Purpose: The purpose of this paper is to analyse the increasing attention of the public on issues relating to climate change and role of clean energy in containing the emission and ensuring equity and justice in the carbon market. Approach and Methodology: The key problem in analysing the issue of climate justice at the subnational level flows from the fact that, the inputs for generations in the state are given by nature be it hydro-power, wind or thermal. Even solar irradiation varies from state to state. Based on this factor endowment states convert this opportunity to have a certain kind of generation mix. Fewer still convert this clean energy generation to a carbon market opportunity. The paper analyses the generation mix of the states and their investment in converting them in to CDM opportunity in the interest of climate justice in moderating emission. Findings: It has been observed that the renewable energy generation is highly correlated with CDM project investment at the state level. Moreover states with higher thermal generation too do make effort to moderate emission by investing in CDM projects. Originality/Value: The paper hitherto ventures in to the uncharted area of the climate justice at the sub-national level within the boundary of a nation. So far the debates focussed on climate justice in the context of developing and developed nations. This paper tries to see what kind of incentive be there to develop a domestic carbon market in the interest of climate justice in the field of energy generation like it has been done in the context of energy efficiency.