The Centre should promote a carbon credit trading mechanism on lines of the Kyoto Protocol in the country to enable the plantation industry to earn carbon credits.
Presently, nations under the European Union buy carbon credits under the United Nations Framework Convention on Climate Change that has been mandated through the Kyoto Protocol.
However, a majority of projects approved under the clean development mechanism are industrial in nature and very few belong to the agriculture sector.
"As EU is not interested in buying carbon credit from the agriculture sector due to the cumbersome procedures prescribed under Kyoto Protocol, the government should take the initiative to put a mechanism in the country for facilitating carbon trading in the country," James Jacob, director of Rubber Research Institute of India, said.
He also said, of the 2,362 the Indian projects approved under clean development mechanism (CDM,) only 15 were from the plantation sector.
Referring to this matter, A K Mangotra, additional secretary of Ministry of Commerce, said, "We are constantly trying to push the case of plantation sector on the issue of Kyoto protocol. We will again raise this issue in the next round of conference of parties in December, 2010."
He, however, said the government had no proposal to go in for a domestic carbon credit trading mechanism in the near future.As per data available with UPASI, there is a potential of earning Rs 25 lakh per annum from the plantation sector through carbon credit mechanism in the near term.
"As the acreage under plantation grows in India, there is scope for earning more credit from the sector," T V Alexander, president of UPASI said. Plantation sector holds a lot of potential to earn carbon credit under Kyoto protocol under aforestation/reforestation credits (A/R). Under A/R, plantation projects are given credits as they deposit carbon dioxide in the soil than letting them dissipate into the atmosphere. This process is popularly known as carbon sequestration.
"The dynamics of plantation industry can change through earning of carbon credit," Jacob said.
Presently, carbon credit from industrial source like from a thermal power project fetches $7-$8 per tonne of carbon dioxide in international market, where as the price for A/R credit is only $4-$5.
"There is price disparity due to lesser demand from EU nations for these credits," he added.