Indian farmers can now trade in carbon credits to boost income

What is the News?

Indian Agricultural Research Institute(IARI) will join hands with a private firm – for the first time, to build a marketplace for trading in carbon credits for farmers in the country.

How much Greenhouse Gas emissions does Indian agriculture emit?

Farming contributes around 14% of the annual greenhouse gas emissions from India. Of this, 55% comes from the livestock sector alone 

As of 2019, CO2 emissions for India were 2.6 billion tonnes. In the recent COP26 summit, India committed to reducing overall carbon emissions by 1 billion tonnes by 2030.

What is Carbon Credit, and how can Carbon Credit trading work in agriculture?

A carbon credit is a tradable permit or certificate that provides the holder of the credit the right to emit one ton of carbon dioxide or an equivalent of another greenhouse gas.

Farmers can claim carbon credits for a host of regenerative agricultural practices such as not burning paddy straw, conservation agriculture such as not ploughing land and laser levelling of land.

For each such practice undertaken, some credits that can be monitored will be generated. They will then be valued in accordance with standard international practices.

Companies that want to lower their carbon footprints, such as fertiliser manufacturers or airlines, but are finding it difficult to do so because of the nature of their business, can step in by directly purchasing carbon credits from farmers using the platform and its high-end technology.

What are the benefits of Carbon Credit trading in agriculture?

Carbon Credit trading is a win-win situation for both farmer and company in multiple ways: 

1) Farmers are paid for adopting healthy agricultural practices that reduce carbon emission, 2) They also benefit the soil, environment and also their own surroundings while at the same time companies can meet their targeted emission norms.

Source: This post is based on the article “Indian farmers can now trade in carbon credits to boost income”  published in Business Standard on 3rd March 2022.