Concerning the competing interests, the likely shift that is required is from nationality to human survival and from short-term financial interests to long-term humanitarian needs. In a world marked by economic connectivity and efficient movement of goods and services across the globe, a negotiated agreement on climate policy is essential and must be supported particularly by nations that are responsible for the bulk of carbon emissions.

The idea of pricing carbon through carbon trading represents a significant economic proposition. The prospect of creating a market for carbon emissions and allowing these to have a monetary price enables market forces to decide the economics of the cost-effective allocation of resources for pollution control. This would be achieved through creating a right to emit under a policy regime that aims to control pollution harmoniously with the market mechanism. It is essentially a market-based approach through a negotiated internationally acceptable agreement on pollution control policy which is preferred over a conventional command and control one.

Background and Context
A major bone of contention in international negotiations was the possibility of establishing a global market in tradable carbon emissions. The idea of an international carbon market has been discussed since the early 1990s, especially by those countries that have committed themselves to emissions reduction. Usually, they discuss the pros and cons of various approaches and the implications of various national or multilateral schemes. Key multilateral emissions trading is required where the countries with the obligations have to buy credits from other countries rather than taking the necessary actions domestically.

In an era of rapidly increasing awareness of man-made climate change and the imperatives of mitigating global warming, and responding to the enforcement of the Kyoto Protocol, there has been a significant growth of market-based mechanisms that offer considerable advantage when compared to traditional command and control approaches. As of 1997, emissions trading is one of the three 'set' of flexible mechanisms proposed - the other two being Joint Implementation (JI) and the Clean Development Mechanism (CDM).

The Kyoto protocol, which was adopted in December 1997, came into force on 16th February 2005, defining the global strategy to combat climate change. The first commitment period of the Protocol ends in 2012. This represents a significant marker in time. The Protocol assigns the developing countries to take some action in addressing climate change. The concept of carbon trading reflects a shift from an 'obligation-based' approach to a market-oriented 'opportunity-based' approach.

Objectives of the Study
The potential for using the legal economic theory framework in the study of international environmental regulation is vast, but a word of caution needs to be sounded. The double externality frequently results in many potential legal intervention points, making the regulatory task more difficult rather than providing an explanation for the regulators' inaction. Indeed, the presence of multiple equilibria from the cause and effect and strategic interaction among multiple jurisdictions might make the political economy characteristics an unattractive solution path for the regulation of the externality. In the context of the current study, special attention needs to be focused on why and how a market for the environmental problem at hand exists and the implications that this will have for the design of trade and environment legal rules in international law.

The objectives of the study are to trace the development of carbon trade in terms of project development and transactions, and to trace the legal implications at the national and international levels, with a special focus on domestic laws and regulations in India. This involves the identification of types of transactions, services, and policies generated by carbon trade that will influence the demand characteristics of cooperation that are reflected in the unfolding legal regimes.

The study is also a necessary precursor to more detailed studies of the specifics of treaty obligations, for example, related to the current international climate change regime under the United Nations Framework Convention on Climate Change and its Kyoto Protocol concerning the legal duty to take necessary domestic action.

Concept of Carbon Trading
In a nutshell, carbon trading/legal mechanisms are concerned with trade in atmospheric air, and this forms part of the general concept of trade in the environment. The concept of carbon trading has received wide acceptance and gained widespread momentum, particularly after the entry into force of the Kyoto Protocol. The mechanism lays a platform for the convergence of interests between industrialized and developing countries. The USA, which was against the establishment of a climate change regime based on principles of equity and common but differentiated responsibilities and respective capabilities, also accepted the principle of differentiated responsibilities and respective capabilities under the framework of the Kyoto Protocol, although it was not a party to the Kyoto Protocol.

The concept of carbon trading came into existence with the introduction of emission trading as a cost-effective method to control sulfur dioxide emissions by the U.S. Environmental Protection Agency through its Clean Air Act Amendment of 1990. Carbon trading is not different from trading in any other commodity, whether it is gold, silver, or shares. In the market, trading takes place at a particular price, and the price is decided on the basis of demand and supply of commodities. Therefore, air emissions are equally vulnerable to the economic theory of demand and supply.

Definition and Scope
In its purest form, an emission trading system sets a maximum level of total emissions. It then allocates emissions permits to countries, companies, or factories - collectively known as 'sources' - for their 'allowable' emissions. This total allowance of emissions is set out by official standards and is divided into tradable permits that are known as Certified Emission Reductions, or in the case of most industrialized countries, Assigned Amount Units. The polluter can then buy from holders of surplus permits the right to exceed these official limits.

