This book chapter aims to provide a panoramic view emerging notion of carbon trading (CT), a critical mechanism to address climate change concerns by incentivizing the reduction in carbon emissions and promoting green investments. It includes the meaning of the carbon market (CM), CT, and various participants of the market and elucidates the carbon market evolution and its underlying principles. Furthermore, it provides an understanding of the mechanism of the carbon market, the concept of carbon credit (CCs), and carbon offsetting (CO) and delves into the intricacies of carbon taxation as a measure to curb emissions. Finally, this chapter concludes by elaborating the operations of the compliance carbon market (CCM) and the voluntary carbon market (VCM), and their crucial role in fostering the transition to a low-carbon sustainable world.