Carbon credit plans must factor in water security

Despite 29 years of climate crisis talks, finance remains the key bottleneck for large-scale action, as multilateral treaties fail to institutionalise funding support.

- Anuja Malhotra Abi T Vanak

India has maintained the principle of a "common, but differentiated responsibility", allowing developing countries more carbon emission leeway to meet their development needs, while the developed world draws down its emissions and financially supports the Global South in reducing emissions. However, Global North countries have consistently resisted owning up to their responsibilities.

At the heart of this imbroglio is a tug-of-war between the developed countries' view of the climate crisis as requiring a grand set of solutions and developing countries' view that it needs local solutions. One finance tool that has gained attention is a global market for carbon credits. Carbon credits are permits or certificates that allow the holder to emit a certain amount of greenhouse gases, with one credit typically representing one tonne of carbon dioxide equivalent.

When carbon credits are earned through replenishing, regenerating, or managing natural resources, they are referred to as nature-based carbon credits. One of the most popular ways of earning such carbon credits is through tree plantation programmes. The assumption here is that trees will sequester carbon over their lifetime and provide other ecosystem benefits. This seems almost too good to be true, and actually is. Carbon credits create a local problem: Trees require more than carbon to grow; they also need water.