---
title: "Carbon Credit Trading Scheme — Definition & Meaning"
description: "A Carbon Credit Trading Scheme allows entities to buy and sell units for reducing carbon emissions. It's crucial for compliance in climate policy."
url: "https://modeldiplomat.com/learn/glossary/carbon-credit-trading-scheme"
---

[New](https://modeldiplomat.com/)

#

Model Diplomat Research Team · Last reviewed June 22, 2026

TL;DR

- A Carbon Credit Trading Scheme is a market mechanism that lets entities buy and sell certified units representing reductions or removals of one tonne of carbon dioxide-equivalent emissions.
- How does India's Carbon Credit Trading Scheme differ from the earlier PAT scheme?
- What is the legal basis for carbon credit trading under the Paris Agreement?
- Distinguish between cap-and-trade and baseline-and-credit systems.?
- How does the EU's CBAM affect carbon markets relevant to India?

[Civil Service & Diplomatic Exams](https://modeldiplomat.com/learn/civil-services/glossary)Updated June 22, 2026

A Carbon Credit Trading Scheme is a market mechanism that lets entities buy and sell certified units representing reductions or removals of one tonne of carbon dioxide-equivalent emissions.

Go beyond the definition

## Research Carbon Credit Trading Scheme like a delegate

Model Diplomat's AI drafts position papers, speeches, and country research with real sources — built for MUN and politics students.

## Research it like a delegate

Research on modeldiplomat.com

## Ask a follow-up about Carbon Credit Trading Scheme

Open a cited briefing in Model Diplomat search — timelines, positions, and sources you can use in committee or exam answers.

[Start research on Carbon Credit Trading Scheme](https://modeldiplomat.com/search?q=Explain%20Carbon%20Credit%20Trading%20Scheme%20%E2%80%94%20key%20dates%2C%20actors%2C%20positions%2C%20and%20sources)

Example

In 2023 India's Ministry of Power notified the Carbon Credit Trading Scheme, designating the Bureau of Energy Efficiency as administrator to build a national carbon market replacing the PAT scheme's energy-savings certificates.

Keep learning

## Go deeper than the definition

Lessons

[Climate Change India S Commitments](https://modeldiplomat.com/learn/lessons/upsc-environment-ecology-climate-change-india-s-commitments)[Renewable Energy Climate Finance The Green Transition](https://modeldiplomat.com/learn/lessons/upsc-environment-ecology-renewable-energy-climate-finance-the-green-transition)

Courses

[Upsc Environment Ecology](https://modeldiplomat.com/learn/courses/upsc-environment-ecology)

[Explore all Civil Service & Diplomatic Exams lessons](https://modeldiplomat.com/learn/civil-services)[Test yourself with a quiz](https://modeldiplomat.com/learn/glossary/quiz/civil-services)

## Take Carbon Credit Trading Scheme beyond the glossary

Ask the AI research engine built for diplomacy — get briefings, position papers, and speeches with sources you can cite in committee.