The Hindu Editorial: December 19, 2024.

Strengthening the roots of an agri-carbon market

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

Introduction to Carbon Markets and Agriculture

• Carbon markets present an opportunity to transform Indian agriculture into a profitable venture for farmers by adopting sustainable practices while addressing climate change.
• Carbon pricing plays a key role in mitigating climate change through compliance and voluntary carbon markets.
• Compliance markets are regulated by governments or international bodies like the UN and enforce emission caps, requiring companies to either purchase carbon credits or pay carbon taxes.
• Voluntary markets, unregulated, enable trading of carbon credits through mechanisms like the Clean Development Mechanism, Verra, and Gold Standard.

India’s Carbon Market Initiatives

• At COP29 in November 2024, a centralized UN carbon market was approved.
• India announced plans to launch compliance and voluntary carbon markets.
• The National Bank for Agriculture and Rural Development (NABARD) and Indian Council of Agricultural Research (ICAR) have listed five agriculture carbon credit projects with Verra.

Key Principles of Carbon Markets

• Additionality: Credits are issued only if emission reductions occur due to the project, requiring new practices to be adopted.
• Permanence: Benefits, such as carbon storage, must be long-lasting to avoid reversals.

Existing Projects in India

• Over 50 carbon farming projects have been listed in the Verra registry, targeting 1.6 million hectares and aiming to generate 4.7 million credits annually.
• None of these projects have been registered, and farmers have not received payments.

Challenges

• Communication and Training: 45% of farmers reported no communication, and 60% lacked training.
• Financial Incentives: 28% discontinued sustainable practices due to inadequate financial support.
• Payments and Support: 99% of farmers had not received carbon credit payments, leading to dissatisfaction.
• Inclusivity: Projects by startups performed better but were less inclusive of smallholders and marginalized groups.

Recommendations for Improvement

• Higher prices for credits from inclusive projects to encourage participation by smallholders and marginalized groups.
• Regular training, effective communication, and timely payments to ensure participation.
• Collaborations with research institutions to identify suitable interventions and avoid yield penalties.

Advancing Technology and Collaboration

• Improved tools like satellite imagery, drones, and sensors can enhance monitoring and implementation.
• Policymakers, researchers, and private entities must collaborate to ensure transparency, inclusivity, and efficient implementation.