Carbon emission trading in India and Sri Lanka

Kyoto Protocol has established three trading mechanisms, namely International Emission Trading (lET), Joint Implementation (11) and Clean Development Mechanism (CDM) which enable industrialized countries to achieve carbon emission reduction targets as economically as possible. Out of these three mechanisms, CDM is the most important mechanism for the developing countries. CDM allows the carbon emission reductions achieved in developing countries from environmentally friendly projects to be transferred to developed countries so that the developed countries could use credits from emission reducing projects undertaken in developing countries towards meeting their emission reduction targets. Several developing countries, including India and Sri Lanka have taken initiatives to develop CDM projects. However, implementation of CDM projects has met various difficulties. This paper examines some of these difficulties and suggests improvements to achieve better results