REVIEW ARTICLES CURRENT SCIENCE, VOL. 111, NO. 11, 10 DECEMBER 2016 1780 *For correspondence. (e-mail: aekka@icar.gov.in) Effective carbon management for carbon market compliance by the rural sector in India A. Ekka*, Md. Aftabuddin and Arun Pandit ICAR-Central Inland Fisheries Research Institute, Barrackpore, Kolkata 700 120, India The increasing concentration of green house gases (GHG) in atmosphere and its dramatic impact on global environment drive countries around the globe to reduce their share of global GHG emission into the atmosphere. The GHG reducing mechanisms are traded under three Kyoto mechanisms namely; joint implementation (JI), clean development mechanism (CDM) and emissions trading (ET). Under CDM, developing countries can invest in carbon emission- reduction technologies and earn certified emission reduction credits which can be then traded in the carbon market. In India, most of the carbon projects are implemented in the energy sector. Very few pro- jects are concerned with rural development. Also, carbon projects in India are not compliant with the policy of IPCC 2007 which says that sustainable de- velopment must have environmental, economic and social dimensions. Most of the projects are imple- mented by the private sector or companies and rarely rural livelihood aspect is considered. The study explores opportunities and intervention in the rural sector to harness the benefits of carbon projects in India. Three important areas of rural economy, viz. agriculture, forestry and energy management were discussed in detail where carbon emission can be ma- naged to earn carbon credits. The article discusses the limitations of carbon trading and concludes by sug- gesting a road map for strengthening and making the rural sector compliant with carbon market for carbon trading. Keywords: Agriculture, carbon markets, energy man- agement, rural sector. GLOBAL warming and climate change have become major threats and are being discussed in a majority of the national and international fora 1,2 . Climate change is a prominent sign of human-driven changes in the global environment. The emission of green house gases (GHG), most significantly carbon dioxide (CO 2 ), is accountable for global warming since industrialization 1,3 . However, majority of GHG emissions is contributed by combustion of fossil fuels 4 , accompanied by huge deforestation 5 . The clearing of natural environment and various other anthro- pological activities have contributed much to global warming by increasing the temperature of earth by more than 2C (ref. 6). Many scientists advocated curbing GHG emission by reducing the production of CO 2 (refs 7–9) to save the earth from further global warming. Reduction of GHG in environment is possible by either reducing its production by improved technologies or tap- ping already produced CO 2 by natural processes such as sequestration in forest and soil. The mechanism for reducing GHG was developed under the United Nations Framework Convention on Climate Change (UNFCCC). According to UNFCCC of Kyoto Protocol, GHG reduc- ing mechanisms are based on three Kyoto mechanisms (Figure 1) namely: Joint Implementation, Clean Deve- lopment Mechanism and Emissions Trading. Under Joint Implementation, rich countries (annex 1 countries) can invest in any developing country (annex B countries) to meet their own emission reduction targets. This mechanism is also known as ‘flexibility mecha- nism’. Emissions trading is also one of the flexibility me- chanisms allowed under the Kyoto protocol in which rich countries (annex 1 countries) can buy or sell some portion of their emission allowances called as ‘assigned amount units’ (AAUs). A clean development mechanism (CDM) involves investing in renewable energy projects or in afforesta- tion/community tree planting called carbon sinks, which would contribute towards offsetting the GHG emissions targets. Tropical forests are also considered as potential natural resource for reducing GHG emissions, especially CO 2 by creating carbon pools 10–12 , therefore, UNFCCC, started an ambitious programme called ‘Reducing emis- sions from deforestation and forest degradation’ (REDD or REDD + ). The programme aims at providing incentives to developing countries for reducing emissions from forested lands and investing in low carbon production technologies for sustainable development. All these acti- vities are in totality known as carbon trading. As per the conventions of Kyoto protocol, India being a developing country has no emission targets to be ful- filled. However, India can implement CDM projects 13 . Out of 892 CDM projects currently implemented in India, 84.32% comes under energy sector both in renewable and non-renewable sources, followed by projects on energy demand covering 7.4% of total CDM projects (Figure 2). Most of the projects are implemented by private sector or companies and they rarely considered rural livelihood