There is no universally accepted definition for emissions reduction trading, and with the expansion of the ancillary market, the multiplicity of trading schemes and market structures in many countries makes the attempts to find a simple definition redundant. Nevertheless, it is generally accepted that carbon trading is a market mechanism where countries or companies and government or non-governmental organizations committed to reducing CO2 emissions sell the right to emit a certain amount to those who cannot meet their emission targets at costs that are lower than the costs of reducing their own emissions.

Types of Carbon Trading Mechanisms
In all these cases of single gases, the trading system is centralized, encouraging a solid market index elected by the participant's specific markets. The ARB NOx programs in California facilitated the regional SO2 program in the northeastern USA. Similar bilateral or multilateral trading between the permit systems is encouraged by the EU ETS and by the general link clause in the international greenhouse gas emissions permit system in the Kyoto Protocol.

Permit trading itself is claimed as a significant innovation in the economic theory of environmental regulation. Permit markets are used worldwide for trading nitrogen oxide (NOx) and SO2 emissions in the USA and CO2 emissions in the European Union. The first cap-and-trade program in the USA, the US Clean Air Act (CAA) SO2 allowance trading program, commenced in 1995 and applies to approximately half the US electricity-generating capacity. Like cap-and-trade programs in the European Union, Japan, and New Zealand CO2 economy-wide, it establishes national limits (cap) but allows within-limits emission trading.

Emission permits are tradable rights to conduct emissions of specified substances up to a predefined limit. Over time, the total number of permits is reduced, thereby forcing companies to reduce their emissions. The rights may be allocated through administrative assignments to individual sources or through a competitive market allocation. In both cap-and-trade systems and taxes, the incentive to produce such permits is created if the demand for permits exceeds the number of permits initially released by the regulator. In the case of a tax, this excess demand causes the tax price to rise. In the case of a cap-and-trade program, it creates a market price for the permits.

In the case of trading permit schemes, these pollutants are in the form of permits. The permit is a limited authorization to pollute up to a specified quantity. Tradable permits, or what people usually refer to as emissions trading, involve private enterprises with the flexibility to choose between investing in property-directing technologies, trading in the emission permits to minimize the cost attached to the control of emission, and possibly purchasing the required permits or allowances on the market.

There are three different types of carbon trading, namely capital trading, options trading, and contract-based trading. In capital-based trading, subject to compliance, firms have to hold allowances in quantities equivalent to their emissions or face penalties. An allowance in this market is a permit or a credit that allows its holder to emit a specified amount of CO2. Unlike a tax, the pollutant price is set in the market and is not directly determined by administrative rules.

Legal Framework for Carbon Trading in India
There are various laws enacted in India while dealing with the environmental issues in a general perspective. The Air Act deals with the problem of pollution. The Water and the Forest Act have been enacted in India to conserve the water and forest. However, all these Acts did not deal specifically with the problem of pollution caused due to the industrial activities. The Environment Protection Act, 1986 was enacted in India to provide protection to the environment.

The term environment is defined in Section 2(a), which has all the attributes required to make it a complete environment protection law. This Act requires taking all necessary steps not only to protect but also to improve the environment. The present Act was enacted to set standards to control or regulate industrial effluents or emissions. The Act did not set standards to regulate greenhouse gas emissions with a reference to the values set by the Kyoto Protocol.

The national laws are not universally felt to address the problems of emissions. National Environmental Laws is not specific law regulating carbon trading in India. However, it is imperative to have a reference of legal mechanisms applicable to carbon trading. Carbon trading in India can either fall under the national environmental laws, the international environmental laws or the international institutions.

National Legislation and Policies
In view of the need for reducing emissions or for sustainable development, many more strategies can be taken into action using the existing legal and policy framework in the country. This can be supported by channeling carbon trading initiatives at the local or regional levels with the support of legislation at the state level, although the country currently lacks an overarching legislative framework for carbon trading. In actual fact, India does not have any legislation in place to encourage the trading of carbon credits, while their neighbors, e.g., China and other Asian countries, have come up with these laws.

