Context-

The government's new framework promotes voluntary carbon markets to enhance environmentally friendly agricultural practices and support farmers.

Carbon Markets Defined:

·         Carbon markets establish a value for carbon emissions, creating incentives for emission reduction through tradable permits known as 'carbon credits.'

·         Each carbon credit, as per UN standards, signifies the removal, reduction, or sequestration of one tonne of carbon dioxide from the atmosphere.

Types of Carbon Markets:

·         Compliance Markets: These markets operate under regulatory frameworks set by national, regional, or international carbon reduction regimes. They employ a cap-and-trade system, limiting the issuance of 'allowances' for greenhouse gas emissions.

·         Voluntary Carbon Market: Operating independently of compliance markets, this voluntary market allows participants to engage without mandatory emission reduction requirements.