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What do you understand by emission trading? As a policy tool to control greenhouse gas emissions, the carbon emissions trading scheme can achieve the goal of reducing emissions while minimizing overall emissions reduction costs through market transactions. Examine. 

Topic: Conservation, environmental pollution and degradation, environmental impact assessment.

6. What do you understand by emission trading? As a policy tool to control greenhouse gas emissions, the carbon emissions trading scheme can achieve the goal of reducing emissions while minimizing overall emissions reduction costs through market transactions. Examine.  (250 words)

Difficulty level: Moderate

Reference: The HinduInsights on India

Why the question:

After the passing of the Energy Conservation (Amendment) Bill last December, the Centre is now in the final stages of notifying an Emissions Trading Scheme (ETS) that would require polluting industries to achieve certain standards of energy efficiency and permit them to ‘trade’ these improvements.

Key Demand of the question:

To write about carbon market and emission trading scheme and India’s potential in using it to fight climate change.

Directive word: 

Examine – When asked to ‘Examine’, we must investigate the topic (content words) in detail, inspect it, investigate it and establish the key facts and issues related to the topic in question. While doing so we should explain why these facts and issues are important and their implications.

Structure of the answer:

Introduction: 

Begin by defining emission trading

Body:

In the first part, in detail, write about the structure and functioning of emission trading in a carbon market and its brief history.

Next, write about the potential of emission trading in reducing carbon emissions and fighting climate change. Write the ways in which it would help. Substantiate with facts and examples.

Next, write about the challenges and limitations associated with emission trading in India. Mention ways to overcome them.

Conclusion:

Conclude by writing a way forward.