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India’s Agroforestry Potential and Carbon Finance Integration
Context:
India has vast potential in the agroforestry sector, offering a unique opportunity to integrate with carbon finance projects through Afforestation, Reforestation, and Revegetation (ARR) initiatives.
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- The current agroforestry coverage of 28.4 million hectares could expand to 53 million hectares by 2050.
- Agroforestry, accounting for 8.65% of India’s total land area, contributes 19.3% to the country’s carbon stocks, playing a crucial role in environmental sustainability and economic growth.
- Research suggests that with proper policies, financial support, and incentives, agroforestry could contribute an additional carbon sink of over 2.5 billion tons of CO2 equivalent by 2030.
Agroforestry
It is a sustainable land management approach that integrates trees and shrubs with crops and/or livestock on the same piece of land. This method aims to optimise the interactions between these components to enhance productivity, improve environmental health, and provide economic benefits.
Key Features of Agroforestry
- Intentional Integration: Agroforestry involves deliberately combining trees with agricultural crops and livestock, creating a holistic management system rather than treating each component separately.
- Intensive Management: These systems require careful management to maintain their productive and protective functions, often involving practices such as cultivation, fertilisation, and irrigation.
- Ecological Interactions: Agroforestry seeks to maximise positive interactions (like mutualism) while minimising negative ones (such as competition for resources) among the various components.
Benefits of Agroforestry
- Economic Advantages: By integrating multiple products (crops, timber, fodder), agroforestry can increase overall farm profitability. The total output per unit area is often greater than that from monoculture systems.
- Environmental Sustainability: Agroforestry helps in soil conservation, reduces erosion, enhances biodiversity, and improves water quality by filtering runoff. Trees can also sequester carbon, contributing to climate change mitigation.
- Improved Soil Health: The presence of trees enhances soil structure and nutrient cycling, leading to healthier soils that support crop production.
- Biodiversity Enhancement: Agroforestry systems create habitats for various species, promoting biodiversity both above and below ground.
- Resilience to Climate Change: By diversifying production systems, agroforestry can help farms adapt to changing climate conditions and reduce risks associated with crop failures.
The “Common Practice” Challenge in Carbon Standards
- In carbon finance, the “common practice” criterion assesses whether a project provides additional environmental benefits beyond standard practices.
- For ARR projects, this involves evaluating whether similar activities are already common in the region.
- Carbon standards like Verra’s Verified Carbon Standard (VCS) and the Gold Standard may deny credits to activities deemed “common practice” as they are not considered additional.
- However, these global standards are often designed for large-scale agricultural systems seen in regions like Latin America or the United States, where landholdings are extensive.
- In contrast, India is characterised by small, fragmented landholdings—86.1% of Indian farmers are small and marginal, with landholdings under two hectares.
- Their agroforestry practices are often scattered and informal, which may not meet the additional criteria under current carbon standards.
- This creates a significant barrier, excluding many Indian farmers from participating in ARR carbon finance projects and missing out on potential income from carbon credits.
Need for India-Centric Carbon Standards:
- India’s unique agricultural landscape requires a redefinition of the “common practice” criterion to better reflect the realities of its agroforestry sector.
- Even small improvements in land management, like adopting systematic agroforestry techniques, can have transformative impacts.
- Revising carbon standards to account for India’s smallholder model would unlock the vast potential for carbon sequestration, allowing more farmers to participate in carbon finance projects.
Significance:
- Adopting an India-centric approach in carbon credit platforms would incentivise systematic agroforestry, enhancing both environmental sustainability and rural livelihoods.
- ARR projects, integrated with agroforestry, provide alternative income streams for farmers while addressing challenges like low productivity, monsoon dependence, and environmental degradation.
- These projects help diversify income by promoting tree planting and forest restoration, allowing farmers to earn through carbon sequestration.
- Additionally, ARR initiatives offer environmental benefits such as improved soil fertility, water retention, and erosion control, boosting long-term agricultural productivity.
Supporting Small and Marginal Farmers:
- Institutes like The Energy and Resources Institute (TERI) have already demonstrated the potential of ARR projects in India, with 19 projects across seven states benefiting over 56,600 farmers.
- However, scaling these initiatives requires international carbon finance platforms to revise their standards to align with India’s agricultural realities.
- As India seeks to expand its agroforestry sector, it is essential for international carbon standards to evolve to reflect the specific conditions of the Indian subcontinent.
- Revising the “common practice” guidelines to include Indian agroforestry practices would allow millions of small and marginal farmers to participate in ARR projects.
- This would not only drive sustainable development but also provide much-needed income support to rural households, enhancing the country’s overall economic and environmental resilience.
- Carbon credit platforms like Verra and Gold Standard must recognise the need for India-centric standards to fully realise the potential of agroforestry and ARR initiatives. Doing so will pave the way for a greener, more sustainable, and economically prosperous future for India’s farmers.