The country has not introduced cap-and-trade systems despite the fact that it has become a popular method to reduce the country's emissions as it gives more coverage and certainty and also provides a cost-saving mechanism. The carrot-and-stick policy is applicable in these cases, but it may also be seen as an apparently irrational system since organizations will be more than willing to create emissions just to get a saleable carbon permit. Moreover, India does not have an overarching adaptation law to address national activities either.

The Indian government has passed the National Action Plan on Climate Change (NAPCC), which came into action in 2008. According to the NAPCC, the most ideal method to reduce the growing emission problem should be the use of renewable sources of energy. It talks about the building of solar power stations, enhancing the efficiency of grids, and increasing the number of solar and wind power plants in the country. Another crucial aspect of the NAPCC should be climate science research, which should be encouraged. Energy efficiency in the building sector, awareness of energy conservation through the public, and if needed, it should be brought into the syllabus and teaching process.

The NAPCC also talks about the enhancement of the public transport system to do away with the private petroleum-based transport system, soil nutrient management for agriculture, and creating more jobs in rural areas where the energy requirement will be reduced. These plans cover only a very broad spectrum of the possible approaches.

International Agreements and Commitments
The protocol provides three market-based mechanisms for achieving emission-reduction obligations. They are: profits for transactions in allowance markets, project opportunities for the implementation of Clean Development Mechanism (CDM) projects, or Joint Implementation (JI) activities, AM CER credits for the implementation of CDM projects, or JI activities, monitoring, reporting, and assessment of emission-reduction responsibilities.

The international legal and regulatory structure in India establishes the legitimacy of the development of regulations and decisions that are required to oversee the establishment and operation of the national legal systems relating to carbon trading. The United Nations Convention on Climate Change, the Kyoto Protocol, and associated guidelines regulate carbon trading activities globally. Carbon-related activities at the national and individual level should comply with these international agreements and can be managed by carbon trading regulations in accordance with the international legal obligations that India is required to fulfill.

As far as global agreements are concerned, intergovernmental negotiations have taken place through the UNFCCC process. The Kyoto Protocol was adopted in 1997 under the auspices of the UNFCCC. It occurs as an international agreement on climate change, in the context of minimizing and coping with the impact of emissions. It establishes legally binding targets for the reduction of the emission levels of developed countries. The targeted emissions of each country are mainly listed in the Protocol's Annex 1, and these developed countries must meet their objectives by 2009-2012. Traditionally, each apportioned emission indicator is based on the nation's record to the base year 1990. In addition, through flexible market mechanisms, the Kyoto Protocol offers many possibilities for meeting emission-reduction provisions in a less expensive and more effective way.

Implementation and Enforcement of Carbon Trading Laws
Enforcement of regional or national solutions for greenhouse boiler emissions (with particular reference to India and the Kyoto Protocol disagreements): The types of relevant enforcement mechanisms can be usefully categorized under a variety of headings. Tradable or transferable carbon rights, as presented by Rajamani, is a particularly interesting regional approach that deals in broad principle with the issues discussed by Spring. Treaties, the designation by a state of an authority of its choice to regulate the activities of its registered owners of designated carbon rights, and a clear understanding of what happens in the event of a right holder's non-compliance.

In the absence of an effective international agreement, which governs the economic and security aspects of conceding multinational trading or other forms of foreign concessions in these two operational activities, the likelihood is that such state initiatives may well be subject to international dispute. Therefore, if a state implements a carbon reduction system within India, with all due diligence, and moves towards a market-based registration scheme which may be attractive to parties based in the European Union who are liable to make Emissions Trading Scheme (ETS) units purchase agreement under the EU ETS scheme, what argument could be put forward to challenge the link established due to the economic impact of such a scheme, particularly in an internationally-protocol ratified environment.

Mechanisms for implementation of carbon trading agreements: Inclusion of effective enforcement mechanisms in carbon trading agreements is significant, and failure to do this might lead to poor compliance rates, which could undermine the efficiency and credibility of the trading system. One approach to effective supervision and control is to involve a regulatory institution or independent supervising agency, such as the proposed Asia Carbon Trust in Rev. CC.

In order to be credible, the monitoring function of this regulatory institution would need to be independent, transparent, and subject to appropriate checks and balances. In relation to the fundamentals of developing appropriate functional and legal structures through which trading is managed, the inclusion of coordinated and well-planned options can help to overcome the challenge of managing complex multisectoral and multistage international architectures that are faced in the design of a binding international carbon reduction structure, as argued by Spring.

