industries gain access to state-of-the-art innovations like Amorphous Solar PVs and advanced Energy Management Systems (EMS).
Climate Finance: The Japanese Ministry of the Environment subsidizes up to 50% of initial investment costs. The Asian Development Bank (ADB) provides the Japan Fund for the Joint Crediting Mechanism (JFJCM), offering up to $10 million or 10% of project costs as grants or interest subsidies.
Net-Zero Pathway: The JCM attracts foreign direct investment to help India achieve its Net-Zero emissions target by 2070.
Industrial Decarbonisation: The mechanism targets the power sector, which currently accounts for over 50% of India’s GHG emissions.
Administrative Complexity: Synchronizing Corresponding Adjustments between national registries remains prone to accounting mismatches.
Verification Bottlenecks: A shortage of locally accredited TPEs causes significant project delays.
Equity Concerns: Benefit-sharing ratios often favor the technology provider, raising concerns regarding equitable distribution.
Financial and Technical Barriers: High remaining CAPEX burdens mid-sized enterprises, while limited knowledge transfer risks long-term operational dependency on Japanese maintenance.
Scaling Interventions: The Joint Committee must transition from isolated pilot projects to large-scale, nationwide programmatic interventions.
Market Liquidity: India must integrate its CCTS registries with the JCM architecture to ensure transparent price discovery.
Localized Manufacturing: Policymakers should mandate capacity-building and localized manufacturing clauses to transform India into a green-tech hub.
Sectoral Expansion: The framework should expand into high-impact areas like agricultural methane capture, EV infrastructure, and municipal solid waste management.
Accreditation: The government must train domestic certification bodies to act as TPEs, reducing the cost and time of the MRV process.
By implementing the Joint Crediting Mechanism via Article 6.2, India and Japan create a bilateral climate finance model. This collaboration combines technology sharing with strict carbon accounting to drive the global net-zero transition.
Source: NEWSONAIR
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PRACTICE QUESTION Q. Consider the following statements regarding the Joint Crediting Mechanism (JCM) adopted by India and Japan:
Which of the statements given above is/are correct? (a) 1 and 2 only (b) 1 and 3 only (c) 3 only (d) 1, 2, and 3 Answer: (b) Explanation: Statement 1 is CORRECT: The JCM is a bilateral cooperative approach that allows participating nations to generate and trade Internationally Transferred Mitigation Outcomes (ITMOs) under Article 6.2 of the Paris Agreement. Statement 2 is INCORRECT: Under the JCM framework, the generated carbon credits (emission reductions) are not transferred exclusively to Japan. Instead, the credits are shared between both participating countries (in this case, India and Japan). Both nations can utilize their respective shares of the credits to meet their own Nationally Determined Contributions (NDCs). Statement 3 is CORRECT: To ensure environmental integrity and prevent the double counting of emission reductions, the JCM mandates the application of a "Corresponding Adjustment" in the national registries of both countries. This means when a credit is transferred, an equal subtraction is made from the host country's ledger so the same emission reduction isn't claimed twice. |
The Joint Crediting Mechanism (JCM) is a formal bilateral carbon offset system established by Japan with partner nations to deploy advanced decarbonising technologies and systematically quantify greenhouse gas emission reductions.
The JCM drives global climate action by mobilising private and public green capital to fund emission-cutting projects, facilitating the diffusion of leading low-carbon infrastructure, and issuing shared carbon credits to meet national climate targets.
The JCM operates directly under Article 6.2 of the Paris Agreement, serving as a practical, rules-based framework for trading Internally Transferred Mitigation Outcomes (ITMOs) while avoiding double-counting through strict national registries.
India benefits immensely from the JCM by securing advanced Japanese technology transfers, accelerating green investment into critical infrastructure like the Delhi Metro, and fast-tracking its overarching goal to achieve net-zero emissions by 2070.
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