Strengthening the roots of an agri-carbon market

/ Editorials, English /

Strengthening the roots of an agri-carbon market

(Source – The Hindu, International Edition – Page No. – 8)

Topic : GS3 – Agriculture

Context

  • This carbon market opportunity can transform Indian agriculture by incentivizing sustainable practices while addressing climate change.
  • But they face challenges such as socio-economic exclusivity, no training, and delayed payment, which affects their delivery.
  • Technological advancements, policy support, and a carbon market in India should focus on inclusivity.

Introduction to Carbon Markets and Agriculture

Carbon markets provide a significant opportunity for Indian agriculture to evolve into a more sustainable and profitable sector. By adopting environmentally friendly practices, farmers can not only contribute to climate change mitigation but also enhance their income through carbon credits.

Understanding Carbon Pricing

Carbon pricing is essential for reducing greenhouse gas emissions, functioning through two primary types of markets:

  1. Compliance Markets: These are regulated by governments or international bodies (e.g., the UN). They enforce emission caps, compelling companies to either purchase carbon credits or pay taxes on their emissions.
  2. Voluntary Markets: These markets are less regulated and allow for the trading of carbon credits through mechanisms such as the Clean Development Mechanism, Verra, and Gold Standard. Participants voluntarily engage in carbon trading, often to enhance their sustainability credentials.

India’s Carbon Market Initiatives

At the recent COP29 in November 2024, a centralized UN carbon market was approved, paving the way for India to establish both compliance and voluntary carbon markets. Key initiatives include:

  • The National Bank for Agriculture and Rural Development (NABARD) and the Indian Council of Agricultural Research (ICAR) have identified five agricultural carbon credit projects in collaboration with Verra.

Key Principles of Carbon Markets

Successful participation in carbon markets hinges on several principles:

  • Additionality: Carbon credits are granted only when emissions reductions can be directly attributed to the project, necessitating the adoption of new sustainable practices.
  • Permanence: The benefits of carbon storage must be enduring to prevent reversals, ensuring that the efforts yield long-term results.

Existing Projects in India

India has over 50 carbon farming projects registered with Verra, targeting approximately 1.6 million hectares and aiming to generate around 4.7 million carbon credits annually. However, there are significant challenges:

  • Registration: As of now, none of these projects have been officially registered, and farmers have not received any payments for their efforts.

Challenges Facing Carbon Markets in Agriculture

  1. Communication and Training: A significant number of farmers (45%) reported a lack of communication regarding carbon markets, and 60% indicated they had not received adequate training.
  2. Financial Incentives: Nearly 28% of farmers abandoned sustainable practices due to insufficient financial support.
  3. Payments and Support: An overwhelming 99% of farmers have yet to receive payments for carbon credits, leading to widespread dissatisfaction.
  4. Inclusivity: While projects initiated by startups tended to perform better, they often excluded smallholders and marginalized groups.

Recommendations for Improvement

To enhance participation and effectiveness in carbon markets, several recommendations can be made:

  • Higher Credit Prices: Set higher prices for credits from inclusive projects to incentivize smallholders and marginalized groups.
  • Training and Communication: Implement regular training sessions and establish effective communication channels to inform farmers about opportunities and processes.
  • Timely Payments: Ensure that payments for carbon credits are made promptly to build trust and encourage ongoing participation.
  • Research Collaborations: Partner with research institutions to identify suitable interventions that do not compromise yield.

Advancing Technology and Collaboration

  • Utilizing advanced technologies—such as satellite imagery, drones, and sensors—can significantly enhance the monitoring and implementation of carbon farming practices.
  • To ensure the success of these initiatives, collaboration among policymakers, researchers, and private entities is crucial. This collaboration should focus on fostering transparency, inclusivity, and efficient implementation of carbon market strategies in Indian agriculture.

Conclusion

By addressing the existing challenges and implementing the recommended strategies, India can leverage carbon markets to transform its agricultural landscape, benefiting both farmers and the environment while contributing to global climate change mitigation efforts.