Carbon credits: India's bumpy ride to market
As one of the first developing nations to embrace carbon offsetting schemes, India has had to deal with the fledgling carbon market.
The Kyoto Protocol's Clean Development Mechanism (CDM) enables countries to trade 'carbon credits', which can be earned by projects reducing greenhouse gas emissions.
India has become the leading destination for such schemes, playing host to over a third of all carbon-credit projects, which have already brought in an estimated US$350 million.
But delays and difficulties hampered initial progress.
The CDM executive board, which gives projects the final go-ahead, did not become operational until February 2005 and suffered further delays while it deployed staff for on-site monitoring.
The auditing process for proposed schemes was criticised for lack of independent oversight. In particular, calculating the greenhouse gas reductions for specific technologies has proved problematic.
But as the number of projects increases and companies' earnings materialise, confidence in the CDM is growing.