{"id":92060,"date":"2025-06-01T11:13:04","date_gmt":"2025-06-01T11:13:04","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=92060"},"modified":"2025-06-01T11:13:04","modified_gmt":"2025-06-01T11:13:04","slug":"consider-the-following-statements-statement-i-carbon-markets-are-l","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-statement-i-carbon-markets-are-l\/","title":{"rendered":"Consider the following statements:\n  Statement-I: Carbon markets are l"},"content":{"rendered":"<p>Consider the following statements:<\/p>\n<ul>\n<li>Statement-I: Carbon markets are likely to be one of the most widespread tools in the fight against climate change.<\/li>\n<li>Statement-II: Carbon markets transfer resources from the private sector to the State.<\/li>\n<\/ul>\n<p>Which one of the following is correct in respect of the above statements?<\/p>\n<p>[amp_mcq option1=&#8221;Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-1&#8243; option2=&#8221;Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-1&#8243; option3=&#8221;Statement-I is correct but Statement-II is incorrect&#8221; option4=&#8221;Statement-I is incorrect Statement-II is correct&#8221; correct=&#8221;option3&#8243;]<\/p>\n<div class=\"psc-box-pyq-exam-year-detail\">\n<div class=\"pyq-exam\">\n<div class=\"psc-heading\">This question was previously asked in<\/div>\n<div class=\"psc-title line-ellipsis\">UPSC IAS &#8211; 2023<\/div>\n<\/div>\n<div class=\"pyq-exam-psc-buttons\"><a href=\"\/pyq\/pyq-upsc-ias-2023.pdf\" target=\"_blank\" class=\"psc-pdf-button\" rel=\"noopener\">Download PDF<\/a><a href=\"\/pyq-upsc-ias-2023\" target=\"_blank\" class=\"psc-attempt-button\" rel=\"noopener\">Attempt Online<\/a><\/div>\n<\/div>\n<section id=\"pyq-correct-answer\">\nStatement-I suggests that carbon markets are likely to be one of the most widespread tools in the fight against climate change. This statement is correct. Carbon pricing mechanisms, including cap-and-trade systems and carbon taxes (often discussed alongside markets), are increasingly being adopted or considered by countries and regions globally as a market-based approach to incentivize emission reductions efficiently. Major economies like the EU, China, and parts of the US and Canada have implemented or are developing carbon markets. International initiatives also promote carbon pricing. Given the global push for decarbonization, carbon markets are indeed becoming a widespread tool.<\/p>\n<p>Statement-II claims that carbon markets transfer resources from the private sector to the State. This statement is a partial truth and can be misleading as a general description of carbon markets. While mechanisms like auctioning of emission allowances in a cap-and-trade system or collecting carbon taxes *do* transfer resources from polluting entities (often private sector) to the government (State), a significant part of the activity in carbon markets involves trading allowances or credits *between* private sector entities. For example, in a cap-and-trade system, a company that has reduced emissions below its allowance can sell its surplus allowances to a company that needs more allowances. This is a transfer of resources within the private sector. Similarly, buying carbon offsets from a project developed by a private entity involves private-to-private transfer. Therefore, stating that carbon markets *transfer resources from the private sector to the State* as a general characteristic is not accurate as it omits the significant private-to-private resource transfers. Thus, Statement-II is incorrect as a comprehensive description.<\/p>\n<p>Since Statement-I is correct and Statement-II is incorrect, option C is the correct answer. Statement-II cannot be the explanation for Statement-I because the mechanism of resource transfer (even if it were accurately described) does not explain *why* carbon markets are widespread tools; they are widespread because they are seen as an economically efficient way to achieve emission reduction targets.<br \/>\n<\/section>\n<section id=\"pyq-key-points\">\n&#8211; Statement-I is correct; carbon markets are becoming a prominent global tool for climate action.<br \/>\n&#8211; Statement-II is incorrect as carbon markets involve significant resource transfers within the private sector, not solely from the private sector to the State.<br \/>\n&#8211; Statement-I being correct and Statement-II being incorrect leads to option C.<br \/>\n<\/section>\n<section id=\"pyq-additional-information\">\nCarbon markets aim to reduce greenhouse gas emissions by putting a price on carbon. This price can be established through setting a cap on emissions and allowing entities to trade allowances (cap-and-trade) or by directly taxing emissions (carbon tax). The revenue generated from auctions or taxes can go to the government, but the trading component involves value flows based on market dynamics between participating entities.