Sustainable Carbon Accounting & Taxation Aspects in India

Global warming now is the biggest threat facing the planet earth. With rapid Industrialization and growth of the global economy, the CO level in the atmosphere has risen to alarming levels. To neutralize the release of harmful gases into the atmosphere, leaders of all nations have taken a significant pledge and initiative called carbon credit. Kyoto protocol came into being with the objective to reduce the damages caused by climatic change. With the idea of carbon credit, several allied issues surfaced with respect to how the accounting issues of these credits need to be accounted for. At present, there are no accounting standards or interpretations that specifically deal with the carbon credits. The organization, therefore, has to apply judgments and adopt the best practices or standards laid down by their Country specific accounting bodies. Very recently a number of accounting practices have emerged but different approaches make the comparison and interpretation of accounting results a difficult task. A distinct framework for carbon credit accounting is needed to make the transactions in carbon credits transparent and making the financial statements understandable by all the stakeholders. The major objective of carbon accounting is to establish a formal structure within Organizations for climate change strategy, identify carbon-related risks and opportunities, introduce carbon management systems and finally achieve carbon reduction targets