gs1medium
Regarding "carbon credits", which one of the following statements is not correct?
- A.The carbon credit system was ratified in conjunction with the Kyoto Protocol
- B.Carbon credits are awarded to countries or groups that have reduced greenhouse gases below their emission quota
- C.The goal of the carbon credit system is to limit the increase of carbon dioxide emission
- D.Carbon credits are traded at a price fixed from time to time by the United Nations Environment Programme.
▶ Answer & Explanation
Correct answer: D. Carbon credits are traded at a price fixed from time to time by the United Nations Environment Programme.
The Kyoto Protocol established the framework for emission reduction targets and introduced market-based mechanisms like carbon credits to achieve them. These credits are granted to entities that reduce emissions below their assigned targets, incentivizing cleaner practices. The overall aim is to control and reduce global greenhouse gas emissions. However, the trading price of carbon credits is determined by market forces (supply and demand), not by a fixed rate set by UNEP.
Source: UPSC gs1 2011