<br \/>\n<\/section>\n","protected":false},"excerpt":{"rendered":"<p>Consider the following statements: Statement-I: Carbon markets are likely to be one of the most widespread tools in the fight against climate change. Statement-II: Carbon markets transfer resources from the private sector to the State. Which one of the following is correct in respect of the above statements? [amp_mcq option1=&#8221;Both Statement-I and Statement-II are correct &#8230; <\/p>\n<p class=\"read-more-container\"><a title=\"Consider the following statements:\n  Statement-I: Carbon markets are l\" class=\"read-more button\" href=\"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-statement-i-carbon-markets-are-l\/#more-92060\">Detailed Solution<span class=\"screen-reader-text\">Consider the following statements:<br \/>\n  Statement-I: Carbon markets are l<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1092],"tags":[1105,1120,1375],"class_list":["post-92060","post","type-post","status-publish","format-standard","hentry","category-upsc-ias","tag-1105","tag-economic-development","tag-sustainable-economic-development","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Consider the following statements:  Statement-I: Carbon markets are l<\/title>\n<meta name=\"description\" content=\"Statement-I suggests that carbon markets are likely to be one of the most widespread tools in the fight against climate change. This statement is correct. Carbon pricing mechanisms, including cap-and-trade systems and carbon taxes (often discussed alongside markets), are increasingly being adopted or considered by countries and regions globally as a market-based approach to incentivize emission reductions efficiently. Major economies like the EU, China, and parts of the US and Canada have implemented or are developing carbon markets. International initiatives also promote carbon pricing. Given the global push for decarbonization, carbon markets are indeed becoming a widespread tool. Statement-II claims that carbon markets transfer resources from the private sector to the State. This statement is a partial truth and can be misleading as a general description of carbon markets. While mechanisms like auctioning of emission allowances in a cap-and-trade system or collecting carbon taxes *do* transfer resources from polluting entities (often private sector) to the government (State), a significant part of the activity in carbon markets involves trading allowances or credits *between* private sector entities. For example, in a cap-and-trade system, a company that has reduced emissions below its allowance can sell its surplus allowances to a company that needs more allowances. This is a transfer of resources within the private sector. Similarly, buying carbon offsets from a project developed by a private entity involves private-to-private transfer. Therefore, stating that carbon markets *transfer resources from the private sector to the State* as a general characteristic is not accurate as it omits the significant private-to-private resource transfers. Thus, Statement-II is incorrect as a comprehensive description. Since Statement-I is correct and Statement-II is incorrect, option C is the correct answer. Statement-II cannot be the explanation for Statement-I because the mechanism of resource transfer (even if it were accurately described) does not explain *why* carbon markets are widespread tools; they are widespread because they are seen as an economically efficient way to achieve emission reduction targets. - Statement-I is correct; carbon markets are becoming a prominent global tool for climate action. - Statement-II is incorrect as carbon markets involve significant resource transfers within the private sector, not solely from the private sector to the State. - Statement-I being correct and Statement-II being incorrect leads to option C.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-statement-i-carbon-markets-are-l\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Consider the following statements:  Statement-I: Carbon markets are l\" \/>\n<meta property=\"og:description\" content=\"Statement-I suggests that carbon markets are likely to be one of the most widespread tools in the fight against climate change. This statement is correct. Carbon pricing mechanisms, including cap-and-trade systems and carbon taxes (often discussed alongside markets), are increasingly being adopted or considered by countries and regions globally as a market-based approach to incentivize emission reductions efficiently. Major economies like the EU, China, and parts of the US and Canada have implemented or are developing carbon markets. International initiatives also promote carbon pricing. Given the global push for decarbonization, carbon markets are indeed becoming a widespread tool. Statement-II claims that carbon markets transfer resources from the private sector to the State. This statement is a partial truth and can be misleading as a general description of carbon markets. While mechanisms like auctioning of emission allowances in a cap-and-trade system or collecting carbon taxes *do* transfer resources from polluting entities (often private sector) to the government (State), a significant part of the activity in carbon markets involves trading allowances or credits *between* private sector entities. For example, in a cap-and-trade system, a company that has reduced emissions below its allowance can sell its surplus allowances to a company that needs more allowances. This is a transfer of resources within the private sector. Similarly, buying carbon offsets from a project developed by a private entity involves private-to-private transfer. Therefore, stating that carbon markets *transfer resources from the private sector to the State* as a general characteristic is not accurate as it omits the significant private-to-private resource transfers. Thus, Statement-II is incorrect as a comprehensive description. Since Statement-I is correct and Statement-II is incorrect, option C is the correct answer. Statement-II cannot be the explanation for Statement-I because the mechanism of resource transfer (even if it were accurately described) does not explain *why* carbon markets are widespread tools; they are widespread because they are seen as an economically efficient way to achieve emission reduction targets. - Statement-I is correct; carbon markets are becoming a prominent global tool for climate action. - Statement-II is incorrect as carbon markets involve significant resource transfers within the private sector, not solely from the private sector to the State. - Statement-I being correct and Statement-II being incorrect leads to option C.