Concept:Carbon markets are systems where carbon credits (each representing one tonne of COâ‚‚ reduced) are traded. Projects like afforestation and renewable energy can generate these credits. India launched its own voluntary carbon market in 2023.
Explanation:Statement 1 is correct. Afforestation absorbs COâ‚‚ by planting trees. Renewable energy (solar, wind) replaces fossil fuels. Both activities reduce emissions and can generate carbon credits.
Statement 2 is correct. India introduced its Voluntary Carbon Market (VCM) in 2023. It allows industries to voluntarily trade carbon credits, encouraging emission reductions and supporting India's net-zero goal by 2070.
Statement 3 is incorrect. Carbon markets are not governed by the Income Tax Act, 1961. Their functioning is based on climate policies like the Energy Conservation Act, 2001 or international agreements (Kyoto Protocol, Paris Agreement). The Income Tax Act only deals with taxation of income from carbon credit trading, not the market's operation.
Thus, only statements 1 and 2 are correct.
Answer:A. 1 and 2 only