Carbon sequestration and trading: How can India ensure reduced footprints and enhanced incomes in agri-sector

Orange hues illuminated the Jaipur skies, while young and green ‘Kinnow’ trees were slumbering in netted green ponchos. The sandy soil was mottled with frozen dewdrops. It was a hard winter time at Pradyuman Singh’s 2 hectare (ha) farm near Jaipur. But that didn’t worry him much, as bigger troubles plagued his mind. Pradyuman’s farm has Kinnow, pomegranates, lemon, and other local trees, along with a house full of chickens, ducks and rabbits. But he has suffered losses growing garlic over the past two seasons. The price volatility of ‘Kinnow’ and other fruits also worries him. Being a young orchard farmer, he hopes to benefit from the carbon credit dollars. But the only question is how? “We are hearing about carbon credits exchanges, how farmers can earn more and also help reverse climate change. Each year millions of carbon credits are sold from India, yet we don’t have an Indian carbon exchange. We are losing out on uncountable carbon dollars,” Pradyuman said. If the carbon market is harnessed properly farmers like Pradyuman can earn a little extra cash each year. India doesn’t have a carbon exchange or regulatory mechanism to efficiently woo the ever-rising carbon dollar. [caption id=“attachment_11949502” align=“alignnone” width=“415”] Pradyuman’s farm. Image has been shared by the author[/caption] Speaking with carbon veteran Manish Dabkhara, Chairman & MD EKI Energy services it was clear that India already has a large share of the global carbon credit system. Manish claims to have the lion’s share of the Indian carbon pie. “India roughly sold 100 million carbon credits. And 35% of the global carbon credits are Indian, and the market value of the Indian carbon market was 25,000 crores in 2021,” Manish explained. As per reports, the global carbon markets could generate USD $500 billion by 2050. And farmers can earn between 20-60 carbon credits per ha apart from the produce and soil benefits. But, is the carbon market suited for small farmers? “Sequestering carbon from agriculture can be economically viable with a project size of 1000 acres or above. Hence the government can encourage Farmer Producer Organisations (FPOs) and NGOs to create carbon clusters, where carbon credits are generated and accounted for. Currently, there is no state or national policy on carbon credits or carbon financing. Although to regularise some aspects of carbon compliance the government has introduced the Energy Conservation Bill,” he said. Way into carbon negative livelihoods Kundan Kumar is a development worker from rural Chhattisgarh. He primarily works with tribal communities and has been battling with the Carbon question. “Most of our tribal communities already practise regenerative agriculture and agro-forestry. We lead carbon negative lives already. If the government gives us help, we can really capitalise on carbon credits and also add to India’s GDP. Farmers in Indonesia, Africa, etc. are doing it, why can’t we?” Kundan questioned. Each year thousands of farmers move towards horticulture, agro-forestry and the government also plants millions of trees each year, but none of it gets added to the carbon credit system. For example, a mango or apple orchard can get 20-30 carbon credits, whereas creation of mangroves groves earn as much as 60 carbon credits. Imagine what a new forest would get? But can’t one get credits for older trees or existing plantations. Sadly, no, but there is a trick. Trees planted up to three years ago can be registered for carbon credits. And the collective works better than individual small farmers. The costs of auditing, registration and upkeep costs make it economically unviable for the 1-acre crop farmer. Orchard owners, fruit and timber farmers fare better, compared to conventional crop farmers. Way forward for India First of all, India needs to have National Carbon exchange, meanwhile agricultural or forest based states can have regional carbon exchanges- trading and selling carbon credits. By creating a foundation, India can be projected as a carbon sink for international emitters. Meaning international corporations and Indian ones can buy carbon credits directly from the national or state carbon exchanges to offset their emissions. The government can even consider getting an early start on carbon futures trading. After the exchanges, India needs to have an auditing parameter aligned with the EU and USA. As the global protocols are still framing up, India can lead by proposing a Global South based carbon auditing system, which is equivalent to the international systems. This can be a participatory guarantee system (PGS) similar to organic PGS certification system. Communities can be custodian in a carbon PGS. There is also a major gap in awareness on carbon farming through agriculture. India is a largely agrarian geography, with over 16 agro-climatic zones, and has a huge potential of generating carbon credits. A national agency can expedite registrations and auditing. FPO can take lead role in collectively trading carbon credits. If possible, special clauses should be incorporated for organic farmers and the historic contributions of carbon negative communities. Both FPOs and NGOs should be invited by the government in a PPP model to restore barren or degraded soils and also earn carbon credits. Especially in the coastal areas where creation of new mangroves stretches can boost the incomes, restore marine life and the environment. River banks present another ideal zone for earning carbon credits. The Namami Ganga program fits right into the carbon credit system. Organic agriculture and indigenous trees planting initiatives announced as part of the project will be potential carbon sinks. If registered, the entire Ganga restoration project can earn many carbon dollars for the government. In fact, the government can easily highlight degraded regions within each district. NGOs, private or local communities can then work with the government over time to develop these areas as carbon sinks generating carbon credits. Overtime, like in tea and coffee, the government can consider relaxing the land ceiling limits for forestry, fruit and other tree crops. This relaxation must be given with ecological restraints. It must be legally binding for farmers to grow with regenerative and organic methods any timber or fruits. They must also not avail any government agri-input subsidies, and sequester the maximum carbon possible using organic methods. Such zones should be encouraged around cities and semi-rural areas. New cities and urban areas should have green zones around it, that can potentially offset some part of the cities’ emissions. Not only will this move encourage more tree plantations, but also help India achieve its climate and carbon neutral targets. It also has added benefits for soil, water and environmental restoration. To encourage Indian carbon entrepreneurs abroad, India could engage in carbon diplomacy in Africa. We should watch developments of the African carbon markets, and allow for African carbon credits to be traded in Indian markets too. Indian investments could also play an important role in restoring African hinterlands and also gaining cheaper carbon credits, for our own domestic and trading needs. Rupee can also become the carbon trading currency especially in the Global south. India is already an emerging carbon credit producer, and if we play our cards right, we can supplement our farmers’ incomes, restore degraded soils and become a leader in the carbon world. The author is an independent agri-policy analyst and former director – Policy and Outreach, National Seed Association of India. He tweets at @Indrassingh. Views are personal. Read all the Latest News , Trending News ,  Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook , Twitter and Instagram .