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-statement-i-carbon-markets-are-l\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2025-06-01T11:13:04+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Consider the following statements:  Statement-I: Carbon markets are l","description":"Statement-I suggests that carbon markets are likely to be one of the most widespread tools in the fight against climate change. This statement is correct. Carbon pricing mechanisms, including cap-and-trade systems and carbon taxes (often discussed alongside markets), are increasingly being adopted or considered by countries and regions globally as a market-based approach to incentivize emission reductions efficiently. Major economies like the EU, China, and parts of the US and Canada have implemented or are developing carbon markets. International initiatives also promote carbon pricing. Given the global push for decarbonization, carbon markets are indeed becoming a widespread tool. Statement-II claims that carbon markets transfer resources from the private sector to the State. This statement is a partial truth and can be misleading as a general description of carbon markets. While mechanisms like auctioning of emission allowances in a cap-and-trade system or collecting carbon taxes *do* transfer resources from polluting entities (often private sector) to the government (State), a significant part of the activity in carbon markets involves trading allowances or credits *between* private sector entities. For example, in a cap-and-trade system, a company that has reduced emissions below its allowance can sell its surplus allowances to a company that needs more allowances. This is a transfer of resources within the private sector. Similarly, buying carbon offsets from a project developed by a private entity involves private-to-private transfer. Therefore, stating that carbon markets *transfer resources from the private sector to the State* as a general characteristic is not accurate as it omits the significant private-to-private resource transfers. Thus, Statement-II is incorrect as a comprehensive description. Since Statement-I is correct and Statement-II is incorrect, option C is the correct answer. Statement-II cannot be the explanation for Statement-I because the mechanism of resource transfer (even if it were accurately described) does not explain *why* carbon markets are widespread tools; they are widespread because they are seen as an economically efficient way to achieve emission reduction targets. - Statement-I is correct; carbon markets are becoming a prominent global tool for climate action. - Statement-II is incorrect as carbon markets involve significant resource transfers within the private sector, not solely from the private sector to the State. - Statement-I being correct and Statement-II being incorrect leads to option C.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-statement-i-carbon-markets-are-l\/","og_locale":"en_US","og_type":"article","og_title":"Consider the following statements:  Statement-I: Carbon markets are l","og_description":"Statement-I suggests that carbon markets are likely to be one of the most widespread tools in the fight against climate change. This statement is correct. Carbon pricing mechanisms, including cap-and-trade systems and carbon taxes (often discussed alongside markets), are increasingly being adopted or considered by countries and regions globally as a market-based approach to incentivize emission reductions efficiently. Major economies like the EU, China, and parts of the US and Canada have implemented or are developing carbon markets. International initiatives also promote carbon pricing. Given the global push for decarbonization, carbon markets are indeed becoming a widespread tool. Statement-II claims that carbon markets transfer resources from the private sector to the State. This statement is a partial truth and can be misleading as a general description of carbon markets. While mechanisms like auctioning of emission allowances in a cap-and-trade system or collecting carbon taxes *do* transfer resources from polluting entities (often private sector) to the government (State), a significant part of the activity in carbon markets involves trading allowances or credits *between* private sector entities. For example, in a cap-and-trade system, a company that has reduced emissions below its allowance can sell its surplus allowances to a company that needs more allowances. This is a transfer of resources within the private sector. Similarly, buying carbon offsets from a project developed by a private entity involves private-to-private transfer. Therefore, stating that carbon markets *transfer resources from the private sector to the State* as a general characteristic is not accurate as it omits the significant private-to-private resource transfers. Thus, Statement-II is incorrect as a comprehensive description. Since Statement-I is correct and Statement-II is