Carbon Pricing, in simple terms, is putting a price on every tonne of carbon emitted by the polluters, i.e., the companies and the industries, to encourage them to lower their emissions. It has been successfully implemented in many countries, including India. Many experts and authors have identified Carbon Pricing as the most effective policy to combat 

The Carbon Pricing Leadership Coalition (CPLC) stated that, as of April 2019, there are 46 national and 28 subnational jurisdictions with carbon pricing implementation, and many have scheduled to implement carbon pricing. Carbon Pricing has been applauded by many because the cost goes back to the economic sectors, which are majorly responsible for contributing to the greenhouse gas emissions. 

Carbon Pricing comes in different forms and ways. Any state or country can implement carbon pricing in any way it wants, considering its status and circumstances. Therefore, the flexible mechanism of carbon pricing made the implementation succeed globally. However, the lack of a robust framework of implementation and methods has its harmful effects too. It seems that Indian sectors, especially in the private sectors, need more than just putting a price on carbon.

Indian business and sectors got motivated to implement carbon pricing for their benefits and reasons. Very quickly, major companies like Mahindra & Mahindra, Infosys Limited, Ambuja, Tata Chemicals and Essar Oil, have adopted Internal Carbon Pricing (ICP) and implemented in various ways. Internal Carbon Pricing is what companies do during the business, by putting a price on carbon internally before they emit carbon to reduce emissions and save it from Climate Change risks. On the other hand, External Carbon Pricing is usually in the form of taxes, which are levied by the government to redeem the carbon emitted by companies and industries.

When there is a monetary value attached to every ton of carbon emitted, businesses which take the initiative to reduce their carbon footprint, try to come up with new ideas to cut down the emissions and other risks. For e.g., many companies in the Indian private sector have started with new methods to use energy efficiently by investing in renewables. Therefore, the more renewables the companies use, the lesser are the emissions and lesser are the costs of carbon for the companies. Adoption of ICP has encouraged companies to use more renewable energy. For example, the technology companies like Infosys have now started to invest in renewable power to cut their electricity needs by a percent, decreasing their emissions and, therefore, their carbon costs.

Also, Climate Change risks like physical risk and regulatory risk are usually challenging to identify at the initial stages. Therefore, by adopting ICP, these companies have the benefit of identifying all the