Q. Consider the following statements:
Statement-I:Carbon markets are likely to be one of the most widespread tools in the fight against climate change.
Statement-II:Carbon markets transfer resources from the private sector to the State
.Which one of the following is correct in respect of the above statements?
Exp) Option b is the correct answer.
Statement I is correct- This statement states that carbon markets are likely to be one of the most widespread tools in the fight against climate change. This statement is generally true. Carbon markets, also known as emissions trading systems or cap-and-trade systems, are mechanisms that put a price on carbon emissions. They create economic incentives for reducing emissions by allowing entities to buy and sell carbon credits. This helps to create a market-based approach to reducing greenhouse gas emissions and has been adopted by many countries and regions as a strategy to mitigate climate change.
Statement II is correct- Carbon markets are a mechanism designed to reduce greenhouse gas emissions by putting a price on carbon. They create a market for buying and selling carbon credits, which represent the right to emit a certain amount of greenhouse gases. In carbon markets, companies or entities that emit fewer greenhouse gases than their allotted limit can sell their excess credits to those who exceed their limit. This allows for a more efficient allocation of emission reduction efforts. While carbon markets involve financial transactions and can transfer resources from the private sector to the state. Instead, they facilitate the exchange of emission allowances between entities, which can include both private and public entities.
But statement II is not the correct explanation of Statement I: As it transfers resources from private sector to the State does not becomes the reason why they are likely to be one of the most widespread tools in the fight against climate change.
