Question:
Regarding “carbon credits”, which of the following statements is not correct?
Regarding “carbon credits”, which of the following statements is not correct?
Show Hint
Ask whether carbon credit prices are set by a market or fixed by an authority.
Updated On: Jul 15, 2026
- The carbon credits system was ratified in conjunction with the Kyoto Protocol
- Carbon credits are awarded to those countries or groups who have reduced the green house gases below their emission quota
- The goal of the carbon credit system is to reduce carbon dioxide emission
- Carbon credits are traded at a price fixed from time to time by the United Environment Programme
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Verified By Collegedunia
The Correct Option is D
Solution and Explanation
Step 1: Understanding the Concept.
A carbon credit is a permit that lets its holder emit one tonne of carbon dioxide (or an equivalent greenhouse gas). Credits were formalised as a market mechanism under the Kyoto Protocol.
Step 2: Check option A.
The carbon credit trading system was indeed created alongside the Kyoto Protocol, so A is a true statement.
Step 3: Check option B.
Countries or groups that cut emissions below their allotted quota earn spare credits, which is a true statement.
Step 4: Check option C.
The whole point of the scheme is to cut carbon dioxide emissions globally, so C is true.
Step 5: Check option D.
Carbon credits are not priced by the United Nations Environment Programme. They are bought and sold on carbon exchanges (like any commodity), so their price is set by market demand and supply, not fixed by a UN body. This statement is false.
Step 6: Final Answer.
Option D is the incorrect statement.
A carbon credit is a permit that lets its holder emit one tonne of carbon dioxide (or an equivalent greenhouse gas). Credits were formalised as a market mechanism under the Kyoto Protocol.
Step 2: Check option A.
The carbon credit trading system was indeed created alongside the Kyoto Protocol, so A is a true statement.
Step 3: Check option B.
Countries or groups that cut emissions below their allotted quota earn spare credits, which is a true statement.
Step 4: Check option C.
The whole point of the scheme is to cut carbon dioxide emissions globally, so C is true.
Step 5: Check option D.
Carbon credits are not priced by the United Nations Environment Programme. They are bought and sold on carbon exchanges (like any commodity), so their price is set by market demand and supply, not fixed by a UN body. This statement is false.
Step 6: Final Answer.
Option D is the incorrect statement.
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