Leverage agroforestry for carbon markets

Incentivise people for nature-based solutions such as community-led biodiversity conservation, agroforestry plantations, etc, where carbon and biodiversity credits can be generated and traded

Leverage agroforestry for carbon markets
Though the large emitters of GHGs are known, many countries still remain reluctant to accept targets that meaningfully reduce emissions.

By Yogesh Gokhale & JV Sharma

With no country spared the effects of climate change, we are left with no alternative other than reducing emissions of greenhouse gases (GHG). Though the large emitters of GHGs are known, many countries still remain reluctant to accept targets that meaningfully reduce emissions.

On the other hand, the immense opportunity to combat climate-change effects through investments in mitigation and adaptation continues to be undervalued. Nature-based Solutions (NbS) such as agroforestry plantations and climate-smart agriculture can play a pivotal role in mitigating and offering solutions to climate-change problems. India is well placed to tap this potential through carbon sequestration credits and biodiversity conservation credits.

Local communities in India have long been practicing NbS, not only against climate change but also for natural resource management through respective traditions and customs. But, without the support of incentives or investment, such systems are eroding fast.

There are more than 200,000 sacred groves in India. These ‘forests of faith’ have been conserved traditionally by local communities for centuries, in mountains as well as watershed catchments. These are also treasure troves of biodiversity. However, compounding demands on land for economic aspirations have threatened these traditions across India. Similarly, the barah anaja multi-cropping farming system in Uttarakhand, in which different kinds of grains are sown at the same time, offers an opportunity to adapt to climate change and ensure food security.

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The country’s agroforestry plantations play a key role in stabilising its forest and tree cover, estimated at about 24% of its area. Over 25 million hectares (mha) in the country are under the agroforestry system. Timber-growing agroforestry systems fulfil more than 80% of the domestic timber demand. India imports about 15-20% of its timber requirement, and that costs us more than Rs 40,000 crore annually.

Over 159 mha can be potentially developed under agroforestry. There are over 200 mha categorised as Culturable Non-forest Area (CNFA) by the Forest Survey of India, which can be potentially used to grow timber and satisfy domestic and global timber demand. There has been a growing acceptance of timber in the construction sector, considering its effectiveness in tackling the impacts of climate change. The cyclical agroforestry of growing clonal timber species sequesters carbon in a substantially higher proportion in comparison to conventionally grown seed-based timber farming. The timber from agroforestry further locks the sequestered carbon in the form of furniture for over 30 years. This makes agroforestry an NbS for carbon capture and storage, which otherwise happens at a cost of over $50 per tonne of CO2 equivalent.

The paper industry in India imports over Rs 20,000 crore worth of pulp and other paper products annually. Additional area under agroforestry can help the domestic paper industry and also add to the potential of carbon sequestration.

The international carbon markets’ (mandated and voluntary) standards of certification of natural resources such as forests can efficiently link carbon emitters and sequesterers and offer incentives to farmers and local communities. Working on the “polluter pays” principle, carbon markets have become the instruments to reduce carbon and ecological footprints for corporates across the globe. The expiry of the Kyoto Protocol has provided many opportunities for the voluntary markets to evolve, and there are specialised standards and markets catering to Payment of Ecosystem Services (PES), carbon credits as well as biodiversity credits. These markets have been growing over the past 30 years, and in 2021, the overall global carbon market was valued at $851 billion. Similarly, the voluntary market’s value soared to $1 billion, a clear indication of the general acceptance of these markets.

Despite the enthusiasm to recognise carbon sequestration and biodiversity conservation efforts by global corporates, biodiversity-rich India remains largely a non-participant and in denial when it comes to carbon markets and trade. The NbS such as sacred groves and other community-based biodiversity conservation, agroforestry plantations, and climate-smart agriculture are some of the potential areas where carbon and biodiversity credits can be generated and traded by incentivising local people.

Under the Paris Climate Agreement in 2015, India committed to sequester an additional 2.5-3 BtCO2e by 2030 as one of its NDCs (Nationally Determined Contributions). The Forest Survey of India has modelled scenarios till 2030 based on different baseline years, according to which, considering 2005 as the base year, India overachieves its forestry NDC by 1.25 BtCO2e (if the target is 2.5 BtCO2e) or by 0.75 BtCO2e (if the target is 3 BtCO2e) of carbon sequestration.

This fact needs to be strengthened with policy decisions, considering the overarching benefits to not only carbon and biodiversity credit markets but also keeping in mind the likely investments to happen in agroforestry sector and associated industries. Enhancing agroforestry plantations will only boost the government initiative of ‘Doubling Farmer’s Income’. Most of the Trees Outside Forest Areas considered in the State of Forests Report cover areas more than 1 hectare, whereas maximum agroforestry is practiced by small-holder farmers having landholding of less than 1 hectare in size.

Farmers and local communities should not be denied the opportunity to gain from the global trade of carbon and biodiversity credits.

Respectively, senior fellow, and senior director, The Energy and Resources Institute (TERI)

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