Our earth is fronting the worldwide problematic condition of climate change. The problem arises due to anthropogenic activities which result in emissions of CO2 and other GHG (Greenhouse gases) in the eco-system. Human actions such as industrial developments, burning of fossil fuel, and increase in the population. To condense and overwhelmed this delinquent of climate change, and to safeguard mother earth from the antagonistic effect of global warming, CO2 and Greenhouse gases emission must be reduced significantly. To accomplish this goal line, the idea of carbon credit came up. The alleged concept of carbon trading is innovative and applicable in the real world towards environmental conservation. Carbon trading is one such concept that has two effects first, it helps in balancing the emission of harmful gases. Secondly, it is considered as a money-making opportunity and develops a Carbon commodity market. For developing nations alike India, Carbon Credit Trading grants upright prospects of trading with developed nations. Thus, it helps in appealing to more investors. However, carbon credit trading grieves from the restrictions of tax-related frauds, the uncertain linking from latent members, ecological disparity, and high price sensitivity. The paper is descriptive in nature and discusses the particulars of carbon credit trading which will give lead to further research. The paper also talks about various prospects and challenges of carbon credit trading in India.

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Keywords: Carbon Credit, Carbon Credit Trading, Carbon Commodity Market, Emission Reduction.