ABSTRACT

Carbon credit accounting is the survival mantra for the next generation dealing with number of techniques, methods and processes to stay in the race causing environmental and climate change issues. The notion of climate keeps on varying every second and every minute. One of the foremost reasons for this altercation is Global Warming; it is a phenomenon which raises the temperature of the earth. This leads to unusual seasonal changes, sandstorms, low pressure, depression, excessive heat pertaining illness and diseases around the globe. Long back in 1997, a protocol to United Nations Framework Convention on Climate Change (UNFCC) was developed known as Kyoto Protocol. This protocol is a legal way that gives an effect of binding to all industrialized and developing countries to check and reduce the greenhouse gas emissions. To live satisfied and happy with being protected sheltered, from such emissions, it is our primary concern to nullify some part of emissions of carbon dioxide gases. Carbon credit accounting is one such a way ahead in the field to lower the GHG emission where the former process has to obey the principles of it. The ongoing government should have stringent and hard policies, process, rules, regulations for carbon credit accounting to be a standard metric utilized by any commercial firm but rather not as a money alluring commodity. Carbon accounting is a social activity that keeps a track on the amount of carbon dioxide equivalents which will not be emitted into atmosphere as a result of altering the projects under Kyoto Protocol mechanism. Emission trading system is often called as cap and trade. The main motive of this principle is the pollution control and the fight against climate change globally. The present research enedvour is entitled to analyse the following objectives

•           To understand the concept of carbon credit accounting.

•           To understand its treatment in the books of accounts.

•           To understand the effectiveness of carbon credit accounting with the help of Indian Companies case study.

            The data required for the study is collected from the various business magazines, newspapers, articles and internet. This research study includes application of accounting principles for the carbon credits. The study also includes the inception of carbon credit accounting and its effects on the pollution emitted entities in India.

            This research endeavor concludes that Carbon trading is an effective tool to earn extra benefits for developing countries and non developed countries. Clean Development Mechanism is also an effective source of technological and economic development for developing countries with environmental upgradation. Although India is the largest beneficiary of carbon trading, it still does not have a proper policy for trading of carbons in the market. For appropriate functioning and development of carbon markets and carbon trading practices, separate financial accounting standard must be established.

Key Words: Carbon Credit, Green House Gases, Kyoto Protocol, UNFCC, Financial Instrument