However, it has also triggered an environmental crisis marked by high carbon emissions and the unwelcome reality of climate change. A carbon market operates as a platform where nations or corporations can buy or sell carbon credits, which are essentially certificates for the reduction of greenhouse gas emissions. Carbon markets can have two broad formats: cap-and-trade systems and carbon offset markets. This distinction affects the strategies these countries adopt, the scope for trade dynamics in the carbon market and eventually the equilibrium in carbon credit pricing. South Asia’s combined population and increasing industrial activity make it a significant contributor to global carbon emissions.
