Carbon Credit Markets for Climate Mitigation
Environment & Ecology
- PYQs8
- Articles1
Background
Crucial for understanding global and national climate policy, economic instruments for environmental protection, and potential for farmer income diversification. Relevant for GS3 (Economy, Environment).
Carbon credit markets are mechanisms designed to reduce greenhouse gas emissions by assigning a monetary value to carbon reductions. They allow entities that reduce emissions beyond a baseline to generate credits, which can then be sold to other entities needing to offset their own emissions.
Facts & tables
- Mechanism
- Credits represent one tonne of CO2 equivalent reduced or removed from the atmosphere.
- Purpose
- Provides economic incentives for emission reduction and carbon sequestration projects.
- Types
- Includes compliance markets (regulated) and voluntary markets.
- Application to Biochar
- Biochar projects can generate carbon credits (e.g., VM0042 methodology, 2-2.8 t CO2-eq per tonne biochar).
| Activity | Carbon Credit Potential |
|---|---|
| Avoided emissions from residue burning | Quantified under methodologies like VM0042 |
| Long-term carbon sequestration in soils | Quantified under methodologies like VM0042 |
| Per tonne of certified biochar | 2-2.8 t CO2-equivalent |
| Type | Reference |
|---|---|
| Conceptual area | Agriculture |
| Conceptual area | Environment & Ecology |
| Body | Role |
|---|---|
| International Carbon Registry Systems | Certification and accounting |
Prelims angle
Prelims angle: Conceptual understanding
Prelims angle: Multi-statement analysis
- Economic tool to reduce GHG emissions.
- Credits represent 1 tonne CO2 equivalent.
- Incentivizes carbon sequestration and emission reduction.
- Biochar projects can generate significant carbon credits.
- Supports farmer income and climate goals.
Treaty = agreement between states; body = institution.
| Year | Framing tags |
|---|---|
| 2026 | Multi-statement analysis, Conceptual understanding |
| 2025 | Multi-statement analysis, Conceptual understanding |
| 2024 | Factual recall, Conceptual understanding |
| 2023 | Statement-based questions, Conceptual understanding |
| 2021 | Terminology-based question, Purpose or function of a policy tool |
| 2017 | Multi-statement analysis, Conceptual understanding |
| 2017 | Statement-based questions, Factual recall |
| 2017 | Conceptual understanding, Multi-statement analysis |
Timeline
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Agriculture
Conceptual area
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Environment & Ecology
Conceptual area
-
Prelims 2017
Multi-statement analysis, Conceptual understanding
-
Prelims 2017
Statement-based questions, Factual recall
-
Prelims 2017
Conceptual understanding, Multi-statement analysis
-
Prelims 2021
Terminology-based question, Purpose or function of a policy tool
-
Prelims 2023
Statement-based questions, Conceptual understanding
-
Prelims 2024
Factual recall, Conceptual understanding
-
Prelims 2025
Multi-statement analysis, Conceptual understanding
-
Prelims 2026
Multi-statement analysis, Conceptual understanding
-
Biochar offers a way to turn India’s farm smoke into ‘black gold’
Carbon credit markets incentivize climate action by allowing projects that reduce or remove greenhouse gases, like biochar application, to generate tradable credits, providing an economic pathway for climate mitigation and sustainable development.
See also
Past papers
2017–2026 · 8 questions
In the news
Biochar offers a way to turn India’s farm smoke into ‘black gold’
Carbon credit markets incentivize climate action by allowing projects that reduce or remove greenhouse gases, like biochar application, to generate tradable credits, providing an economic pathway for climate mitigation and sustainable development.
Try these PYQs
In the context of mitigating the impending global warming due to anthropogenic emissions of carbon dioxide, which of the following can be the potential sites for carbon sequestration?
1. Abandoned and uneconomic coal seams
2. Depleted oil and gas reservoirs
3. Subterranean deep saline formations
Select the correct answer using the code given below:
All three options (1, 2, and 3) can be potential sites for carbon sequestration Abandoned and uneconomic coal seams: These underground coal mines already have existing rock formations suitable for storing carbon dioxide. Since they are no longer operational, they can be repurposed for CO2 storage, potentially with the added benefit of enhancing methane capture from abandoned mines. Depleted oil and gas reservoirs: Once oil and gas reserves are depleted, they still have porous rock structures that can trap injected carbon dioxide. Repurposing these reservoirs for carbon storage leverages existing infrastructure and reduces the need for drilling new wells. Subterranean deep saline formations: Deep saline formations are layers of rock saturated with briny water, far below freshwater resources. Their geological properties allow for the storage of large volumes of carbon dioxide with minimal risk of leakage or contamination of freshwater sources.
Consider the following statements with reference to India's response to climate change :
I. India's Long-Term Low Emission Development Strategy (LT-LEDS) is a crucial tool for achieving net-zero emissions by 2070.
II. India's 4th Biennial Update Report (BUR-4) submitted in December, 2024 recorded around 8% decrease in Greenhouse gas emissions in 2020 over 2019.
III. Climate-resilient development necessarily depends on quick and short-term achievement of emission reduction targets.
Which of the following relationships among the above statements is/are correct ?
1. Statement I is empirically supported by statement II.
2. Statement III contradicts the approach implicit in statement I.
3. Statement I and statement III together establish the premise of long-term sustainability.
Select the answer using the code given below :
Statement I is Correct: India's Long-Term Low Emission Development Strategy (LT-LEDS) is indeed a crucial tool for achieving net-zero emissions by 2070. It outlines the strategic framework necessary for sectoral transitions in energy, transport, industry, and forestry to meet this long-term goal. Statement II is Incorrect: While India's 4th Biennial Update Report (BUR-4) does record an approximately 8% decrease in greenhouse gas emissions in 2020 compared to 2019, this decrease is attributed to the economic slowdown and lockdowns during the COVID-19 pandemic, not to structural or strategic efforts towards long-term emission reductions. Therefore, it does not empirically support the strategic framework of LT-LEDS. Statement III is Correct: The IPCC emphasizes that climate-resilient development depends on rapid, deep, and immediate emission reductions in the short term. This approach can be seen as contradicting the long-term focus of strategies like LT-LEDS if they do not also incorporate aggressive short-term actions. Therefore, the correct relationship is that Statement III contradicts the approach implicit in Statement I, making option B correct.
