Context

• The contemporary development paradigm, inherited from the Industrial Revolution, has propelled economic growth at an unprecedented pace but at a severe ecological cost.
• While some propose degrowth as a corrective, this approach is neither just nor feasible for developing nations that continue to struggle with poverty, hunger, and underdevelopment.
• The challenge, therefore, lies not in halting growth, but in decoupling it from environmental degradation.
• Within this context, carbon credit systems and sustainable technologies have emerged as potential tools for reconciling growth with ecological balance.

Decoupling Growth from Environmental Harm

• Economic growth and environmental protection have long been viewed as opposing forces.
• However, the need to achieve both simultaneously is increasingly urgent, especially for the Global South.
• Developing nations such as India cannot afford degrowth; instead, they must pursue sustainable growth that uplifts livelihoods while mitigating environmental harm.
• This can be achieved through clean technologies, renewable energy, and sustainable agricultural practices.
• India’s rapid expansion in solar energy and micro-irrigation offers tangible evidence that green innovation and economic progress can coexist.
• These examples illustrate the concept of green growth, a model in which technological and policy interventions drive both environmental protection and inclusive prosperity.

Carbon Credits: Promise and Pitfalls

• Promise
  • Among the various mechanisms designed to facilitate this transition, carbon credits have gained prominence.
  • A carbon credit represents a verified reduction or removal of greenhouse gas emissions, tradable in markets to offset emissions elsewhere.
  • In theory, this allows firms, especially in industrialised countries, to finance low-carbon activities in developing regions, rewarding sustainable practices such as renewable energy generation, reforestation, and agroforestry.
  • India’s Carbon Credit Trading Scheme (CCTS) embodies this ambition, establishing benchmarks for emission intensity and creating a national registry and trading platform.
  • By including voluntary offsets and methodologies for low-emission practices such as biochar and sustainable rice cultivation, India seeks to position itself as a leader in equitable carbon trading.
• Pitfalls
  • The global experience with carbon markets exposes a critical paradox: projects meant to empower local communities often end up marginalising them.
  • Despite the high potential of agriculture-based carbon projects, only a fraction in India have successfully registered or issued credits.
  • Studies, such as those by CIMMYT, attribute this gap to poor farmer engagement, limited training, and weak institutional support, particularly among smallholders and marginalised caste groups.
  • This pattern underscores a persistent structural issue: carbon markets risk reproducing inequalities if not designed with local realities and justice at their core.

Carbon Projects and the Shadow of Exploitation

• The danger of exploitation within carbon markets becomes starkly evident in the Northern Kenya Rangelands Carbon Project, a high-profile case intended to demonstrate community-led climate action.
• Despite claims of participatory governance, investigations revealed serious violations—lack of consent, weakened land rights, and opaque management.
• The project’s suspension by Verra, following evidence of flawed carbon measurement and disregard for free, prior, and informed consent (FPIC), exposes systemic weaknesses in current carbon governance.
• The Lake Turkana Wind Power Project, also in Kenya, further illustrates this tension.
• Though lauded as a renewable energy success story, it displaced herders by fencing vast tracts of communal land, restricting access to grazing routes and water.
• These cases reveal an unsettling irony: sustainability initiatives, if not equitably structured, can perpetuate the very injustices they aim to correct.

Structural Vulnerabilities in India’s Carbon Market and The Way Forward

• Structural Vulnerabilities in India’s Carbon Market
  • India’s carbon market is expanding rapidly, yet it remains vulnerable to power asymmetries.
  • Small farmers, tribal communities, and marginalised groups often face profound information gaps and limited negotiating power.
  • Current regulations under the CCTS emphasise technical compliance, such as verification and accounting, but neglect critical issues like land tenure, FPIC, and equitable distribution of revenues.
  • This creates fertile ground for opaque contracts, elite capture, and greenwashing, where companies project sustainability while perpetuating inequality.
• Toward a Just and Inclusive Climate Transition
  • Building a credible carbon market demands not only sound economics but also ethical governance.
  • A just transition requires adaptive regulation, stakeholder engagement, and context-sensitive design.
  • Policies must embed social safeguards, such as FPIC, transparent contracts, and grievance mechanisms, to prevent the replication of extractive patterns.

Conclusion

• For developing nations like India, the path forward lies in equitable decarbonisation, achieving growth and poverty reduction while upholding community rights and environmental integrity.
• Carbon credits and markets, though powerful tools, are not inherently just; they become so only when grounded in fairness, participation, and transparency.
• India can either build a carbon market that mirrors historical inequalities or pioneer a model that harmonises growth, sustainability, and justice.
• The choice will determine whether the green transition becomes a new form of extraction, or a genuine path toward shared prosperity.