Question
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?
(a) Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I
(b) Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I
(c) Statement-I is correct but Statements-II is incorrect
(d) Statement-I is incorrect but Statement-II is correct
Answer:
C
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Explanation:
Statement I is correct : Carbon markets, also known as emissions trading systems or cap-and-trade systems, are mechanisms that enable the buying and selling of emissions allowances. They create a financial incentive for industries and organizations to reduce their greenhouse gas emissions. Carbon markets have gained significant attention and are considered a key tool in global efforts to combat climate change.
Statement II is incorrect : Carbon markets primarily facilitate the transfer of emissions allowances or carbon credits between entities, rather than directly transferring resources from the private sector to the state. While some revenue may be generated through the auctioning or sale of emissions allowances, the specific allocation of these funds can vary depending on the design of the carbon market and the policies implemented by the respective governments.