Carbon Credit System: A Roadmap to Retard the Pace of Emission

In the present era of rising GHGs (Green House Gases) emissions, the carbon credit system has emerged as a
vital market-based instrument to mitigate emissions by assigning monetary value to the act of polluting,
thereby incentivizing low-carbon practices across sectors. Originating from the Kyoto Protocol and further
institutionalized under the Paris Agreement, carbon credits operate through compliance and voluntary markets,
offering a platform where emission reductions achieved via renewable energy, afforestation, methane capture,
and soil carbon enhancement can be traded to meet climate targets. The mechanism plays a pivotal role in
aligning climate policy with economic development, enabling countries and corporations to pursue net-zero
pathways while investing in sustainable development. The Indian landscape is witnessing a paradigm shift
through the establishment of the Carbon Credit Trading Scheme (CCTS) and the Green Credit Programme
(GCP), which collectively promote afforestation, biodiversity conservation, and energy efficiency.
Additionally, India’s emphasis on Nature-Based Solutions (NbS), including mangrove restoration and
agroforestry, aligns with its commitment to create a 2.5–3.0 billion tonne carbon sink by 2030. Despite its
promise, the carbon credit system faces challenges including greenwashing, concerns over additionality,
permanence, and leakage. To counter these, global initiatives such as the Integrity Council for the Voluntary
Carbon Market and technological innovations in Measurement, Reporting, and Verification (MRV) are
enhancing credibility and transparency. Coastal communities, particularly in the domain of blue carbon
ecosystems, stand to benefit significantly through carbon credit-linked eco-enterprises. These initiatives
provide co-benefits including food security, livelihood diversification, disaster risk reduction, and social
empowerment. By integrating local knowledge, gender inclusion, and participatory governance, carbon
projects can transform marginalized communities into climate custodians. Internationally, carbon credits are
increasingly integrated into national Emissions Trading System (ETS) and bilateral trading under Article 6 of
the Paris Agreement, unlocking new dimensions in climate diplomacy and finance. However, the success of
this system hinges on equitable access, stringent validation standards, and robust stakeholder engagement. As
the global economy pivots toward net-zero, carbon credits, if anchored in integrity, science, and justice can
offer a promising pathway to bridge economic growth and environmental sustainability. From reforested
highlands to mangrove-rich deltas, carbon credits not only represent tonnes of avoided CO₂ but also embody
resilience, equity, and a redefined climate future.