Correct Option
The concept of carbon credit was formally established under the Kyoto Protocol, adopted in 1997. This international treaty aimed to reduce greenhouse gas emissions by setting binding targets for industrialized countries. To facilitate these reductions, it introduced flexible market-based mechanisms such as Emissions Trading, the Clean Development Mechanism (CDM), and Joint Implementation (JI).
A carbon credit represents one tonne of carbon dioxide (CO₂) equivalent reduced or removed from the atmosphere. These credits allow countries with emission reduction commitments to meet their targets by investing in emission-reducing projects elsewhere or by trading emission allowances.
Incorrect Options
The Earth Summit, held in Rio de Janeiro in 1992, led to the adoption of the United Nations Framework Convention on Climate Change (UNFCCC) and Agenda 21, but it did not introduce the carbon credit mechanism.
The Montreal Protocol, adopted in 1987, is an international treaty designed to protect the ozone layer by phasing out the production of ozone-depleting substances. It is unrelated to greenhouse gas emissions or carbon credits.
The G-8 Summit in Heiligendamm, held in 2007, was a meeting of leading industrialized nations where climate change was a significant topic of discussion, but it was not the origin of the carbon credit system.