Economics of planting trees for carbon credits in India

[Praveen Choudary]

Hi All,   I want to know about the Economics of planting trees for carbon credits in India. If anybody in this group has any idea please let me know. 1. Are there any forestation projects done in India for carbon credits. 2. Is planting trees for carbon credits economically viable. 3. Is there any restriction on the type of trees that should be planted. 4. Per tree how much carbon credit can we gain per year. Thanks, Praveen.

[Shobhit Goel]

Currently there are no registered afforestation projects in India.
Only one is registered in China. See UNFCCC website for details.
Typical 5 CERs are issued per hectare of afforestation project. Yes
there is restriction in terms of additionality for afforestation
project.
It is not that economical in India unless you have hudreds of acres
of barren land. Typically any CDM project is economical if number of
credits issued are more than 3000 annually.

Regards,
Shobhit Goel
Analyst - HSBC
+91-9916130250

[bhaska...@gmail.com]

Growing Algae in water is similar to planting trees.
Its cheaper and more effective.
It may not always be eligible for carbon credits since algae have a
very short life of a few days.
Please contact me for more details.

best regards

Bhaskar
www.kadambari.net

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[Swapan Mehra]

Dear All,
Forestry remains the only viable Carbon Sink eligible to earn Carbon Credits Globally. It definitely has potential. However project movement and methodology movement within the Clean Development Mechanism (CDM) has been slow because of the inherent complexities of Forestry including Monitoring, Upkeep and Leakage (Plantations Failing).

As stated in the mail below, typically per hectare you can get a yield of 4-8 Carbon Credits (Approx Rs.1500). (It has also been shown to be higher for some fast growing tree species).

By design, it suits the Indian forestry system (dominated by farm forestry and community based forestry) where this additional income can serve as an incentive for preserving the plantation. Also it is possible to harvest the plantation in a sustainable manner and also remove minor products like fruits leaves.

The Carbon Registration Process with the UN authorities (CDM EB) takes time and also has an associated transaction cost. There are estimates which show that a project would only justify this cost if the land planted is in excess of 1000 Hectares.

There are some project endeavors by big paper and we should hopefully soon have the first forestry project registered from India.

We can try more of these projects through co-operatives etc.

In case anyone would like to discuss more, feel free to contact me.

Regards,
Swapan Mehra
General Manager, Climate Solutions,
AES India

Ph: 09810341115

www.aes.com

[Manu Sharma]

On Mon, Jan 19, 2009 at 5:14 PM, Swapan Mehra <swapa...@gmail.com> wrote:

The Carbon Registration Process with the UN authorities (CDM EB) takes time [...] we should hopefully soon have the first forestry project registered from India. 

Forests remain the cheapest carbon sinks but I hope they do not come under the purview of CDM as that would ensure that all forest related carbon reductions made in developing countries are sold off to to the developed world to sustain their continuing emissions. That would be a tragedy. 

Since re-forestation and prevention of de-forestation are already such inexpensive ways to mitigate carbon, these activities do not need any incentives. 

The govt already has plans in this direction. A story from today's Hindustan Times...

Govt plans major green drive
Mon, Jan 19 12:14 AM

The Planning Commission has approved an ambitious scheme to plant forests in 2.42 lakh village panchayats to achieve the target of covering 33 percent of India's geographical area with trees. The latest Forest Survey of India report states that only 23 per cent of the country's land was covered by trees as per surveys in 2007.

Since 2003, the forest cover has increased by about three percent but the real concern is that dense forest cover is actually falling. In a bid to arrest this trend, the Environment ministry had proposed a Central scheme of Rs 890 crore to have a 'rich forest' in each panchayat by 2012.

The Van Panchayat Yojna is, in fact, a revival of an ancient Indian concept of sacred groves in each village which acted as a barrier for warm winds and supplied essential medicinal extracts to villagers. The yojana will have two components - one involving villagers and the other the corporate world.

Under the first component, panchayats will identify land for planting trees and will be responsible for ensuring that the trees survive. In return, the villagers will get right to use minor produce from the forests.

Through the second component the government wants to involve the corporate world. "There are huge chunks of waste land available which the corporate world can be given for developing", said an environment ministry official.

The scheme received the Planning Commission's approval on January 11 and will be introduced in the Cabinet soon.

Thanks,

Manu