India and Forest Carbon Credits 2008

NEW DELHI: Is there a win-win formula to involve private participation in preserving the country’s green cover? The environment ministry is contending with a proposal to allow private funding into greening of the government-held reserve forests and in return letting them earn carbon credits. Though at a nascent stage, the discussions could lead to a new format to get private funding into the forestry sector that faces a serious cash-crunch. The discussions in the ministry come after government put an end to a far more controversial move to hand over degraded forest lands to private players — predominantly paper and pulp industry — to grow raw material for a share of the revenue earned. The proposal had found little political support with the UPA government. Under the new proposal, the forest department, industry and villagers would be bound into a tripartite agreement allowing private players to use government land to grow their raw material — wood. Besides the charge of handing over public property for private profits, the government was also not keen to draw the flak for leaving thousands of forest-dependent villagers at the mercy of new leaseholders — the industry. The proposal could, officials believe, find a way around inviting private investment and yet not alienate either land from government or people from the land. "Private players can fund, and the forest department can plant, long-growth trees in the reserve forests. In return, the industry can look for revenue out of carbon credits from the plantations, an environment ministry official said. "There is no formal proposal as yet but there has been discussion on some form of agreement where private players can fund plantations not for raw material but for long term improvement of forests. The private players could be given a role for oversight on the areas the plantations are conducted by forest officials, the official explained. While the proposal itself is yet to take any formal shape, the hurdle in getting on with such a revenue model could also arise from the lack of clarity on how carbon credits can be earned from forestry activity. Under an international agreement, any activity in a developing country that cuts down on greenhouse gases can earn carbon credits. These credits can be sold to the richer countries, which have mandatory targets to cut their country emissions but are instead allowed to offset such targets by purchasing credits. Plantations too attract carbon credits because trees absorb carbon dioxide, the key greenhouse gas. But formal, internationally-accepted protocols for credits against plantations are yet to be set up