Chapter 8 of 8
Targets get tighter every year. What was cheap to ignore becomes expensive.
Carbonado
Carbon atom, four bonds · your guide to the market
Next year the target is 6% lower: 0.82 becomes about 0.77. The year after, about 0.72.
The clinker substitution that looked dear at $18 may be the cheapest thing left in three years. Firms that cut early bank credits. Firms that wait buy them.
And this is not only domestic. Trading partners like the EU now charge a carbon border price on imports, so a tonne of carbon in Indian cement can be billed at the border too.
That is the whole market. Now go and run one. Subham will take it from here.
Carbonado says:
Remember this
A carbon market is a staircase, not a single step. Plan for where the target will be, not where it is.
In the game: Easy Mode runs for the number of years you choose, and every year the target tightens.
Linear Reduction Factor
The annual percentage by which an absolute cap is tightened, modelled on the EU ETS Linear Reduction Factor.
Carbon Border Adjustment Mechanism (CBAM)
A carbon tariff on imports from countries with weaker carbon pricing.
Intensity vs Absolute: Is One Inherently Better?
Why the two designs are the same instrument when output is known, why they only diverge under output uncertainty, and why a well-set intensity benchmark can beat a rising absolute cap.
IEEFA (Shrivastava, Trivedi, Sachdeva Michael) · October 2025
Carbonado:What happens when a price sits too low for too long, and the tools India could use to stop it.
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Carbonado:A workshop summary on modelling India's market and the design choices that make it credible.
Read the reportAsia Society Policy Institute · 2025
Carbonado:Power is India's largest emitter and is outside the CCTS for now. This one is about how the two markets should meet.
Read the reportInternational Carbon Action Partnership (ICAP) · 2026
Carbonado:The yearly census of every carbon market in the world. Good for seeing where India fits.
Read the report