Study the Impact of Carbon Credit on Accounting and Taxation of Companies’ Profitability - An Indian perspective

Abstract

This Paper attempts to study accountants' undertaking of carbon tariff in relation to climate change. Specifically, it focuses on how energy sector industries have adapted the working since the introduction of carbon tax. The concept of carbon credit trading is based on the Kyoto Protocol and is primarily used to control greenhouse gas emissions. This concept is used to generate revenue from carbon credits and trade between various companies and the government. The concept is primarily known for reducing carbon emissions to mitigate future climate change; the main targets are greenhouse gases, especially carbon dioxide. It is important to assess the global scenario of the carbon credit business. India signed and ratified the Kyoto Protocol in 2002. Since then, India has been exempted from the treaty; it is expected to benefit from the protocol in terms of foreign investment. In this market, India is one of the first participants. Initially, this concept was only used and cashed in by a few big business players. But now, some newer and smaller companies are also taking advantage of the opportunities. This market is currently the fastest-growing financial market in India.