ABSTRACT The building sector is responsible for more than 40% of global energy use, 25% of global water, 40% of global resources and l/3rd of global greenhouse gas (GHG) emissions (UNEP SBCI). Several policy instruments were implemented with an aim to improve energy efficiency or reduce energy use and thereby reduce GHG emissions; but every policy measure has its own advantages, ideal target groups etc., and none of them can alone capture the entire enormous potential for energy efficiency improvements due to few market barriers (UNEP SBCI, 2007). Buildings in India eonsume 33% of the energy (electricity) i.e. with residential sector at 22% and commercial sector at 8%. USAID ECO - III project estimates that 1,241 M.sq.m of commercial floor space (i.e.66% yet to be built) would be added by the year 2030. With increase in commercial space in the following years the country would not be able to cope up with the demand and supply with the existing disparities. Therefore it is need of the hour to implement energy efficiency in the buildings. Currently India is witnessing a tremendous increase in projects registered under voluntary certification programs such as LEED/IGBC, GRIHA, and NBSRP(NationaI Building Star Rating Program); COM (Clean Development Mechanism) Energy Efficient Buildings (EEB) (market based instruments). Most of the EEB COM projects are LEED or GRIHA rated and currently few projects are generating CERs (Certified Emission Reduction). Therefore the study explores the relation between these instruments and sec if the explicitly state of the two (instruments) would drive energy efficiency in commercial building sector in India. Internationally several building ratings and carbon trading mechanisms have been emerged over past few years. And it is noted that there had been a paradigm shift from intent based ratings (eg: LEED) to performance based ratings (eg; NBSRP, NABERS etc); the carbon emissions saved through these instruments are not accounted in any of the trading mechanisms (other than buildings which are under CDM). Some of the major findings of the study were that buildings which have applied for intent ratings are also applying for performance based ratings; some buildings generate financial incentives by trading Energy Saving Certificates in Emission Trading Schemes. Though such options exist, occupants/owners are unaware of such schemes; even the different organizations involved in these building ratings and carbon trading are also unaware of these inter-linkages.