Question

Consider the following statements regarding carbon markets in India:

1. Carbon credits can be generated by afforestation and renewable energy projects.

2. India has launched a domestic voluntary carbon market..

3. Carbon markets are monitored under the Income Tax Act, 1961.

• A. Only 1 and 2 are correct
• B. Only 2 and 3 are correct
• C. Only 1 and 3 are correct
• D. All 1, 2 and 3 are correct

Answer 1

Answer:

A. Only 1 and 2 are correct

• Carbon Credits Generation (Statement 1): Carbon credits are tradeable certificates representing the reduction or removal of greenhouse gases from the atmosphere. Projects like afforestation (which absorbs carbon dioxide) and renewable energy (which avoids fossil-fuel emissions) are standard methods used to generate these credits.

• Domestic Voluntary Carbon Market (Statement 2): India has actively taken steps to establish its own domestic carbon market. Under the Energy Conservation (Amendment) Act, 2022, the framework for the Indian Carbon Market (ICM) was introduced to facilitate both voluntary and compliance carbon trading within the country.

• Regulation and Monitoring (Statement 3): Carbon markets in India are not monitored under the Income Tax Act, 1961. Instead, they are governed by the Ministry of Power and the Ministry of Environment, Forest and Climate Change (MoEFCC), with the Bureau of Energy Efficiency (BEE) serving as the administrator for the market framework.