An Analysis of Carbon Market and Carbon Credits in India

Abstract

Global climate change is becoming an alarming problem of the 21st century, with global warming as the biggest challenge. Anthropogenic activities have added significant quantities of greenhouse gases (GHGs) to the atmosphere ever since the Industrial Revolution. The agriculture sector is a significant source of GHG emission in many countries. Crop stubble burning or agricultural biomass burning is one of the highest contributors to this emission. In India, around 92 million tons of crop residue is burned every year, causing several negative impacts on the climate as well as on human health. Under the Kyoto Protocol, Carbon trading and Clean Development Mechanism (CDM) are the two robust processes to mitigate the GHG emissions for any country. In this study, we have assessed the overview of world’s carbon market and analysed how much carbon credit India may have traded in the world carbon market, if emission from the crop residue burning was stopped in the Indian agricultural sector. Further we have fitted an econometric model to determine the effect of carbon trading on other stock market variable.

The fate of rice crop residues and context-dependent greenhouse gas emissions: Model-based insights from Eastern India

“…Despite the fact that carbon offset markets have previously been suggested as an opportunity to incentivize more sustainable crop production practices ( Gorain et al, 2021 ), our results suggest that the most commonly supported strategy of building SOC stocks will typically increase rather than decrease emissions in the context of rice-based agricultural systems (with the possible exception of residue incorporation in dry sites). In Eastern India, some fields remain persistently flooded due to factors like landscape-scale drainage patterns that are not readily controlled by farmers.…”

“…In areas where burning is an emerging or established practice, burgeoning carbon offset markets have been proposed as an opportunity to shift the perception of rice straw from a waste product to a valued resource ( Gorain et al, 2021 ). Many current carbon market protocols for GHG mitigation are driven primarily by strategies for increasing soil organic carbon (SOC) stocks.…”