The World Bank on Sunday entered into an agreement with the Himachal Pradesh government for what is to be the world’s largest and India’s first clean development mechanism (CDM) project under which the bank will buy carbon credits from the new forests being developed on degraded lands under a watershed management program.
In presence of chief minister Prem Kumar Dhumal, the agreement was signed by Hurber Nove Josserand, deputy country director World Bank on behalf of International Bank for Reconstruction & Development: World Bank Bio Carbon Fund and Sudripto Roy, additional chief secretary forests on behalf of the state government. The agreement would be operative till December, 2018.
Speaking after the signing of the agreement, Josserand said that the project impact area of 4003.07 hectares would surpass the 3500 hectares CDM project of China to make it the largest project of its kind in the world.
With today’s agreement, there are now 18 World Bank supported carbon revenue programs underway worldwide. It also places India on the global map of a future economy largely to be measured in terms of accruing carbon credits. One ton of CO2 converted into biomass under new plantations is counted as one credit.
“Besides being the first pilot project for India, it would also be a worlds first carbon credit project that is linked to an ongoing watershed management program.The broad objective of the bio carbon CDM project is to sequester green house gases by expanding forestry plantations on mostly degraded lands apart from creating a carbon sink,” said Josserand.
Spread over 11 watershed divisions in 177 gram panchayats across 10 districts under the Mid Himalayan Watershed Development Program, the CDM agreement is estimated to fetch a carbon revenue of at least Rs 20 crore for the first crediting period of 20 years.
The carbon revenues have been calculated at a modest US $ 5 per ton of carbon dioxide accumulated in tree biomass, above ground as well as below the ground.
“The carbon revenue will primarily go to the village community and provide an incentive to protect watershed and forests,” said Rajan Samantraray, World Bank team task leader of the project.
Under this agreement benefit accruing to the community and private land holders would be about Rs 2500 per hectare, depending up growth of trees and other factors.
The hardest aspect for such a pioneering project was the validation process under United Nations Convention on Climate Change (UNFCCC), which has been completed and the project would be registered soon, said chief minister Dhumal.
The project aspires to mitigate the impact of climate change by not allowing felling of trees on the land taken under the project, no diversion of it would be allowed for non-forestry purposes and the panchayat would not have any rights to the timber of the trees planted during the period of the agreement.
The project is to bear entire cost of plantation and maintenance upto 5 years in case of forests and community land whereas for the plantations on private land the project will provide fencing material excluding fence post and seedling at the site of planting.
The rights to the carbon sequestered in the plantation raised shall rest with Himachal government through forest department.
The legal status of land brought under the agreement shall remain unchanged and continue to be the same as prior to signing of agreement.
The financial benefits accruing for sale of carbon credits to the signatories of the agreement shall be in accordance with the procedures land down in the fund flow mechanism.