Himachal Pradesh Signs Landmark Carbon Credit Deal With World Bank

Posted on June 2, 2011 by

On May 22, Himachal Pradesh signed a landmark carbon credits agreement with the World Bank under the Clean Development Mechanism (CDM) for 11 water shed divisions of the state, a first of its kind for India and the first project in the world that is linked to an ongoing watershed management programme.

Under the agreement, the bank will buy carbon credits from the new forests being developed on degraded lands under a watershed management programme.

The project has been named “Reforestation project – improving livelihood and watersheds” and is being implemented in 177 panchayats in 11 watershed divisions. The state hopes that the reforestation of the watershed areas would improve the livelihoods of the local people and generate carbon revenues for the community.

Hubert Nove Josserand, Deputy Country Director of World Bank, signed the “emission reduction purchase agreement” on behalf of World Bank’s International Bank of Reconstruction and Development while Sudripto Roy, Additional Chief Secretary, signed it on behalf of the Himachal Government in the presence of Chief Minister P. K. Dhumal.

The agreement has been signed for 10 years ending December 2018 and further widening of its scope would be considered as per the project’s growth.

The project covers 4,003.07 hectares of land which surpasses a similar CDM project in China, covering an area of about 3,500 hectares, thus making it the largest of its kind in the world. The project is expected to accrue an income of about Rs.8006140 annually. “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.

With this agreement, there are now 18 World Bank supported carbon revenue programmes underway worldwide. “The broad objective of the bio-carbon CDM project is to sequester greenhouse gases by expanding forestry plantations on mostly degraded lands, apart from creating a carbon sink,” said Josserand.

Under this agreement, benefit accruing to the community and private landholders will be about Rs.2,500 per hectare, depending on growth of trees and other factors.

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Posted in: Carbon Markets