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Carbon Credit Accounting: Opportunities and Challenges

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Carbon Credit Accounting: Opportunities and Challenges
Carbon Credit Accounting – Opportunities and Challenges
Abstract
The Ninth Conference of the Parties (COP‐9) decided to adopt an accounting system based on expiring carbon credits to address the problem of non‐permanent carbon storage in forests established under the Clean Development Mechanism (CDM). This article reviews and discusses carbon accounting challenges and opportunities.
As the issues for accounting of CER credits is new and it is on elementary stage, it will generate a fair amount of debate among accountancy professionals. ICAI may come up with some guidelines in due course. The views of taxation authorities would be another interesting dimension. This article may serve as a starting point for such discussions and debate. Despite several unresolved issues carbon credits have emerged as a sought commodity for trade and will continue to interest the country for some time in near future.
As a matter of fact carbon credit can be a boon for Indian companies but we need a proper accounting technique to show them in books. In this article opportunities and challenges in carbon credit accounting has been described. If these challenges resolved properly an accurate and quintessential technique can be invented. This article rightly points out the opportunities and challenges in carbon credit accounting.

Keywords:-
Kyoto Protocol; Clean Development Mechanism(CDM); Carbon accounting, Certified Emission Reductions (CERs), Green House Gases.

Introduction of Carbon credit:-
A carbon credit is a generic term for any tradable certificate or permit representing the right to emit one tonne of carbon dioxide or the mass of another greenhouse gas with a carbon dioxide equivalent (tCO2e) equivalent to one tonne of carbon dioxide.
Carbon credits and carbon markets are a component of national and international attempts to mitigate the growth in concentrations of greenhouse gases (GHGs). One carbon credit is equal to one metric tonne of carbon dioxide, or in some


References: 1. Bothra, N. & Kothari, V.; “Carbon Credits – Unravelling Regulatory, Taxation & Accounting Issues” (indiafinancing.com) 2. http://en.wikipedia.org/wiki/Carbon_credit 3. http://www.nswai.com/images/newsletters/feb2007.pdf 4. http://www.carboncreditsreport.com/ 5. http://www.investopedia.com/terms/c/carbon_credit.asp
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