Carbon Markets and Their Potential in Agriculture
Carbon markets can transform Indian agriculture by turning sustainable farming practices into a profitable opportunity.
Carbon pricing helps mitigate climate change by setting emission limits for businesses, which can buy carbon credits from projects that reduce greenhouse gas emissions.
India is working on launching both compliance and voluntary carbon markets for agriculture, which could significantly benefit farmers.
How Carbon Markets Work
Compliance markets are regulated by governments or international bodies (e.g., UN), imposing emission caps on companies.
Companies exceeding these caps must buy carbon credits or pay a tax.
Voluntary markets are not regulated and allow organizations to trade carbon credits via mechanisms like the Clean Development Mechanism, Verra and Gold Standard, among others
Key principles of carbon markets:
Additionality: Carbon credits are only given when farmers adopt new, sustainable practices.
Permanence: Ensures that environmental benefits, like carbon stored in soils, are maintained over time.
Challenges in India's Carbon Farming Projects
Over 50 agriculture carbon projects have been listed in Verra, targeting 1.6 million hectares, but carbon credits haven’t been issued, leaving farmers without payment.
Small farmers, especially from SC/ST groups, are largely excluded from projects.
Women are also underrepresented (only 4% of participants).
Many farmers report lack of communication, training, and financial incentives. Some stopped sustainable practices due to insufficient rewards.
Despite the adoption of practices like zero tillage and tree planting, 28% of farmers stopped these practices after 2 years, primarily due to lack of financial support.
Improving Carbon Markets in India
To improve farmer participation, carbon market projects must be socially inclusive, focusing on smallholders and marginalised communities.
Incentives like higher prices for carbon credits from inclusive projects and timely payments are essential for success.
Technological improvements in soil carbon measurement, including remote sensing, satellite imagery, and drones, can enhance project monitoring.
Successful implementation requires collaboration between policymakers, researchers, and private entities to ensure inclusivity, transparency, and effective rewards for farmers.
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