Engaging the Private Sector in Forest Carbon Management in India

This article reflects on pathways, building on the Chinese model, for creative involvement of private business in CO2 sequestration through forest vegetation. 

At the recently concluded UNFCCC convention at Doha, countries were conscious of the devastation that the climate change is already bringing in its wake even though incontrovertible scientific proof is not yet officially available. May 2012 was the warmest month of May ever recorded in the northern hemisphere in the 150 years history of recorded climatic observations even as it was also the consecutive 327th month in which the global temperature exceeded the average temperature for the same month in the previous century . The UNFCCC Conference of 2009 at Copenhagen, often described as a failure, recognized the scientific view that the increase in temperature should be limited to below 20 Celsius under the Copenhagen Accord. The 2011 Conference at Durban sought ambitious targets from developed countries and mandatory mitigating action by all countries, including developing countries, in order to limit the temperature rise below this threshold and Doha, for all its limitations, atleast managed to re-emphasize the same . 

But even if all developed countries and the emerging economies were to scrupulously follow their Copenhagen greenhouse gas emission reduction commitments it would still not be possible to keep global warming within the 20 Celsius threshold. Sources of emissions have changed drastically with China being the overwhelmingly largest emitter in absolute terms. Even its per capita emissions are now 7.2 tons of CO2e, and rising compared to 7.5 tons of EU characterized by a clearly decreasing trend. Emissions from India, Malaysia, Thailand, Indonesia, Nigeria, Ghana, Brazil and many others are also increasing . Latest modelling assessments suggest that the fast growth of emissions in the world in the recent years may have already led to a trajectory that would inexorably take the warming to a minimum of 2.40 Celsius above the pre-industrial age levels .

Under these circumstances the only real option of keeping within 20 Celsius threshold is to remove CO2 from atmosphere in addition to intensified emission reduction measures.  While a number of technological options are available for carbon dioxide sequestration, namely, pumping CO2 in the geological crevices emptied of petroleum and other mines, and chemical bonding of atmospheric CO2 with other molecules but these are not only highly energy intensive and exorbitantly costly but also create environmental concerns of their own. Carbon sequestration through photosynthesis in forest vegetation, on the other hand, provides the environmentally safest option along with mostly positive socio-economic consequences.

India’s National Climate Change Action Plan places priority on forestry based climate change mitigation process and one of its eight missions is the National Green India Mission that is responsible for the planning and implementation of climate change mitigation in forests and trees outside forests across India. The Mission acknowledges the role of forests in enhancing food and water security, conservation of biodiversity and livelihood security of forest fringe communities and has adopted an approach which places equal emphasis on these values along with mitigation of climate change and adaptation to it. The expected output of the Mission by 2020 is qualitative improvement of forest cover and ecosystems over 5 million ha and creating new forest and tree cover over another 5 million ha of scrub, mangroves, ravines, cold desert, shifting cultivation areas, abandoned mining area, urban and peri-urban lands including 3 million ha of agro-forestry, farm forestry and social forestry on non-forest lands. This is expected to result in enhanced annual CO2 sequestration of 50-60 million tonnes by the year 2020, a rather modest target given India’s size and opportunities .

But this task can not be undertaken by the state forest departments alone given their limited human resources, technical capacities and fund availability. The involvement of forest fringe communities through the process of Joint Forest Management Committees does enhance their human resources significantly in districts where the employment opportunities for people in non-forestry activities are minimal and they are willing to work in forestry activities. This is usually restricted to tribal dominated areas because elsewhere not only job opportunities in other sectors are more but people with willingness and ability to work in forests are also less numerous. And, in any case, technical capacities and fund availability with the government forestry apparatus are not enhanced by community participation.

Business, therefore, must get involved if even these modest targets under the National Green India Mission are to be reached in time. In the past there have been many attempts by businesses to get involved in raising tree plantations but it was essentially centred around seeking government forest lands on long leases, a demand which met with fierce resistance from civil society and state governments as a step designed to disempower the poorest of the poor dependent upon the forest lands for their basic livelihood. The political economy of India would just not allow businesses to lease forest lands for long terms for raising tree plantations. Entrepreneurs keen to set businesses in the area of forest based climate mitigation must, therefore, skirt around this approach of control over forest lands and seek alternate entry points. 

Chinese experiences

The evolving Chinese domestic carbon market may provide some clues as to what can possibly be done. 

Presently the regional pilots are in the design phase and by 2014 regional carbon trading is expected to become operational. A National carbon emission trading system as also carbon cap and carbon tax regimes to spur it on are likely to be established in China by 2016 and it is expected that it would be mandatory to fulfil a part of the demand for carbon credits from forestry sequestration projects. 

While a sophisticated Chinese domestic carbon market is still in the making, the likely opportunities for entrepreneurs are becoming clearer. In the forestry part of this market, there are business opportunities in consolidation of carbon credit demand by millions of small and medium greenhouse gas emitting industries and arranging supplies, planning of forest carbon projects, raising and supplying high quality planting stock, outsourcing of forest and plantation management, carbon monitoring, reporting and verification activities, carbon project auditing, and trading of carbon credits among others.

The Chinese Government has promoted the China Green Carbon Foundation, a Public-Private Not-for-Profit initiative for hastening up the adoption of good practices and standardization of carbon market in the country. This Foundation seeks to combat climate change by sequestering increasingly larger amounts of atmospheric carbon dioxide through afforestation, forest management, decreasing deforestation and other similar activities associated with increasing carbon sink and reducing emissions. It aims at setting standards for carbon sink and biodiversity projects and for monitoring, verification, certification and ecological compensation and is helping private businesses develop their capacities for playing their role in the domestic carbon trade.

Lessons for India

As one of the emerging economies India would also need to develop a coherent strategy for reducing its carbon footprints much more steeply than it has done so far and just as in China 

It is clear that the top-down approach to reducing carbon emission would only be effective up to a point. A wiser and long lasting approach would need to engage a larger cross section of businesses and people. India already has a fledgling domestic market in the Renewable Energy Certificates. A similar market should also be developed for forest based carbon credits the demand for which would have to be created by instituting emission caps and ensuring through regulations that a part of the demand is met mandatorily from carbon credits generated from activities that sequester atmospheric CO2. The next step would be to enable the private sector to play wide ranging role in providing the supply of carbon credits. The private sector could be encouraged to undertake project  planning of forest carbon projects, preparing Project design Documents and getting them approved, supplying high quality planting stock, managing forest plantations, undertaking monitoring, reporting and verification activities, auditing carbon project and trading in carbon credits. 

The need is to develop business models which do not entail ownership of large extents of government and community lands, or even private lands. For shorter duration crops like Casuarina grown for charcoal production in the coastal belt, arrangements similar to contract farming for potato already in practice in India by some food and beverages multinationals may provide a good starting point.

Large Pension Funds in Europe have also shown interest in investing in such plantations across India. These Funds, which have to ensure safety of their investments above profits and have low capacity for risks, would find it easier to invest if public sector corporations in forestry sector like the state forest development corporations form Special Purpose Vehicles with reputed private sector companies for this purpose.

It would be greatly helpful if the Government of India is able to create a Public-Private organization like the China Green Carbon Foundation with the specific purpose of creating avenues for the private sector to contribute to climate change mitigation.

Dr. Promode Kant is the Director of Institute of Green Economy, New Delhi. He is also the foundation member of FAO’s Asia Pacific Forest Policy Think Tank. 

Dr. Wu Shuirong is the Director of Research Centre for Forest Policy on Climate Change in the Chinese Academy of Forestry, Beijing. 

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Rennett Stowe