International Journal of Agriculture Extension and Social Development

author(s)
Harshavardhana NR, Raghavendra S, Vishavjit Kumar, Manu SM, Javeria Anwarkhan Bagewadi, Sathish, BN, Roopashree DH and Nitish Kumar LS

abstract
Climate change mitigation has become a global priority, and carbon markets have emerged as a key policy instrument to balance economic growth with environmental responsibility. As countries refine their approaches, India is positioning itself to build a market system that not only curbs emissions but also supports sustainable development. This review explores the historical evolution, policy frameworks, and future prospects of carbon markets, with a particular focus on India’s emerging Carbon Credit Trading System (CCTS). Drawing from international experiences, it highlights key challenges and opportunities that can shape India’s pathway toward an effective market mechanism. By synthesizing academic literature, global agreements, and national initiatives such as Perform, Achieve & Trade (PAT), Renewable Energy Certificates (REC), and the newly introduced CCTS, the analysis underscores how policy design and institutional learning influence outcomes. The global transition from mechanisms like the Clean Development Mechanism (CDM) to large-scale compliance systems such as the EU ETS and China’s national ETS demonstrates both progress and pitfalls. In India, while PAT and REC provided foundational structures, they were limited by modest ambition and market imbalances. The launch of the CCTS in 2023 marks a pivotal advancement by integrating compliance and voluntary pathways, but its effectiveness will depend on strong governance, transparent infrastructure, and alignment with international systems. Overall, a credible and inclusive carbon market in India can serve as a powerful driver of emission reductions while advancing sustainable development goals.