incorrect, option C is the correct answer. Statement-II cannot be the explanation for Statement-I because the mechanism of resource transfer (even if it were accurately described) does not explain *why* carbon markets are widespread tools; they are widespread because they are seen as an economically efficient way to achieve emission reduction targets. - Statement-I is correct; carbon markets are becoming a prominent global tool for climate action. - Statement-II is incorrect as carbon markets involve significant resource transfers within the private sector, not solely from the private sector to the State. - Statement-I being correct and Statement-II being incorrect leads to option C.","og_url":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-statement-i-carbon-markets-are-l\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2025-06-01T11:13:04+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-statement-i-carbon-markets-are-l\/","url":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-statement-i-carbon-markets-are-l\/","name":"Consider the following statements: Statement-I: Carbon markets are l","isPartOf":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#website"},"datePublished":"2025-06-01T11:13:04+00:00","dateModified":"2025-06-01T11:13:04+00:00","author":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209"},"description":"Statement-I suggests that carbon markets are likely to be one of the most widespread tools in the fight against climate change. This statement is correct. Carbon pricing mechanisms, including cap-and-trade systems and carbon taxes (often discussed alongside markets), are increasingly being adopted or considered by countries and regions globally as a market-based approach to incentivize emission reductions efficiently. Major economies like the EU, China, and parts of the US and Canada have implemented or are developing carbon markets. International initiatives also promote carbon pricing. Given the global push for decarbonization, carbon markets are indeed becoming a widespread tool. Statement-II claims that carbon markets transfer resources from the private sector to the State. This statement is a partial truth and can be misleading as a general description of carbon markets. While mechanisms like auctioning of emission allowances in a cap-and-trade system or collecting carbon taxes *do* transfer resources from polluting entities (often private sector) to the government (State), a significant part of the activity in carbon markets involves trading allowances or credits *between* private sector entities. For example, in a cap-and-trade system, a company that has reduced emissions below its allowance can sell its surplus allowances to a company that needs more allowances. This is a transfer of resources within the private sector. Similarly, buying carbon offsets from a project developed by a private entity involves private-to-private transfer. Therefore, stating that carbon markets *transfer resources from the private sector to the State* as a general characteristic is not accurate as it omits the significant private-to-private resource transfers. Thus, Statement-II is incorrect as a comprehensive description. Since Statement-I is correct and Statement-II is incorrect, option C is the correct answer. Statement-II cannot be the explanation for Statement-I because the mechanism of resource transfer (even if it were accurately described) does not explain *why* carbon markets are widespread tools; they are widespread because they are seen as an economically efficient way to achieve emission reduction targets. - Statement-I is correct; carbon markets are becoming a prominent global tool for climate action. - Statement-II is incorrect as carbon markets involve significant resource transfers within the private sector, not solely from the private sector to the State. - Statement-I being correct and Statement-II being incorrect leads to option C.","breadcrumb":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-statement-i-carbon-markets-are-l\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-statement-i-carbon-markets-are-l\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-statement-i-carbon-markets-are-l\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/exam.pscnotes.com\/mcq\/"},{"@type":"ListItem","position":2,"name":"UPSC IAS","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/upsc-ias\/"},{"@type":"ListItem","position":3,"name":"Consider the following statements: Statement-I: Carbon markets are l"}]},{"@type":"WebSite","@id":"https:\/\/exam.pscnotes.com\/mcq\/#website","url":"https:\/\/exam.pscnotes.com\/mcq\/","name":"MCQ and Quiz for Exams","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/exam.pscnotes.com\/mcq\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209","name":"rawan239","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","caption":"rawan239"},"sameAs":["https:\/\/exam.pscnotes.com"],"url":"https:\/\/exam.pscnotes.com\/mcq\/author\/rawan239\/"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/92060","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/comments?post=92060"}],"version-history":[{"count":0,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/92060\/revisions"}],"wp:attachment":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/media?parent=92060"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/categories?post=92060"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/tags?post=92060"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}