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UPSC Prelims 2009 · Environment · Rules for the Planet
The concept of carbon credit originated from which one of the following?
- (a) Earth Summit, Rio de Janeiro
- (b) Kyoto Protocol
- (c) Montreal Protocol
- (d) G-8 Summit, Heiligendamm
Show the answer and explanation
Answer: (b) Kyoto Protocol
The Kyoto Protocol (1997) set binding targets and created carbon credit trading.
The idea
Kyoto trading units came with legal emission limits. Voluntary credits can also come from verified emission cuts or removals without a legal cap. The Kyoto Protocol gave countries binding emission limits and created an international system for trading units.
Rio 1992: UNFCCC, a framework with no binding targets → Kyoto 1997: binding targets for developed countries → Target = a quota → Emit below quota → spare units → Spare units can be traded = carbon credits
Why the others are wrong
(a) Rio 1992 set up the UNFCCC, but no binding targets or credits.
(c) Montreal deals with ozone-depleting substances.
(d) The 2007 G-8 summit came much later.
Also know
The Kyoto Protocol was adopted at COP3 in 1997 and came into force in 2005 after Russia ratified it. The USA never ratified it and Canada later withdrew. It follows the principle of common but differentiated responsibilities: only developed countries had targets.
🔒 Kyoto (1997, in force 2005): binding targets for Annex I → carbon credits.