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Himachal Pradesh becomes first Indian state to sell carbon credits to the World Bank

Himachal Pradesh is the first Indian state to sell carbon credits under the UN-mandated Clean Development Mechanism to the World Bank from new forests to be developed largely on waste ground

Himachal Pradesh has become the first state in India to sign an agreement with the World Bank to secure carbon credits under the Clean Development Mechanism (CDM) project in 11 watershed divisions under the Mid-Himalayan Watershed Development Project.

Under the agreement, the World Bank will buy carbon credits from new forests being developed on degraded land in Himachal Pradesh under a watershed management programme called the Reforestation Project-Improving Livelihood and Watersheds Project. It is being implemented in 177 gram panchayats in 11 watershed divisions. The aim is reforestation in watershed areas, improving livelihoods, and generating carbon revenue for the community.

The bio-carbon CDM project will sequester greenhouse gases by expanding forestry plantations on mostly degraded lands, apart from creating a carbon sink, according to Hubert Nove Josserand, deputy country director of the World Bank.

The CDM agreement is estimated to fetch a carbon revenue of at least Rs 20 crore for the first crediting period of 20 years.

The carbon revenues have been calculated at US$ 5 per tonne of carbon dioxide accumulated in tree biomass, above as well as under the ground.

“The carbon revenue will primarily go to the village community and provide an incentive to protect watershed and forests,” said Rajan Samantraray, World Bank team task leader for the project.

The benefit accruing to the community and private landholders will be about Rs 2,500 per hectare, depending on tree growth and other factors.
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The agreement has been signed for 10 years, ending December 2018.

Including Himachal Pradesh, there are now 18 World Bank-supported carbon revenue programmes happening worldwide. China, Honduras, Kenya and Ethiopia are other countries where CDM projects are underway.

The Indian government is keen to expand such programmes that will trap carbon dioxide in forests and has asked the UN Framework Convention on Climate Change to provide a substantial part of the Rs 90 billion needed every year, for 10 years, for the purpose.

The environment ministry has even set up a cell that is working on how forests across the country should be managed to avail of this advantage. Standards will have to be set, and ways to measure the entrapped carbon and manage the forests will have to be worked out.

However, tribal communities across the world have expressed concerns that the scheme, especially its market-based mechanisms, will end up dictating terms to countries on forest management and bypass the poor who depend on forests for a livelihood. The forests need to be grown and maintained in a particular fashion in order to lock carbon dioxide into the plants and soil better; this may not be to the advantage of forest-dwelling communities.

Source: DNA, May 23, 2011
            www.expressindia.com, May 22, 2011