Mr. Sarang Balpande and Dr. Hariom Puniyani
Published in Vol.15, 2025
KEYWORDS: Carbon credits trading, Kyoto Protocol, Carbon credit market, Greenhouse gases, Climate change, Energy Conservation Act.
ABSTRACT:
The concept of carbon credit trading, introduced under the Kyoto Protocol by the United Nations Framework Convention on Climate Change (UNFCCC) in 1997, represents a market-based approach to mitigating climate change. A carbon credit equates to reducing or removing one metric tonne of carbon dioxide (CO₂) from the atmosphere, allowing organisations to trade these credits to offset excess emissions. This mechanism incentivises sustainable practices by attaching economic value to emission reductions.
Carbon Credit is an innovative financial instrument that assigns a monetary value to carbon emissions and enables businesses desiring to offset their own emissions to purchase carbon credits generated by sustainable initiatives. Carbon Trading and Financing will create great opportunities in the Indian Market, and this will definitely accelerate the Indian economy.
This paper shall discuss the evolution and need for carbon credits in India. Also, it assesses the developing legal framework for carbon credit trading. Despite India’s commitment to climate goals under the Paris Agreement and recent legislative reforms, including the Energy Conservation (Amendment) Act, 2022, there remains limited awareness, regulatory clarity, and infrastructural readiness to support an effective domestic carbon market.
Highlighting significant business opportunities for India to become a key player in the global carbon market. However, unlocking this potential requires policy standardisation, enhanced institutional support, and greater stakeholder engagement. This study contributes to the existing literature by offering insights into the practical challenges and financial prospects of carbon credit trading in an emerging Indian economy context.
DOI: https://doi.org/10.64833/hislopia.j.vol.15.issue1.116-127