The perform, achieve and trade scheme in India: An effectiveness analysis

India's flagship scheme for energy efficiency is Perform, Achieve and Trade (PAT). Under PAT, obligated industries are required to achieve targets either by implementing energy efficient technologies or by purchasing energy efficiency certificates (ESCerts). We ask two questions: is PAT effective so far? Is PAT likely to be effective in future? We conclude the following: the targets are not strict enough to add energy efficiency activities beyond business-as-usual; long-term investment in energy efficiency may not happen; the PAT market may not form; many equity issues remain unaddressed; and, it is too early to assess transaction costs. Based on best practices, the policy implications are: set additional targets that account for rising energy costs; promote long-term investments via clear and consistent goals; create a functioning PAT market platform to ensure cost-effectiveness; reduce equity concerns via normalized targets and standardized auditing; and, keep transaction costs low.