Using Green Credits To Promote Sustainable Agro-Forestry

Green Credits is an incentive framework or a reward-scheme for sustainable, eco-friendly behaviour.

With respect to agriculture and farming, there is already a lot of progress in certain parts of India, like Sikkim which has become ’an almost 100% organic farming state’. By using the standards and practices of sustainable farming methods, one can make adjustments to them based on the local, state-wise or region-specific factors (like crop variety, soil quality, weather, demographics of employment and income, minimum price laws etc.), and award Green Credits based on verified, achievable progresses made on effective use of those updated practices (as determined by the modified metrics of the Green Credit system). However, combining agriculture and farming with forestry becomes extremely integral due to two factors.

Firstly, forest cover in India is lesser, due to unlawful deforestation and lesser protection (as compared to Bhutan or Canada) and has not only led to depletion of forest resources but threatened the livelihood and existence of the already deprived indigenous forest communities. Hence, secondly, poverty alleviation through incentive frameworks is an important objective. This is in addition to the need for more fauna to drastically increase India’s carbon sequestration capacity to bring it closer to carbon neutrality, which Bhutan has already achieved. Therefore Green Credits intervention for afforestation and sustainable agro-forestry can lead to the rise of agro-forestry products, which in turn will promote afforestation and community mobilization behind mass efforts to increase India’s carbon sequestration capacity. This will ultimately also lead to the accumulation of Green Credits (hence poverty alleviation) for communities involved in practicing sustainable agro-forestry, and again bring us close to a just, social foundation, while reducing impact on the planetary thresholds.

While again, the searcher’s approach will definitely aid in creating a just, Green Credit system in India for different contexts where it can be practiced in the realm of agro-forestry, Bhutan’s afforestation incentives (calculated for GNH), Sikkim’s agroforestry policies and Maharashtra’s recent efforts towards incentivizing afforestation using credits can serve as backdrops framing a potential all-encompassing Green Credit system. A 2003 report by the State of the World’s Forest explained that-

“There are three main ways of achieving forest-based poverty alleviation: preventing forest resources from shrinking if they are necessary for maintaining well-being (“protecting the pie”); making forests accessible and redistributing resources and rents (“dividing the pie differently”); and increasing the value of forest production (“enlarging the pie”). All are vital, but they are applied differently, depending on forest use and the strategies adopted.”

The Green Credits system will aim to do the third (“enlarge the pie”) and increase the value of sustainable agro-forest production, by incentivizing communities to make changes on a grass-root level. With the above report elucidating deep interconnections between poverty alleviation and forests, it also enlists some successful payment schemes, similar to the Green Credits system where there is compensation for environmental services such as protection of forests or protection of ecological system to the local indigenous forest communities (like in Colombia, Costa Rica, Ecuador, Brazil), which can be a similar framework adopted in this context. However, while this compensation helps in protecting the pie, the Green Credits offered to indigenous communities in India for protecting forests like Bhutan’s strict protection policies will not increase forest cover in the long run for India, hence strong affirmative action towards afforestation through incentives is required, the best example of which is Maharashtra’s recent efforts.

According to a report in Times of India (Navi Mumbai) last year, a former director of the social forestry department planned to ‘encourage people to plant more trees’, through a plan which awards ‘trade-able credits’ upon planting the tree, which increase with the age of the tree. With a pilot launch in Marathwada which will ultimately spread to other districts, this effort in increasing the carbon sequestration of Maharashtra will plan to award credits to tree-planters and ‘every year, up to five years, 0.2, 0.4, 0.6, 0.8 and 1 credit will be given per tree. At the end of five years, for every tree planted, three credits will be given. While selling the credits, the person will get thrice the rate of trees planted that year. For instance, if that year the cost of planting a tree is Rs 100, the person will get Rs 300 on selling the credits. The government will form a cell in every district, so if a person wants to get enrolled, he will have to make an application, and a team will hold an inspection on the day of planting, and geo-tag the area. A unique code will be generated for each tree, so no one can fudge figures or replace trees.’ While this seems to be an ideal framework for a Green Credit adaptation for afforestation efforts, there still needs to be further research done about determining the value of the credit, making it equitable across income groups and avoiding its misuse in trade, as done by the carbon trading scheme. The Maharashtra scheme also has incentives for polluting industries to put efforts into increasing the carbon sequestration capacity around their region by assessing ‘The kind of pollution the industry is expected to create, and on that basis, the number of credits to be purchased will be fixed. In the initial years, when there may not be many credits in the market, the government proposes to tell these industries to deposit the amount with them, which they will use to purchase tree credits from people or the industry can earn tree credits by planting trees on their premises.’

Therefore in the realm of agro-forestry, there are various quantifiable, measurable ways of implementing the Green Credits system with measurable positive impact, however using the searcher’s approach to adapt it to various contexts and make it equitable still remains extremely integral. 

Anurit Kanti

BW Reporters The author is correspondent at BW Businessworld, he has a keen interest in sustainability and environmental economics