Clean Development Mechanism (CDM)-An Opportunity of Revenue generation

Carbon trading, sometimes called emission trading, is a market-based tool to limit Greenhouse Gases (GHGs). Nowadays in the cities and even towns of India, a new business has come into picture, which though related to trading, is a departure from the usual commodity or stock trading. It is the trading of polluting gases, which is also known as carbon trading. It is basically a commercial activity that aims at protecting the earth from the harmful emission of gases from industries. The emergence of this opportunity of revenue generation by taking up structured Clean Development Mechanism (CDM) projects has brought about a novel dimension to accounting and taxation. The present article focuses on the contours of Kyoto Protocol, highlighting the financial and accounting challenges being faced by companies in a developing country like India, where it is an emerging field.