One of the following regions has the world's largest tropical peatland, which holds about three years worth of global carbon emissions from fossil fuels; and the possible destruction of which can exert detrimental effect on the global climate. Which one of the following denotes that region?
Congo Basin Peatlands: The Congo Basin in Central Africa is home to the world's largest tropical peatland complex. This vast peatland stores an immense amount of carbon, estimated to be equivalent to about three years of global fossil fuel emissions. Importance of Peatlands: Peatlands are a critical carbon sink. They store more carbon than all the world's forests combined. When peatlands are drained or degraded, this stored carbon is released into the atmosphere, contributing to climate change. The Republic of Congo, the Democratic Republic of Cong and Indonesia are parties to the Brazzaville Declaration, aimed at protecting the Cuvette Centrale region in the Congo Basin, the world’s largest tropical peatlands, from unregulated land use and preventing its drainage and degradation. _Other Options:_ * Amazon Basin: While the Amazon is known for its vast rainforests, it is not the primary location of the world's largest tropical peatland. * Kikori Basin: The Kikori Basin is located in Papua New Guinea and contains significant peatlands, but not the largest tropical peatland complex. * Rio de la Plata Basin: This basin in South America is primarily known for its grasslands and is not associated with major peatland areas.
Consider the following statements:
Statement-I: Carbon markets are likely to be one of the most widespread tools in the fight against climate change.
Statement-II: Carbon markets transfer resources from the private sector to the State.
Which one of the following is correct in respect of the above statements?
* Carbon markets, which include mechanisms like cap-and-trade systems and carbon offsets, are increasingly being used as a tool to incentivize emissions reductions and help in the fight against climate change. So, statement 1 is true. * Carbon markets typically work by transferring resources from emitters (usually in the private sector) to entities that can reduce or remove greenhouse gas emissions, which can be either private entities or the government. So, statement 2 can also be true.
With reference to Direct Air Capture, an emerging technology, which of the following statements is/are correct?
I. It can be used as a way of carbon sequestration.
II. It can be a valuable approach for plastic production and in food processing.
III. In aviation, it can be a source of carbon for combining with hydrogen to create synthetic low-carbon fuel.
Select the correct answer using the code given below.
Direct Air Capture (DAC) is a technology that removes CO₂ directly from the air for storage or use in various industries. ✅ Statement I is correct:
* DAC captures CO₂ for carbon sequestration, reducing greenhouse gases. ✅ Statement II is correct:
* Captured CO₂ can be used to make plastics and in food processing. ✅ Statement III is correct:
* DAC provides carbon to make synthetic low-carbon aviation fuels by combining with hydrogen. So, the correct answer is: C
Show 3 more PYQs
The ‘Common Carbon Metric’, supported by UNEP, has been developed for
The Common Carbon Metric (CCM) is a protocol developed by the United Nations Environment Program's Sustainable Buildings & Climate Initiative (UNEP-SBCI) for measuring energy use and reporting greenhouse gas (GHG) emissions from building operations. Its purpose is to support GHG emissions reductions through accurate measurement of energy efficiency. It is a universal method of measuring a building's carbon footprint and allows emissions from buildings around the world to be consistently assessed and compared. Therefore, it is used for assessing the carbon footprint of building operations around the world.
Consider the following statements:
1. Climate and Clean Air Coalition (CCAC) to Reduce Short-Lived Climate Pollutants is a unique initiative of G20 group of countries.
2. The CCAC focuses on methane, black carbon and hydrofluorocarbons.
Which of the statements given above is/are correct?
The Climate and Clean Air Coalition (CCAC) to Reduce Short-Lived Climate Pollutants was launched by a joint effort of
1. United Nations Environment Programme (UNEP)
2. Six countries Bangladesh, Canada, Ghana, Mexico, Sweden, and the United States Statement 1 is incorrect. The Climate and Clean Air Coalition (CCAC) is not a unique initiative of the G20 group of countries. While some G20 members were involved in its launch, the CCAC has grown into a broader coalition that includes over 160 governments, intergovernmental organisations, and non-governmental organisations. Statement 2 is correct. The CCAC's primary focus is indeed on reducing emissions of potent short-lived climate pollutants (SLCPs). These include Methane (CH4), Black Carbon (BC) and Hydrofluorocarbons (HFCs).
Which of the following practices can help in water conservation in agriculture?
1. Reduced or zero tillage of the land
2. Applying gypsum before irrigating the field
3. Allowing crop residue to remain in the field
Select the correct answer using the code given below :
Statement 1 is correct: Reduced or zero tillage of the land minimises soil disturbance, promoting better water retention. Less disturbed soil creates a more compact surface that reduces evaporation and allows rainwater to infiltrate deeper into the ground. Statement 2 is incorrect: Applying gypsum before irrigating the field Gypsum (calcium sulfate) is a soil amendment that can improve soil structure and drainage in some situations. However, it doesn't directly conserve water. In some cases, excessive gypsum application might even increase the leaching of nutrients and salts. Statement 3 is correct: Allowing crop residue to remain in the field Leaving crop residue on the soil surface acts like a mulch. This mulch helps suppress weeds, reduces soil erosion, and minimises water evaporation from the soil surface.