Carbon and agriculture

After the Paris Agreement, companies are increasingly committed to helping stop climate change by reducing their greenhouse gas emissions as much as possible. Yet many companies are finding that they cannot completely eliminate their emissions, or even reduce them as quickly as they would like. For companies that are committed to achieving carbon neutrality, the use of carbon credits will be very important to offset emissions that they cannot get rid of by other means.

The carbon credit market could be worth more than $50 billion in 2030. Indian small-scale agriculture can generate large numbers of carbon credits and supply global markets; however, this would require significant up-front investments and focused efforts on the ground. Private investment flows into carbon credit generation projects in Indian agriculture can not only help the country improve the local environment, but also put substantial funds into the hands of Indian farmers, supporting the promise of Prime minister to increase farmers’ incomes.

To attract private investment and effort, it would be important to have a well-defined and conducive policy framework that would ensure: * Security of capital and the investor’s legal property rights over the carbon assets generated by such projects. This would mean ensuring that these carbon assets are kept outside the scope of Nationally Determined Contributions (NDCs) or allow corresponding adjustments in the event of cross-border transactions. * Open access to international voluntary carbon markets for carbon credits generated by these private projects to help monetize efforts, ensure optimal price discovery and liquidity, and therefore the ability to pass on more benefits to farmers.

India cultivates paddy on about 44 million hectares, with transplanting being the predominant cultivation practice. Methane emissions from rice paddies, where the land sits in standing water up to a foot deep throughout the season, are the highest in cropland and the second-highest source in agriculture, surpassed only by enteric fermentation emissions in livestock. The amount of methane emitted by rice fields is strongly linked to the practices (flooding and fertilization) applied by rice farmers.

Encouraging rice farmers to adopt more water-efficient practices such as no-till rice (DSR) and alternate wetting and drying (AWD) reduces methane emissions, water use and improves crop health. floors. It reduces the cost of cultivation and improves the profitability of farmers. It also creates an additional source of income for the farmers as compensation for the carbon credits generated by the change in cultivation practice and is in line with the GOI’s farmer improvement mission.

The problem of paddy stubble burning in Haryana and Punjab can also be alleviated by inducing farmers through carbon credits to stop following this highly polluting practice. Sugarcane growers can also benefit from switching to water-saving and environmentally friendly techniques. Stimulating private investment in such projects can help the country solve multiple problems such as excessive water consumption, electricity consumption, deteriorating soil quality as well as reducing GHG emissions and pollution. improved income/profitability of farmers.

The Paris Agreement requires all ratifying Parties to communicate a NDC (Nationally Determined Contribution). NDCs are documents reflecting the commitments made by each country, describing their mitigation and adaptation objectives, under the agreement. They include targets, measures and policies and form the basis of national climate action plans. The NDCs will be updated every five years to close the gap with the Paris temperature targets. India is a fast growing economy.

It is also the world’s third largest energy consumer and greenhouse gas (GHG) emitter, although its per capita and historical emissions are low. India submitted its Intended Nationally Determined Contribution (INDC), now NDC, after the signing of the Paris Agreement, to the UNFCCC in October 2015.

India’s first NDC for the period 2021 to 2030 focuses on three priority areas: * Reduce the emissions intensity of its GDP by 33-35% by 2030 compared to 2005 levels. * Achieve by 2030 an installed capacity of approximately 40% of cumulative electrical energy from non-fossil energy resources thanks to technology transfer and low-cost international financing, notably from the Green Climate Fund (GCF). * Create an additional carbon sink of 2.5 to 3 billion tonnes of CO2 equivalent through additional forest and tree cover by 2030. Specific sector goals outside of energy and forestry are not specified in the Indian CDN.

However, various sectors are mentioned in the NDCs for mitigation and adaptation strategies such as energy, industry, transport, agriculture, forestry, waste, etc. large numbers, train them, guide them on climate-smart farming practices, manage the MRV (monitoring, review and verification mechanism) on each small farm, generate carbon credits and incentivize each participating farmer in a timely manner.

Such a time-consuming and resource-intensive activity should ideally be left to the private sector as the machinery of government may not be able to focus on these agricultural micro-units and follow all the necessary processes meticulously. A double claim occurs when two different parties claim the same emission reduction/removal/mitigation outcome. In the context of the Paris Agreement, this can occur when the host government of a project claims the result vis-à-vis its NDC and at the same time another country (for its own NDC) or an entity for a specific carbon reduction project claims it. This effectively means that an emissions reduction/removal occurs once, but is claimed twice.

The main safeguard established under the Paris Agreement to avoid double claims is the “matching adjustment”, under which a country transferring a mitigation result must adjust its emissions balance sheet to reflect the transfer and, in cases where the user of the result is another country, they must make a corresponding adjustment to their emissions balance sheet to reflect the use. If the government of a country from its national inventory does not exclude the benefits created by a specific carbon sequestration project, this represents a double claim situation.

Some carbon standards such as Gold Standard require a statement/clarification from the government proving such an adjustment. Due to environmental integrity, the host country may forego claiming the emission reduction/removal outcome of a voluntary market project by applying a corresponding adjustment to reporting its progress towards achieving its NDC, so that the level of effort required to achieve its targets remains unchanged.

Without a clear policy on carbon accounting, especially on double claiming, private and international investment in carbon capture projects could slow. It is proposed that the government authorize projects in agriculture, involving private investment, for use by any international mitigation objective, with the corresponding adjustment. This will help to get the best possible price for these generated carbon credits, making the projects viable and benefiting the farmers. Indian farmers can greatly benefit from the growing demand for voluntary carbon credits.

India has 44 million hectares of area under rice cultivation. Transplanted paddy rice is one of the major sources of methane, accounting for about 8-10% of global anthropogenic methane emissions. Transplanted paddy rice is also very water-intensive. It takes about 3,000 to 4,000 liters of water to produce one kg of rice. It also means a significant amount of electricity consumption for pumping water. Conversion of transplanted paddy rice to direct seeded rice (DSR) or alternate wetting and drying (AWD) techniques can lead to a reduction of around 2 tCO2e/hectare/season, reduce water consumption by 30-40% and improve the profitability of farmers by around Rs 8,000 to 10,000 per hectare per season.

Government can save on electricity and water subsidies as farmers switch to DSR and AWD. Funds to train farmers in DSR and AWD techniques + additional cash incentives can be generated through international voluntary carbon markets. However, this involves significant initial investment and on-the-ground effort.

The private sector can play a facilitating role: * If the government creates an enabling policy framework for private investment in the generation of carbon credits from smallholder agricultural projects. * Assures investors that carbon credits generated by smallholder agriculture projects will not be nationalized or included in the NDC * Removes policy barriers, if any, to international transactions of voluntary carbon credits generated by smallholder agriculture * Develops a process for registering agricultural carbon credit generation projects and authorizing/licensing them with the necessary documentary approvals to trade in international markets. Activate the necessary corresponding adjustments in the NDC.

(The author is the Head of Environment Committee, PHD Chambers of Commerce and Industry, New Delhi and can be contacted at [email protected])

About Catriona

Check Also

Considerations for Margin Protection Insurance Policies

Kent Thiesse | Farm Management Analyst A relatively new crop insurance option that has been …