India, recognising the challenge of pursuing economic growth in a sustainable manner, has developed an energy efficiency scheme to govern large energy consumers. According to this ‘Inside story on climate compatible development’ by the Climate and Development Knowledge Network, there is great potential to improve efficiency in energy-intensive industries and the electricity sector, which together were responsible for about 60 per cent of India’s greenhouse gas emissions in 2007. The Perform, Achieve and Trade (PAT) scheme aims to tap into this potential. Energy efficiency measures under PAT will help reduce emissions by 26 million tonnes of carbon dioxide equivalent (Co2e) by 2015, thus contributing to the national target of 20-25 per cent reduction in carbon intensity from 2005 levels by 2020. This brief provides an overview of the scheme, examines key issues related to its design and implementation, and concludes with some early lessons for countries considering similar initiatives.