Role of Government Agencies
In India, the government has an important role to play because of its dual objectives of addressing the environmental, social, and economic problems. It is only when a country has a sufficient basis in the form of a legal and regulatory framework and infrastructure development that a full-scale trading system could develop. The learned authors have therefore recommended that in India, there should be a separate organization responsible for managing domestic carbon trading, whose role is to ensure long-term success in meeting the objectives that have been set. Community involvement is also needed, and sectors not covered by the trading systems should be targeted on their own merits. Some initiatives have been taken in India in the field of methane, which is the first trading of this kind in the country.

Any organization that has the mandate to diminish carbon emissions must have defined goals or targets in order to be able to monitor their activities. These goals or targets will vary greatly between countries or between areas within countries. Thus, it is difficult to provide a one-size-fits-all approach to how a particular project or agency should be set up. However, in India, the Institute of Defence and Strategic Studies has proposed a hierarchical structure to include every aspect of climate control and sustainable urban development, covering effective international negotiations, domestic climate control, and treaty verification. This will greatly enable countries like India to allocate their full effort effectively and help in achieving goals collectively. This would certainly be more effective than a bottom-up approach.

Compliance Mechanisms
In section A below, we have examined two subsections, compliance provisions and the key approaches under the KP and the CDM respectively, which require an in-depth study as they provide a case study of what would be expected of a future global emissions trading scheme under the LCDS. Finally, with the constant threat of the system falling prey to the existing problem of non-compliance, we have examined non-binding pledges and how adherence to these pledges or future compliance obligations could be achieved by introducing those obligations such as mandatory post-2012 targets.

The period of compliance has been an important aspect of the operation of the Emission Trading Markets. This commitment period varies across different regions and different mechanisms used or designed. India has ratified and implemented the KP which has a compliance period that ends in 2012 and presently, Asian countries fall under the non-binding New Delhi ministerial declaration. The CFTA also proposes a compliance period up to 2010-2012. Any future compliance mechanism would operate by way of setting and implementing targets for reducing emissions of the pollutants covered by the mechanism. Additionally, support for compliance monitoring by independent entities or a central compliance tracking body is also necessitated for efficient operation of these markets.

Challenges and Opportunities in Carbon Trading
The development of coherent domestic carbon market structures would serve as a critical foundation by providing both a learning base for broader international designs and guaranteed access for all states to perceived key instruments in climate change adaptation policies, in addition to the legal benefits potentially available to non-industrialized countries. So, does the complete internationalization of the right to emit carbon trading inherently require spending tenure clauses as required on other human rights-related treaties to protect various citizens from blameworthy conduct on the part of national governments? Our analysis suggests the necessity of striking a balance.

The joint approaches of shared domestic potential and international rights recognition may allow non-industrialized states to operationalize the rights to engage in such legally enabling behavior effectively. Boundary dimensions of the joint approach for non-industrialized states, however, would best fit within existing environmental protection norms devoted to advancing sustainable use of resources, as well as pursuing equitable results from global economic development opportunities, with responsibilities held by more advanced states to assist in cost-efficient policy ventures through both knowledge and resources transfers.

Hence, for carbon trading to succeed, the rights of carbon possession and use, as well as the rights of carbon emissions, have to be defined along the lines of other natural resources. There are three social phenomena at work in this established practice, which inevitably prevent carbon trading from achieving its potential as an international pollution control strategy. The great opportunity associated with the carbon trading concept is the prospect of legal benefits to the developing world.

The presence of this large scale of carbon emission reduction possibilities leads to a conclusion that the developing world will hold a significant share of the "right" to emit carbon in the future. In the future, we can anticipate an increase in the demand for international human rights norms to accompany the growth in the consumption of carbon just as readily as we can predict further development of other international resource control norms. Differentiating domestic carbon markets from the fully international market, our analysis suggests that it is the broader national interests of states themselves that will be central in the development, administration, and application of rights in devising an international legal framework on carbon trading, therefore.

Barriers to Implementation
It is likely that there may be some countries which may find it a daunting task to establish a trading infrastructure due to some barriers. The following are the barriers that need to be surpassed to launch ETS in the countries which do not have pollution trading programs: 1) Lack of technical resources and institutions required to regulate and monitor a carbon market; 2) Lack of organized trading institutions to monitor and regulate emissions trading, coupled with lack of legislation and regulations and a mechanism to review and approve project plans; 3) Fear that trading schemes will be difficult to operate and that bonus emissions permits will create uneconomic benefits in some countries.

