- The Kyoto Protocol established a carbon credit trading mechanism where countries can meet emission reduction targets by purchasing certified emission reduction (CER) credits from emission reduction projects in developing countries under the Clean Development Mechanism (CDM). - India has high potential for carbon credits due to a wide range of possible CDM project types and sizes, technical expertise, and a transparent CDM approval process. However, carbon credit prices are determined by policy issues, market fundamentals, and technical analysis. - India is a party to the UNFCCC and has established a National CDM Authority to oversee CDM projects. CDM projects in India span sectors like energy, manufacturing, and waste management, with the energy sector representing most