Carbon markets and net-zero sustainability are intrinsically linked, with carbon credits serving as a mechanism for organizations to offset unavoidable emissions, facilitating a transition toward a low-carbon economy. These markets incentivize, through financial rewards, the reduction of emissions by allowing for the trading of carbon credits.

Carbon markets and net-zero sustainability are intrinsically linked, with carbon credits serving as a mechanism for organizations to offset unavoidable emissions, facilitating a transition toward a low-carbon economy. These markets incentivize, through financial rewards, the reduction of emissions by allowing for the trading of carbon credits. 

Key Aspects of Carbon Markets in Net-Zero Strategy:-
Carbon Credit Trading: -
Carbon markets allow companies to trade, buy, and sell emission reduction credits, aiding in achieving net-zero goals.
Voluntary vs. Compliance Markets: -
Compliance markets exist in over 30 countries (e.g., EU, China, UK) while voluntary markets (VCM s) allow for voluntary offsetting, which is integral to most corporate net-zero pledge.
Types of Credits: -
Credits are categorized into avoidance (reducing emissions) and removal (removing carbon), with the latter growing in importance.
Sustainability Impact: -
These markets channel finance into sustainable projects, such as reforestation or renewable energy, reducing global carbon footprints and supporting sustainable development goals.
Challenges and Future: -
Challenges include ensuring credit quality and preventing reputational risks. Future markets are expected to shift towards higher-quality credits, with a greater focus on transparency and accountability to meet climate goals, as highlighted by EY and Deloitte. 
By 2050, it is estimated that the demand for carbon offsets could reach 7.5 gigatons to meet corporate net-zero commitments. 
India's carbon market revolution to achieve NetZero targets
   What is a carbon market? The carbon market is a market-based mechanism designed to reduce greenhouse gas emissions by ensuring financial incentives for organisations.

MJF Lion ER YK Sharma 

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