Carbon Credit and Carbon Trading as a Climate Change Mitigation Strategy : An Indian Perspective

Amit Kumar Sharma; Anam Fatma

Carbon Credit and Carbon Trading as a Climate Change Mitigation Strategy : An Indian Perspective

Author(s)	Dr. Amit Kumar Sharma, Ms. Anam Fatma
Country	India
Abstract	Climate change has emerged as a major environmental and economic challenge with implications for production, consumption, investment, employment and human welfare. The accumulation of greenhouse gases in the atmosphere is largely associated with fossil-fuel use, industrial production, transportation, electricity generation and changes in land use. Since the environmental costs of greenhouse-gas emissions are not fully reflected in market prices, climate change represents a significant negative externality and a major challenge for environmental economics. Carbon credits and carbon trading have emerged as market-based instruments designed to create an economic value for greenhouse-gas emission reductions and encourage low-carbon investment. This paper examines the role of carbon credits and carbon trading as climate-change mitigation instruments from an economic and policy perspective. Based on secondary data, this paper analyses the economic rationale of carbon trading, its potential contribution to emission reduction, technological innovation and investment, and the major environmental and institutional challenges associated with carbon markets. Here, this paper discusses India’s emerging carbon-market framework and the Carbon Credit Trading Scheme (CCTS). The analysis indicates that carbon trading can improve the cost-effectiveness of climate mitigation by allowing emission reductions to take place where marginal control costs are comparatively lower. The effectiveness of carbon markets depends on environmental integrity, credible measurement and verification, additionality, prevention of double counting, transparent governance and an adequate carbon price. Well-designed carbon markets can become an important component for strategy for achieving sustainable economic development perspective.
Keywords	Carbon credits, Carbon trading, Carbon pricing, Climate change, Emissions trading, Mitigation, Environmental Economics, CCTS, BEE GEI, CBAM, DMRC, Renewable Energy, Public Transportation, Carbon Credit and Carbon Trading Scheme, IRR, CCUS, IoT, CEEW, Sustainable Development.
Field	Sociology > Economics
Published In	Volume 8, Issue 5, September-October 2026
Published On	2026-09-26

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Carbon Credit and Carbon Trading as a Climate Change Mitigation Strategy : An Indian Perspective

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