Strengthening the roots of an Agri-Carbon Market

Carbon markets are emerging as a potential solution to both mitigate climate change and promote sustainable agricultural practices in India. The Indian government has launched initiatives for carbon credit projects, with some projects listed under international platforms like Verra, aiming to generate revenue for farmers adopting sustainable practices. However, several challenges have hindered the success of these projects, including issues with inclusivity, training, and timely payment.

Carbon Market Mechanism

• Compliance vs Voluntary Markets: Carbon markets operate through compliance and voluntary mechanisms. Compliance markets, regulated by governments or international bodies, require companies to either purchase carbon credits or pay taxes for exceeding emissions caps. In contrast, voluntary markets, operating without regulation, allow entities to trade carbon credits through platforms like Verra and Gold Standard.
• Key Principles - Additionality and Permanence: For carbon credits to be valid, projects must meet two key conditions: additionality and permanence. Additionality ensures emission reductions are achieved due to the adoption of new farming practices, while permanence guarantees the durability of these benefits over time, preventing the reversal of carbon sequestration practices.
• India's Carbon Market Status: India has recently announced the launch of its own carbon markets. The National Bank for Agriculture and Rural Development (NABARD), in collaboration with the Indian Council of Agricultural Research, has listed agriculture carbon projects under the Verra platform, aiming to generate millions of carbon credits from sustainable farming practices.

Challenges in Indian Carbon Farming Projects

• Inclusivity Issues: Carbon farming projects in India have been critiqued for their lack of inclusivity. Marginalized communities and small farmers are often excluded, with women comprising only 4% of participants. Larger landowners tend to dominate the projects, with farmers from non-marginalized communities holding a disproportionate share of land.
• Training and Incentives Deficiencies: Over 60% of farmers involved in carbon farming projects lack proper training in new techniques. Furthermore, 28% of farmers abandon sustainable practices due to insufficient financial incentives, highlighting the gap in providing adequate support for long-term participation.
• Payment Delays and Communication Issues: A significant issue is that 99% of farmers have not received payments for carbon credits, with over 45% of farmers reporting poor communication regarding the projects. This has created distrust and discouraged wider participation in carbon credit programs.

Improving the Effectiveness of Carbon Markets

• Incentivizing Smallholders and Marginalized Communities: To enhance the effectiveness of India's carbon market, there is a need to incentivize projects that include smallholders and marginalized communities by offering higher prices for carbon credits from these projects, ensuring social inclusivity and equity.
• Use of Digital Technologies for Monitoring: Recent advancements in digital technologies, such as remote sensing, satellite imagery, and drones, can help improve monitoring and verification of carbon credits, ensuring more reliable and transparent assessments of carbon sequestration practices.
• Collaboration for Improved Implementation: The success of carbon markets in India requires collaboration among policymakers, researchers, and private entities to ensure the development of inclusive, transparent, and scientifically robust systems. This collaboration will help overcome implementation challenges and ensure timely rewards for farmers.

Practice Question:

Q. India's carbon farming initiatives have significant potential to transform agriculture and mitigate climate change. However, challenges such as inclusivity, inadequate training, and delayed payments need to be addressed. Discuss the key issues in the implementation of carbon farming projects in India and suggest measures to improve their effectiveness.