How 'Framework for Voluntary Carbon Market' Will Benefit India?

The country's living environment is being harmed by modern Indian agriculture, which not only releases greenhouse gases into the atmosphere but also pollutes the air and depletes water supplies. Moreover, an uneven and overabundance of fertilizer application may lower agricultural output and ultimately jeopardize the nation's food security. Thankfully, carbon farming has the potential to address each of these issues. Given its large agricultural area and ample potential for environmental enhancement, India is expected to emerge as the primary hub for carbon farming credits in the coming years.

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HARSHAL SONAWANE, Head of Sustainability, nurture.farm

Agriculture contributes to 18 percent of Greenhouse gases (GHG) emissions, 70 percent of freshwater withdrawals, up to 45 percent of methane emissions, and 80 percent of Nitrous oxide emissions. With more than 50 percent of the country's population dependent on agriculture to earn their livelihoods, the number may only come down if drastic measures are taken to change how we cultivate and farm.

In the last 30 - 50 years, we have seen an increase in average global temperatures to 1.2 degrees Celsius above pre-industrial levels. We are witnessing abnormal weather events like floods, heat waves, increased sea levels, inconsistent rainfalls, and more across the globe.

Making agriculture sustainable by incentivising farmers to adopt climate-smart practices and investing in precision farming infrastructure can go a long way to help farmers grow more from less and mitigate climate change.

Before we dive deep into the carbon markets and their size, it is essential to understand the different types of carbon markets and clearly understand carbon credits. There are two types of carbon markets namely:

Compliance Market:

The compliance market is used by companies and governments that are legally required to account for their GHG emissions. Mandatory national, regional, or international carbon reduction regimes regulate it.

Voluntary Carbon Markets:

Voluntary carbon markets allow carbon emitters to offset their emissions by purchasing carbon credits emitted by projects that aim to remove or reduce greenhouse gases from the atmosphere.

What are carbon credits?