Please pardon my ignorance, but just how important is the "Carbon Credit" story? Could someone please shed some more light on this...

Carbon mkt doubled to 6bn in 2008: World Bank 29 May 2009, 0110 hrs IST, TNN

MUMBAI: The turmoil in the financial world notwithstanding, 2008 saw a doubling of the global carbon market to an estimated over 6 billion,according to the latest World Bank report `State and Trends of the Carbon Market Report`. The finding of the report, which is based on data from trading of European Union Allowances (EUAs) under the European Union Emissions Trading Scheme (EU ETS) and from transactions completed under the Kyoto Protocol`s mechanisms, including clean development mechanism (CDM), demonstrates the importance of the carbon market on a global scale. CDM and Joint Implementation (JI) mechanisms under the Kyoto Protocol allow industrialised countries to purchase greenhouse gas emission reductions in developing countries and in countries with economies in transition. According to the report, however, the value of transactions from CDM projects in developing countries declined by 12% to an estimated .5 billion in 2008, with an average price of .8. According to Karan Capoor, senior finance specialist, World Bank:

Iam reprodcing good article from Padmaparna Ghosh - Livemint
Torrent Power Ltd’s gas-fired power plant in Gujarat’s Surat district has been registered by the executive board of Clean Development Mechanism (CDM) becoming the largest project in India to be registered at the United Nations board.
Gas-fired plants (above) are cleaner than coal-fired ones as they emit less greenhouse gases
The project is now set to earn almost 3.2 million carbon credits annually from 2007-2012 and is, by far, the largest of its type to get the green light by the board For every tonne of carbon dioxide these projects reduce, they earn one carbon credit or certificate. Developed countries, which have ratified the protocol, are mandated to reduce their emissions by certain targets. As it is more expensive to change over to cleaner technologies in developed countries, these countries buy reduction certificates or carbon credits from developing countries, thus reaching their reduction target, to combat global warming.
Torrent’s 1147.5MW project would be one of the first greenfield mega power projects to be setup with liquefied natural gas as fuel. The power plant has been developed with plans to drive out coal-fired electricity from the western regional electricity grid. This grid is heavily dependent on electricity generated from coal.
The plant is eligible for carbon credits, as gas-fired plants are cleaner than coal-fired ones, and they release less greenhouse gases into the atmosphere. Therefore, the plant emits less atmosphere-warming gases than other plants in the Western Regional Grid, which is taken as the baseline.
“On an average, gas-fired plants emit 30-35% less carbon dioxide,” says Chaitanya Kalia of consulting firm Ernst and Young. The turbines and rotors in the plant are specifically designed to minimize fuel gas consumption and emission of nitrous gases and CO2.
Gas-fired power plants have, however, come under criticism from some carbon market experts.
“Though gas-based power plants emit less than coal-generated plants, which is why they are getting credits, they do emit a lot of greenhouse gases. Ideally, CDM should promote renewable energy projects which also have strong sustainable developmental aspects,” says a market consultant, who did not wish to be identified.
Critics maintain that such large projects, which earn huge volumes of credits, eat into the rightful share of smaller, renewable energy projects, such as biogas and wind power plants.
“Buyers always want to sign deals with larger projects as it is more convenient. No buyer will like to ink a slew a of agreements with smaller projects,” says Ashutosh Pandey, project consultant, Emergent Ventures Pvt. Ltd.
“It is not just gas-fired plants that are getting challenged. Indian wind and hydro power projects are also getting challenged in the international arena,” says Kalia. He adds that it is difficult to prove that such large projects would not have gone ahead in a scenario where the board revenue was not being generated. One of the most important aspects a project needs in order to get approval as a board project is to prove that without the clean development mechanism, the project would not have gone ahead. “However, carbon credits do add a lot of extra revenue, which helps in deciding the feasibility of a project,” adds Kalia.
Several other gas-fired power plants are in the pipeline waiting for validation and registration. Torrent Power distributes over seven billion units of power annually to industrial and commercial belt of Ahmedabad, Gandhinagar and Surat to over 1.8 million customers spread over an area of 408 sq. km in these cities. With the new plant, Torrent will have a generation capacity of 1,600MW.