Beyond Emissions: Building a People-Centric Carbon Market in India

In order to provide equity, transparency, and climate justice in carbon trading, the carbon market in India has to focus on safeguarding the farmers and the communities and learn from the world's experience.Beyond Emissions Building a PeopleCentric Carbon Market in India" refers to designing India's Carbon Credit Trading Scheme (CCTS) to ensure fairness and equitable benefits for local communities, especially those involved in agriculture and forestry. Instead of solely focusing on reducing industrial emissions, a people-centric market uses carbon finance to support climate-resilient livelihoods, rural development, and environmental justice.

The introduction of the national carbon market is a significant policy innovation as India proceeds with the development of its climate commitments as part of the Paris Agreement, as well as national sustainability requirements. Carbon credit trading scheme (CCTS), which is legislated under the Energy Conservation Act, 2001, seeks to make the reduction of emissions in sectors economically viable by trading in the reduction of carbon savings. Nevertheless, the experience of carbon trading worldwide, especially in voluntary and compliance markets, exposes the high risks in the case of laws that favour regulatory equity arrangements that are non-severe or non-existent. Carbon offset projects in parts of Africa, Southeast Asia, and Latin America have discriminated against indigenous peoples, undermined land claims, and failed to provide socio-economic benefits as promised. Such collapses highlight how important it is that India enacts strong measures to protect farmers, forest dwellers, and other vulnerable groups in the process of implementing its carbon market. The absence of transparent rules/governance, inclusive benefit-sharing systems, and participative monitoring systems means the market is likely to recreate extractive models, which reverse climate justice.

This Article critically examines the experience of the failures of the global carbon market and proposes suggestions towards a rights-based, community-based approach to protecting India in transition. It states that ethical design, legal responsibility, and institutional adjustment should come before commodification in a way that the carbon market in India enhances.

Vision of the Carbon Market in India

The carbon market in India is meant to drive low-carbon development, but it should be successful in achieving its goal with, not all, but both global and local experiences on ensuring the market is inclusive, legal, and ethical.

Policy and Strategy
The vision of the carbon market of India is determined by the desire to ensure that the intensity of the GDP emissions of the country is reduced by 45 percent as against the year 2005 level, without exception, as a part of its enhanced Nationally Determined Contribution (NDCs). In the Energy Conservation Act, 1995, a scheme known as the Carbon Credit Trading scheme (CCTS) has been the notified scheme that forms the basis of this market. It aims at harnessing mitigation opportunities by allowing the existence of trade in emission reduction credits, to allow economic incentives to be consistent with climate objectives between the public and private entities. The administrator for this is the Bureau of Energy Efficiency (BEE), which has the responsibility of implementing the Indian Carbon Market (ICM) through a gradual compliance process.

Market Structure and Functional System
The CCTS presents a trading scheme based on compliance, requiring the obligated individuals, who are starting with energy-intensive industries, to comply with the targets on cutting down on emissions, or buy credits for those that are above their standards. The market development will be in steps, where the initial step is the introduction of energy efficiency credits into the market, which will be followed by renewable energy and other markets. To guarantee transparency and integrity, a centralized registry, which is a powerful Monitoring, Reporting and Verification (MRV) protocol and a digital infrastructure, has beendeveloped.

International Context and Home Imperatives
The carbon market in India comes at a time when international carbon trade systems are under scrutiny regarding equity, transparency, and the cleanliness of the environment. The levels of alienation of land, capture by elites, and marginalization of the disadvantaged communities have been found to be exposed through the experiences of REDD+ and voluntary offset programs. In the case of India, where more than sixty percent of the population relies on agriculture and forests, these lessons are pivotal. The market should not copy extractive models, but rather entrench safeguards that will safeguard the farmers, forest dwellers, and the indigenous groups. This involves the incorporation of the local governance institutions, free, prior, and informed consent (FPIC), and benefit-sharing mechanisms that are legally enforceable.

Global Lessons

The carbon market globally has shown inherent flaws, particularly in equity, transparency, and protecting the communities, which India has to deal with to establish an equitable, comprehensive, and inclusive carbon trading system.

History and Market Failures
One of the measures was the introduction of carbon markets, specifically voluntary offset schemes and the REDD+ (Reducing Emissions through Deforestation and Forest Degradation), to encourage climate reduction with the help of the market mechanism. Nevertheless, their use in the Global South has mostly resulted in unintentional consequences. In a number of countries in the African and Latin American regions, REDD+ projects have been accused of focusing excessively on carbon counting and underdeveloped community benefits, land dispossession, marginalization of indigenous voices, and secreted benefits-sharing regulations. These failures are attributed to poor governance, unenforceable forms of protection, and selling ecological services without proper social measures.

Equity, Inequality, and Marginalization
Smallholders and forest-related communities are one of the most disadvantaged groups in the world that have been affected by global carbon markets. Certified projects that have been given standards, such as the Verra in its Verified Carbon Standard (VCS) and Climate, Community and Biodiversity (CCB), have frequently not delivered on their advertised co-benefits, such as livelihood improvement or conservation of the environment. Additionally, the lack of a Free, Prior, and Informed Consent (FPIC) system has led to the disempowerment of the communities, particularly in areas that lack a good land tenure system. These forms of equity are increased by the fact that carbon revenues are actually reaped by third parties or some other players, thus leaving the same people who have their ecosystem monetized on the side-lines.

Lack of governance and transparency
The recent events of global experiences have demonstrated the need for a sound Monitoring, Reporting, and Verification (MRV) system and open registries. Carbon credit issuance in most of the REDD+ and voluntary market initiatives has not been scientifically rigorous or validated, and as a result, it inflates claims and creates reputational risks. This has relegated trust in these markets due to the absence of grievance redressal mechanisms and participatory oversight. Carbon trading will end up being a technocratic practice that is out of touch with reality on the ground and the ethics of such an endeavour, without a sense of institutional accountability.

