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UPSC 2023: 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?
(a)Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I
(b)Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I
(c)Statement-I is correct but Statement-II is incorrect
(d)Statement-I is incorrect but Statement-II is correct
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Not attemptedCorrect Answer: (b) Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I
Cap-and-trade and offset markets are now operating on every continent and are regarded by policymakers as central instruments for meeting climate targets, validating Statement-I. Where allowances are auctioned, companies pay governments—e.g., EU ETS auctions have channelled over €230 billion to Member-State budgets—showing a resource transfer from the private sector to the State, so Statement-II is also correct. However, that fiscal transfer is a consequence, not the explanatory logic for why carbon markets fight climate change; therefore Statement-II does not explain Statement-I. ([climate.ec.europa.eu](https://climate.ec.europa.eu/eu-action/carbon-markets/eu-emissions-trading-system-eu-ets/auctioning-allowances_en?utm_source=openai))
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Frequently Asked Questions
What is the correct answer to this UPSC 2023 Environment & Ecology question?▼
The correct answer is option (b): Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I. Watch the detailed video explanation in our Sherlocking Prelims course on UnlockIAS.
Which year was this Climate Change & Greenhouse Gases question asked in UPSC Prelims?▼
This question was asked in UPSC CSE Prelims 2023, GS Paper 1, as Question 23. It falls under Environment & Ecology > Climate Change & Greenhouse Gases.
What is the difficulty level of this UPSC question?▼
This question is rated "moderate". It requires sound conceptual understanding of the topic.
How many UPSC Prelims questions have been asked from Climate Change & Greenhouse Gases?▼
UPSC has asked 34 questions from Climate Change & Greenhouse Gases (under Environment & Ecology) across multiple years. Visit the topic page to see the full list and year-wise trends.