The notion of carbon trading has gained importance since the Kyoto Protocol came into existence in 2005 mandating lower emissions from developed nations. Carbon has therefore become a tradable commodity under the emissions trading mechanism and is used as a credit which can be bought and sold in the carbon markets worldwide. In the wake of the current financial crisis,a slowdown in carbon trading is expected in the short term (2009-2012),however, stringent regulation in developed nations and mandates expected to be formulated in developing nations is expected to drive the carbon market in the long term.