Carbon Finance: Its Implication Against the Untoward Effect of Climate Change Due to Industrialization and Urbanization

Abstract

Climate change has become the most important issue across the globe now-a-days. It creates a major risk to the global economy, affecting the wealth of societies, the availability of resources, the price of energy, and the value of financial sectors. It has become one of the most financially significant environmental concerns that the present world is facing. Carbon finance is a new branch of environmental finance which explores the financial propositions of carbon controlled world. Emissions of green house gases due to industrialization and urbanization bring a significant impact in the environmental issues and environmental consciousness is taking its shape in various dimensions in today’s complex business world. Realizing the importance and extent of carbon finance in the present world, in this study, we focused on the mechanisms that help the countries meet their emission reduction obligations in the context of environmental risk mitigation, likely, clean development mechanism, reducing emissions from deforestation and forest degradation, adaptation to adverse and severe weather etc. At the same time we have discussed about the importance of financial services and role of financial sectors to combat the unwanted effect of climate change as well as to support the society to meet the challenge of climate change.

Keywords: Carbon finance, climate change, green house gas, clean development mechanism, reducing emissions from deforestation etc.