Strengthening the Roots of India’s Agri-Carbon Market

Syllabus: 

GS – 3 – Agriculture and the negative impact of it on environment , Carbon market

Focus :

The article focuses on the potential of carbon markets to transform Indian agriculture by incentivizing sustainable farming practices, reducing greenhouse gas (GHG) emissions, and providing additional income for farmers. It highlights the functioning of carbon markets, key principles such as additionality and permanence, the challenges faced by Indian carbon farming projects, and the measures required to ensure inclusivity, efficiency, and long-term success.

Strengthening the Roots of India's Agri-Carbon Market

Introduction

  • Carbon markets serve as a mechanism to combat climate change by regulating greenhouse gas (GHG) emissions.
  • They can transform Indian agriculture by monetizing sustainable practices and providing additional income for farmers.
  • Carbon pricing involves setting a monetary value on GHG emissions, motivating businesses to adopt environmentally friendly practices.

How Carbon Markets Work

Compliance Carbon Markets

  • Operated under regulations by governments or international organizations like the United Nations.
  • Enforce emission caps on companies, requiring them to purchase carbon credits or pay taxes for exceeding limits.

Voluntary Carbon Markets

  • Function independently of regulations.
  • Allow organizations to trade carbon credits via mechanisms like the Clean Development Mechanism (CDM), Verra, and Gold Standard.

India’s Progress in Carbon Markets

  • Policy Developments
    • COP29 (2024): Approval for a centralized carbon market under the UN.
    • India’s 2023 announcement: Launch of compliance and voluntary carbon markets.
  • Collaborative Efforts
    • National Bank for Agriculture and Rural Development (NABARD) and the Indian Council of Agricultural Research (ICAR) initiated agriculture carbon credit projects.

Key Principles of Carbon Markets

  • Additionality
    • Emission reductions must result directly from the carbon credit initiative.
    • Farmers adopting new sustainable practices are eligible for credits, excluding those already using such methods.
  • Permanence
    • Benefits must last long-term.
    • Example: Soil carbon retention through reduced tillage should not be reversed by conventional ploughing.

Status of Agriculture Carbon Projects in India

Scale and Scope

  • Over 50 agriculture carbon farming projects listed in the Verra registry.
  • Target: 1.6 million hectares of farmland and 4.7 million carbon credits annually.

Challenges in Implementation

  • None of these projects are registered yet.
  • Farmers have not received payments for carbon credits.

Inclusivity and Equity in Carbon Farming

  • Marginalized communities and small farmers largely excluded.
  • Women represented only 4% of participants.
  • General castes owned 63% of land under carbon projects, while SC/STs owned only 13%.
  • Carbon farmers cultivated significantly more land than non-carbon farmers.

Adoption of Sustainable Practices

Pre-Existing and New Practices

  • Practices already in place: Some sustainable techniques existed before the projects began.
  • Newly adopted practices: Zero tillage, intercropping, reduced chemical fertilizer use, etc., meeting the additionality criterion.
  • When implemented effectively, these practices significantly reduce GHG emissions.

Challenges in Implementation

Communication and Training Gaps

  • 45% of farmers reported no communication regarding the project.
  • Over 60% lacked training in new techniques.

Financial Disincentives

  • 28% of farmers abandoned sustainable practices due to insufficient financial returns.
  • 99% had not received carbon credit payments.
  • Limited awareness about carbon farming benefits.

Performance of Carbon Core Projects

1.Startups vs. Larger Corporations

  • Projects managed by startups (“Carbon Core”) performed better than those run by larger corporations.
  • Startups were less inclusive of smallholders and marginalized communities.

2.Need for Social Inclusion–Projects must prioritize inclusivity by involving smallholders and marginalized groups.

Recommendations for Strengthening India’s Agri-Carbon Market

  • Incentivizing Socially Inclusive Projects-Offer higher prices for credits from projects including marginalized communities.
  • Improving Farmer Engagement
    • Effective communication and regular training.
    • Guaranteed and timely payments to farmers.
  • Collaborations for Targeted Interventions
    • Partner with national and international research institutions.
    • Prevent yield penalties and protect food security.

Technological Advancements in Carbon Measurement

  • Remote sensing, satellite imagery, drones, and sensors for monitoring project activities.
  • Enhanced digital technologies make soil carbon and GHG measurement more accurate.
  • Improved accessibility of technology for farmers and project managers.

Conclusion

  • Providing timely rewards and addressing implementation challenges.
  • A robust agri-carbon market can transform Indian agriculture into a sustainable and lucrative sector while contributing to global climate goals.

Associated Article

https://universalinstitutions.com/chapter-13-agriculture/

Mains UPSC Question GS 3

Discuss the potential of agricultural carbon markets in addressing climate change and supporting farmers’ livelihoods in India. Examine the challenges in implementing these markets and suggest measures for their inclusivity and efficiency.(250 words).