In conclusion, it may be said that the success of carbon trading depends significantly on the nature of the underlying legal framework. The existing legal structures have not so far been successful in integrating these markets into the legal regime. The significance of future efforts for a successful integration of the carbon trading markets into the prevailing economic order therefore cannot be overemphasized.

Potential Benefits
As mentioned in an earlier section, consideration in the carbon-trading option makes it a credit mechanism of some type. It recognizes that countries are already busy sequestering carbon emissions. It could be in the form of large numbers of developing country people cooking a basic minimum via planting and looking after large amounts of trees, or alternatively a small number of professional ecologists planting, and then managing large numbers of trees. Developing countries are actually doing quite a bit of global environmental service as far as cleaning up the expense of providing a global public good is concerned. Such is the tragedy in their case, devoid of any distinct institutional arrangement, ex-post differentiation by them among the contributors and the non-contributors has to be essentially unfeasible at an international level.

As per the authors, the purpose and potential benefits of the carbon-trading scheme are multifold. It recognizes the fact that different countries (or even sub-units within countries) possess differential capabilities as far as the potential to undertake GHG emission reductions. This really stems from the concept of "sustainable development", i.e. constraints because of poverty, ill-health, illiteracy, etc., of the people of the so-called developing world. It gives the less well-off countries a chance to huddle virtually with the developed nations in evolving a solution to the problem, after all, everyone has to make some sacrifices for ensuring that millennia into the future life is still possible on earth.

If in the process of obtaining this international quorum damaging economic effects could be avoided, so much the better. Additional plus points would emanate if in some form encompassing this international solution non-IPR sharing could be obtained in the local land and environmental qualities, emanating from developing technologies to make this new carbon-trading regime possible. All the potential benefits seem too good to be true. All that is required is a judicious property rights regime in the world for this to happen.

Successful Carbon Trading Projects in India
NRSE and allied activities to produce products and services as marketable items are bound to create a host of small and medium enterprises in the remote villages. Most of them would end up adding value to the raw materials. It would be very important to make energy a guaranteed throughput with a variable/flexible mode and price it independently. Once a market is created, then the indigenous sources of raw material would kick-start. Of course, these very sources would dry up if the market is not guaranteed. Table 7.

The Indian CDM projects that have been admitted in the pipeline (35 out of a total of 44) are worth more than Rs. 1000 crores. As it is seen, most of the funds are expected in the power sector, which is already taken care of in EA 2003. It would be very important to identify the areas which need to be mainstreamed to take care of the industries, especially those suitable for CDM. If the pre-10th and 11th power sectors are considered the 1st and 2nd industrial development phase of the country, the 3rd phase should aim to be primarily industrial estate-centric.

Now, since we have award-winning and award-getting examples in the developed countries, it might be worthwhile to have such examples in India so that political pressure could be developed for their replication. We explore some possibilities of Indian examples as under.

The cornerstone of the atmospheric regime is the part regarding responsibilities of atmospheric burdens based on the principle of common but differentiated responsibilities. In attempting to give effect to this principle - by burdening the market with responsibility - serious conceptual issues concerning the nature and the linkage between the market and sovereignty rights of countries have arisen, especially in the South. These rights and historical responsibility that have led to the present excessive burden of developing countries have long been recognized in other environmental agreements as a unique approach to negotiate the climate conventions.

The need to ensure that market-based instruments are not in contradiction with the principles that they signify led to India's reluctant acquiescence in the establishment of the Pilot Trading Phase. The lack of understanding about the domestic measures limited the implementation of carbon markets, thus reflecting the tension already sparked off by the composition of the innovative Kyoto regime. Indicating a certain cognitive lag, a similar reluctance to limit the domestic measures on climate, like other MEAs, conditioned developments of the international legal and institutional evolution of market-based instruments.

Equity, common but differentiated responsibility, and capacity are principles critical for shaping the global legal mechanisms, which are essential prerequisites for emergent global governance. They are also key determinants of the cosmopolitan world order based on global justice and ethics. These principles demarcate the chasm that separates the countries of the global South and the global North. Though several of these mechanisms have developed further and in a more substantive manner, they certainly did not originate at Rio, which, in a sense, only formalizes the global consensus reached at earlier conferences. However, their development and resonance have always created internal challenges for the developed countries and have led to multiple exemptions, derogations, and transitional phases for developing countries, as well as special treatment for the LDCs.

