Small farmers could benefit from carbon markets, but South Asia needs stronger rules, reliable verification systems and regional cooperation to reduce costs and build trust.
South Asian (SA) region home to over 2 billion human beings spread over 3.5% in eight countries: Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. Around one-fourth of global inhibitors lived in SA, making it world most populated region with population density of 329/Km2.
The region is passing through socioeconomic and environmental challenges. Intergovernmental Panel on Climate Change (IPCC) sixth assessment reported acute climate vulnerability of SA, which is exacerbated by developmental constraints, pervasive poverty, governance challenges, and reliance on climate-sensitive livelihoods. The International Monitory Fund (IMF) reported that the climate vulnerability index for SA is the highest in the world. Climate change induced weather anomalies trigger socio-economic disruption. According to World Bank report more than half (750 million) people have been the victim of one or more climate related disasters in recent decades. UNICEF estimated that 76% children under 18 years are exposed to elevated temperature exposure, emphasized for robust climate resilience strategies. South Asia remains the global epicenter of climate vulnerability with over 50% of global Green Housed Gases (GHG) emissions originating in the Asia-Pacific, the region’s “vulnerability along with the resource crunch” necessitates innovative market-based instruments.
Agriculture is the main stay of SA and dominated by small landholders having less than 2-acre farmland accounting for 150.09 million, 90% of the total holdings, and 50% of the agriculture area. Agrifood systems of SA is overwhelmingly dominated (71% women, versus 47% men). The current food production system is the main source and sink of GHG emission. The GHG emission is more than 1000 MMt CO2 mainly contributed by inefficient fertilizer use, mechanization and increase cropping intensity and lower inputs use efficiency. Climate smart agriculture practices such as intercropping, relay cropping, raised bed plantation, zero/minimum tillage and agroforestry have been classified as contributors to climate resilience of agriculture.
Carbon farming as a tool has potential to turn climate vulnerability into sustainable growth through conservation agriculture, precision nutrient management, methane reduction in rice and agroforestry systems practices align with Sustainable Development Goals (SDGs), Nationally Determined Contributions (NDC), and climate adaptation goals. Based on carbon farming, carbon trading (CT) is market-based system where carbon credits (1 ton COâ‚‚e reduced/removed) are bought and sold.
Key challenges to carbon trading in SA are fragmented policies, abundance of small landholders, weak measurement, reporting and verification (MRV) system, trust deficit, and limited institutional capacity in the region.
Article 6-Paris Agreement, 2015 establishes a framework for Parties to cooperate in implementing their NDCs using market and non-market mechanisms, such as joint projects and other forms of cooperation.
The UNTD report, 2024 reflects that lack of necessary infrastructure, technology, and institutional capacity restricts the least developing countries (LDCs) to effectively participate in carbon markets and secure sustainable development co-benefits. Consequently, upon weak domestic regulatory institutions for C markets further restrict their growth nevertheless there exist opportunities that LDCs can leverage.
The uncertainties stem from Smallholder dominated Agriculture, lack of harmonized regulatory Framework, absence of robust MRV systems, lack of capacity and issue in sampling etc.
The Roadmap of SAARC region goes through establishing harmonized standards across countries, developing common rules for registration and facilitating cross-border trading of carbon credits to reduce transaction costs.
Carbon trading is a tremendous opportunity and is seen instrumental in transformation of the SA agrifood system into a major climate asset, ensuring double wins of unlocking finance and enhancing resilience in the region.
The Writer is a Senior Program Specialist (NRM), SAARC Agriculture Centre, Bangladesh.
