Thursday, 15 August 2024.
After posts about Malaysia, China and Indonesia, today we post about another relevant carbon credit market in Asia.
As you know, India is currently the most populous country in the World with 1.4 billion people.
The agriculture sector represents 18.6% of India GDP and 54.6% of the country's workforce. This is according to a press release from the Ministry of Agriculture & Farmers Welfare from India, on purpose of the launch of a Framework for Voluntary Carbon Market in Agriculture Sector, that we will further detail below
But before we start by quoting the Bureau of Energy Efficiency (BEE) from the Ministry of Power from India.
“Globally, carbon pricing instruments are essential tools in the fight against climate change. These instruments can be categorized into two main types: compliance mechanisms and voluntary mechanisms. Compliance mechanisms, such as Emissions Trading Systems (ETS), are typically implemented and managed by governments. They set a cap on emissions and allow entities to trade emission allowances to meet their targets. Voluntary mechanisms, on the other hand, are often managed by independent standards or non-governmental organizations and enable entities to voluntarily offset their emissions by purchasing carbon credits from projects that reduce or remove GHG emissions. In some of the countries such as China, South Korea, Australia and Japan, there is also government operated voluntary mechanisms.”
Initially called Carbon Credit Trading Scheme (CCTS), the "Principal Scheme” framework for the Indian Carbon Market (ICM) was finalized in June 2023.
In parallel to CCTS developments, draft rules were also proposed for a separate Green Credit Program, whereby green credits could come from activities such as sustainable agriculture, forestry, waste management, building construction and water management practices.
"Green Credit Program is an innovative market-based mechanism designed to incentivize voluntary environmental actions across diverse sectors, by various stakeholders ... To obtain Green Credits, individuals and entities must register their activities through the central government's dedicated app/website. The Administrator will verify the activity through a designated agency, with self-verification for small projects. Once verification is complete, the Administrator will grant a Green Credit certificate which will be tradable on the green credit platform". Click here to read more.
Right after COP-28 in Dubai, India's Ministry of Power requested some changes to BEE, the carbon credits administrator. Besides being tasked with both “validation” and “verification” of carbon credits, as opposed to only “verification”, BEE was requested to develop own standards.
This means that Indian entities will no longer have to rely on overseas standards agencies for validating their carbon credits. This move will reduce costs and time associated with overseas certification, making it more convenient for Indian carbon credit generators and domestic trading. Full details here.
A few weeks later, it was the Ministry of Agriculture & Farmers Welfare that launched the Framework for Voluntary Carbon Market in Agriculture Sector. Click here for the full article and in the sequence to download the 68-pages document.
According to the framework, modern times require moving beyond the thinking of merely increasing "yield per hectare" and instead adopt sustainable practices that not only increase farmer incomes but also promote social equity and environmental management.
Click at the image below for a summary of programes in India related to carbon market, with a governance perspective.
Agriculture in India is highly vulnerable to climate change with about 50% cultivated areas under rain-feed conditions.
In that sense, needless to emphasize the growing protagonism India in the World these days.
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