Comparative Analysis with Global Carbon Trading Practices
Trade India has not entered into any carbon trade at present. Even if it starts doing the same, it cannot transact with any state because there is no authority out of the states, which are competent enough to entertain the trade. By introducing a kind of "European Emission Trading Scheme," we contradict our stand based on the NAFTA system. By entering into the "Linking Agreement" with a trading regime like the UK (which has linked with the Kyoto Protocol), we can execute the same.

In the previous chapters, we have seen how the legal mechanism (existing and proposed) relating to carbon trade has come into practice in areas like carbon in the European countries, especially the United Kingdom. From the explanation of the existing and proposed mechanism of the carbon trade in the aforementioned countries, we can note how the global trading framework in the field of carbon trading has already been established during the last few years. We are yet to come out with our own "Cap and Trade Scheme." Therefore, it is apt to include a thorough discussion on its results and difficulties which are involved by making a comparative analysis with the novel and more efficient carbon trading practices in vogue. The said analysis is made with the following topics like trade, cap, legislation, contract administrative structure, grant, auditing, and liability. The vivid picture of the global practices mentioned would guide the budding efforts in the direction of the Indian carbon trading mechanism which we are to forge our own shortly.

Future Trends and Developments in Carbon Trading
In countries like India, to obtain a green power certificate, it is recommended that hydro power plants be given a hydro certificate, although the environmental impact of large-scale hydro projects is well established in international and Indian environmental laws. Following the recent warning by the Indian Government about no future permitting in the hydro category of the CDM for all hydro projects, it is expected that concerns about the negotiations surrounding the inevitable change to the Mechanism could be pushed by larger developing States. Mitigation measures, mostly employed in agriculture and land use, opt for policies that combine carbon trading with broader land use that maintain and enhance the global warming balance of rural areas. Efforts to bring domestic level restructuring in line with the zero or low carbon objectives would likely depend on the carbon market or the influence of other financial transfer mechanisms. To reach ambitious levels of a decarbonized economy, large reductions will be needed, and not restricted to the easy options provided through CDM.

Considering the progress that has been made at present in the field of climate change, it is estimated that the issue of climate change can only rise in significance. Relying on the obligations put on various Annex-I countries, with different policy interventions becoming a part of their national legal systems, the ability of the Clean Development Mechanism to be legally integrated seems to be uncertain because international laws such as the Protocol are not generally or directly binding on individuals.

There is a growing sense about shared duty both within and outside the parameters of the CDM, with some parties interested in participating beyond their minimum legal obligations. If implemented effectively, emissions trade is expected to benefit the country as per Annex-I commitment in terms of private world to which these interests are directly related. After some problems have been reported with measurements of the reduction of emissions achieved through the sequestration of carbon, more thoughts are being devoted to the issue of sequestration. Because developing countries are in a position to contribute to the bulk of the co-benefits and spillover effects, thinking about land use and change seems to be the precedence for CDM.

Conclusion and Recommendations
These sovereign Climateplus approaches are meant to build upon these established roles of these financial institutions and drive payments from local activities in new, additional directions. In these roles, they will have far more proactive relationships with host countries and their national development plans from the outset and provide measurable benefits to the territorial, enterprise, market, and local balances, thus enhancing their desire to participate and local need to engage. This demonstrated appeal of new money could assist national governments in building global consensus for including strong, non-reserved roles for the convertible assets of local carbon trading markets in the future global climate treaty. Comprehensive legal tools urge executing such approaches.

For their part, the World Bank, the IFC, and other financial institutions are familiar players in industrial, electric power, and natural gas markets. They have long proved means to reduce conventional pollutants, tap renewable energy, and enhance energy efficiency through stimulating changes in markets. Given their specific obligations largely defined by their shareholders, they have made their services available primarily through prescribed paths defined from outside the host countries. The local inhabitants, including large international trading operators, have been the primary beneficiaries of these services.

The chapter has tried to map the carbon market mechanism with respect to India's position and how it can be used to India's advantage. In our opinion, it points to the fact that India's economic growth cannot necessarily follow the traditional growth paths. Yet, with the carbon offset objectives provided in the National Action Plan on Climate Change Special area of the country and its pro-poor markets, the Indian market, and the markets at the state and local levels, can be provided an opportunity to capitalize on its own significance in the carbon market through sustainable development.