At present, rise in global temperatures is a major concern all over the world. The speed of warming has been almost three times the century long average
since 1970. The main cause of the rise in global surface temperature is the human-induced emissions of Green House Gases (GHG’s) into the environment. To address the issue of global warming caused by various gases, the concept of emission rights was brought out in the well known Kyoto Protocol.
The recent times have witnessed a rise in the number of transactions involving carbon trading. With India being an important partner in such transactions, the Accounting Standards Board of Institute of Chartered Accountants of India (ICAI) has formulated this Guidance Note on Accounting for Self-generated Certified Emission Reductions (CERs) to provide guidance on the accounting issues involved in such transactions, as the carbon trading market is expected to grow in the years to come.