Context
India, the largest exporter of carbon credits, proposes to have its own uniform carbon market in one year as a large finance avenue for energy transition projects and emission reduction.
What is Carbon trading market?
- Carbon trading is a market-based system aimed at reducing greenhouse gases that contribute to global warming, particularly carbon dioxide emitted by burning fossil fuels.
- Carbon trade is the buying and selling of credits that permit a company or other entity to emit a certain amount of carbon dioxide.
- The value of the carbon is based on the ability of the country to store it or to prevent it from being released into the atmosphere.
Carbon credits
- Carbon credits are like points that are issued to someone for either avoiding carbon dioxide emission or absorbing some amount of CO2 back from the atmosphere.
- One credit is awarded for a one-tonne reduction in CO2.
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