Using carbon financing initiatives to boost livelihoods

In India, where millions of people depend on agriculture and forests for their livelihoods, there is great potential at the nexus of environmental preservation and economic development. Carbon finance projects, especially those that concentrate on REDD+ (Reducing Emissions from Deforestation and Forest Degradation) and ARR (Afforestation, Reforestation and Revegetation), are becoming increasingly effective tools for achieving the Sustainable Development Goals and mitigating climate change, while also improving the socioeconomic conditions of farmers and communities dependent on forests. These initiatives aid in removing greenhouse gases (GHG) from the atmosphere or stopping their future atmospheric emissions.

Carbon credits are produced by the quantity of CO2 sequestered or the amount of GHG emissions avoided, and these credits may be exchanged on the global market via voluntary carbon platforms. Companies looking to reduce their greenhouse gas emissions may purchase carbon credits produced by these projects via carbon finance, a results-driven system. It may function as a crucial mitigating strategy to counteract the negative effects of climate change.

The ARR method

An important part of the economy, the agriculture industry employs a large number of the labor force and makes up a sizeable chunk of the nation’s GDP (15–25%). It does, however, confront a number of difficulties, including poor productivity, reliance on the monsoon, dispersed landholdings, losses during harvest, and environmental deterioration. By offering carbon financing projects as an alternative source of income via ARR efforts, some of these issues may be resolved while also giving farmers and communities more money.

According to recent study, if legislation, funding, and support are given, the ARR industry has the potential to produce more than 2 billion tons of CO2 equivalent (CO2eq) by 2030. Approximately 86% of farmers in India have landholdings that are less than two hectares, making them small and marginal farmers. Projects based on ARR may be advantageous to them. These initiatives provide real advantages to the surrounding community by providing incentives for tree planting and the regeneration of damaged forests.

Through the sale of carbon credits in the carbon markets, ARR-based carbon financing initiatives may increase farmers’ income while facilitating risk reduction and promoting climate resilience. These programs are intended to include tasks like establishing forests of horticultural and wood species, harvesting timber species, and routinely replacing harvested trees. For these initiatives, farmers who grow trees and practice agroforestry, as well as those who would want to embrace the practice on their own private farmlands and even the huge communal fallow lands, may be considered. Additionally, the initiatives may assist states in their efforts to become carbon neutral.

By taking part in ARR initiatives, farmers may diversify their sources of income while coping with erratic weather patterns and variable crop yields. By incorporating trees into their agricultural landscapes or rehabilitating damaged forest areas, farmers may use carbon sequestration to generate extra income.

REDD+ initiatives

In order for India to meet its Nationally Determined Contribution (NDC) to create an extra carbon sink of 2.5 to 3 billion tons of CO2 equivalent, the forestry industry is essential. There are now 80.9 million hectares of forest and tree cover in India, making up 24.62% of the country’s total land area. Protected Areas (PAs) make up around 5% of the whole land area. The livelihood of almost 50 million people who live close to the PAs depends on forest resources. This reliance takes the form of gathering various non-timber forest products, fuelwood, and feed for habitation and sustenance needs. It has been determined that the PAs in India have the capacity to produce around 10,000,000 carbon credits, which are exchangeable on the carbon market. Therefore, by tackling the underlying causes of deforestation and forest degradation and empowering people who rely on forests, REDD+ efforts go one step further.

REDD+ initiatives are centered on community empowerment and involvement. These programs guarantee that individuals whose livelihoods rely on forests are consulted when making choices about forest management. They do this by acknowledging the rights and traditional knowledge of local communities. By taking part in REDD+, one may get access to global carbon markets where carbon credits or certified emission reductions can be exchanged. The proceeds from the sale of carbon may then be used to improve local communities’ life prospects and to fund community development projects.

Numerous channels enable the registration and execution of these initiatives, providing stakeholders with chances to participate in significant climate action. Gold Standard, Verra, Plan Vivo, Global Carbon Council, Social Carbon, Puro Earth, and American Carbon Registry are a few important registration systems for ARR and REDD+ initiatives.

Utilizing carbon financing initiatives has enormous potential to promote poverty reduction and sustainable development. These programs lessen climate change and enhance the lives of farmers and communities that rely on forests by using the potential of environmental protection to provide economic possibilities. Investing in carbon financing projects becomes essential for fostering resilience and prosperity at the local level as India moves on with its transition to a greener and more equitable future.

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