Carbon trading is a form of trading that specifically targets carbon dioxide and it currently constitutes the bulk of emissions trading. The correlation analysis shows that the awareness and attitude of general public towards carbon trading and their perception about impact of carbon trading on the environment are positively and moderately correlated with each other at one per cent level of significance. The exploratory factor analysis indicates that uncertainty, lack of technology, high cost, low value and lack of adoptability are issues related to carbon trading. The regression analysis reveals that uncertainty, high cost and low value have negative impact on environment at one per cent level of significance. The general public should be made aware of impact of carbon trading on environment such as promoting soil health, improving ecological diversity, enhancing bio diversity, mitigating natural disasters, enhancing natural resource conservation, reducing resource depletion, reducing coastal and marine pollution and enhancing environmental sustainability by concerned competing authorities. The issues of uncertainty, high cost and low value related to carbon trading should be removed through appropriate production and marketing strategies by respective stakeholders of carbon trading