DMPQ- What do you understand by the term “ Carbon market”?

A carbon market allows countries, or industries, to earn carbon credits for emission reductions they make in excess of what is required of them. These credits can be traded to the highest bidder in exchange for money.

The buyers of carbon credits can show the emission reductions as their own and use them to meet their own emission reduction targets. A carbon market already existed under the 1997 Kyoto Protocol but several countries walked out of the Kyoto Protocol and thus the demand for carbon credits had waned. As a result, developing countries like India, China and Brazil had accumulated huge amounts of carbon credits. These credits are now in danger of getting redundant.

 

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