The carbon and water cycles play an important role in ecosystem functioning and are linked to each other through different physical and biological processes. The hydroclimatic disturbances such as droughts affect both hydrological as well as the ecological processes.

Clean development mechanism (CDM) was included in the Kyoto protocol to support sustainable development in developing countries through technology transfer from developed countries along with the mitigation of greenhouse gas emissions. More than 1000 projects which were registered under CDM from India in the United Nations Framework Convention on Climate Change have been reviewed. Through a CDM project, India as a developing country has enhanced the development of renewable energy projects with financial support through the sale of carbon credit.