摘要：Abstract: Issues of Global warming have been given a pertinent attention in the recent years and it has become exemplary to reduce the emission levels.The companies in the developed world are required to meet certain carbon emission target set by their respective government. If these companies are not able to meet their emission targets, they have an alternative of purchasing these carbon credits from the market i.e. from someone who is successful in meeting these targets and who has a surplus of these credits. In view of the above discussion, present exercise tries to evaluate pros and cons of the mechanism lying behind carbon trading as developed under the Kyoto Protocol, different aspects of carbon trading including legal, taxation and accounting etc with reference to India. Even though India is the largest beneficiary of carbon trading and carbon credits are traded on the MCX, it still does not have a proper policy for trading of carbons in the market. In order to unleash the true potential of carbon trading in India, it is important that a special statute be created for this purpose as the Indian Contracts Act is not enough to govern the contractual issues relating to carbon credits.