Suggestions for the Carbon Market Design in India
These are some of the lessons that India needs to internalize in its compliance-based carbon market development.

• Protections, including FPIC and legalizing community rights, and clear MRV practices, need to be in place.
• Government at the Panchayati Raj, co-operatives, and civil society should be incorporated within the governance institutions in order to stop elite capture and continue sharing benefits equitably.
• India should learn to build a carbon market that mitigates emissions, but also builds climate justice and resilience to rural communities through learning from failures by other countries.

Securing the Farmers and communities

The carbon market in India should incorporate institutional protective measures to protect farmers and community members, to ensure that climate mitigation will not undermine the land rights, livelihoods as well and autonomy of localities.

Agriculture and Forest
The rural landscape of India is highly connected with the ecological system, and more than 60 percent of the population relies on forests and agriculture for their survival. Small and marginal farmers that constitute more than 86 percent of the farming population, do not have a formal location of land ownership and institutional assistance. Without the law and participatory governance, the carbon market processes might come up and marginalize these parties, or may even commodify their ecosystem without their approval. This weakness is given the level of the stressors brought on by climate, in the form of irregular rainfalls, soil erosion, and crop failure, which threaten rural resilience in the first place.

Dangers of Commodification without Consent
It is the experience of the world that there can be alienation of land and elite takeovers through carbon offset projects, in case the guard is not strict enough. Likewise, in India, the threats are imminent, and the generation of carbon credits is done on the agricultural or forest lands without Free, Prior, and Informed Consent (FPIC). According to The Hindu, the carbon market will be like extractive models in disguise unless land rights, local sanction, and equitable distribution of benefits are established to reinstate a harmonious setting in India. FPIC needs to be codified in the form of legal requirements and incorporated into the project-approving mechanisms, particularly in tribal and forested areas, which are regulated under the Forest Rights Act (2006).

Mechanisms for Inclusion
In order to achieve equal participation, India should use the Panchayati Raj institutions, cooperatives, and self-help groups as the platform for carbon governance. These institutions are able to promote awareness, consent, as well as grievance reparation, and make carbon revenues transparently distributed. The Energy and Resources Institute (TERI) highlights the need to structure carbon credit schemes in agriculture (including the ones encouraging low-emission practices) in such a way that they can empower the smallholder by building capacity, accessing the digital divide, and utilizing aggregation schemes. The systems of participatory Monitoring, Reporting, and Verification (MRV) have to be designed in such a way that they make community monitoring and third-party audits a part of the system.

Towards Climate Justice
Climate justice is not protecting farmers or communities out of the kindness of non-profit agencies, but as a strategic necessity. Through ensuring social security, India will be able to make its carbon economy a solution in empowering the rural poor, protecting the environment, and creating a growth engine that is inclusive. This necessitates a transition in the display arrangement that has always been technocratic accounting of carbon in compliance with climate governance that is rights-based, whereby local voices adjust the path of the mitigation undertakings. It is only then that the carbon market in India can gain legitimacy, resilience, and moral suitability to its developmental objectives.

Policy Advice and Ethics

The carbon market in India should be led by ethical concerns and policy protection based on equity principles, transparency, and strict protection of the rights of communities to secure a fair and sustainable climate change.

Equity in Carbon Accounting
One of the principles that should be incorporated into the carbon markets in India would be to incorporate equity in carbon accounting methods.

• This includes the appreciation of the role played by the smallholders, the forest dwellers, and the indigenous people in the process of carbon sequestration and low-emission activities.
• The model of the Voluntary Carbon Market (VCM) provided by the Ministry of Agriculture focuses on making small and marginal farmers eligible to participate in carbon credit generation, but it should also be included in compliance markets.
• The promotion of a benefit-sharing mechanism must be enforced by law, and carbon revenue should be shared justly with the community, sharing institutions like cooperatives and Panchayats.

Empower Legality and Consent Procedures
We need legal certainty that is not to be exploited but rather guaranteed bycommunity autonomy.

• India has to institutionalize the Free, Prior, and Informed Consent (FPIC) practices, particularly in tribal and forested areas, which are controlled by the Forest Rights Act (2006).
• Land rights and consent procedures are absent, with carbon trading posing a threat to recreate extractive approaches, as claimed to be in the name of climate action, as pointed out in The Hindu.
• There should be project approval practices with social impact assessment and redress of grievances, which are obligatory.

Institutionalization of Participatory Governance

The systems of Transparent Monitoring, Reporting, and Verification (MRV) are essential in ensuring integrity in the market.

• These systems are to be built to incorporate community checks, third-party audits, as well as the creation of digital registries that stakeholders can access.
• The institutions of the Panchayati Raj and other civil society organizations should be empowered to take part in carbon governance, which is accountable and will not be controlled by the elites.
• Participatory MRV not only promotes transparency, but it also creates trust with the rural stakeholders and enables long-term interaction.

Climate Justice and Development Objectives
The carbon market in India cannot sustain itself as a means of cutting emissions, but it should be a climate-just and inclusive development.

• Ethical imperatives require that food security, biodiversity, and cultural heritage are not affected by carbon trading.
• Policies must be in line with Sustainable Development Goals (SDGs), especially those that address fighting poverty, gender equity, and ecosystem protection.
• An ethical and social equity approach, based on environmental ethics, will make India based carbon markets empower the rural populations and, at the same time, make a significant contribution to global climate control.

Conclusion

The carbon market in India can be described as a paradigm shift to bring together climate mitigation and sustainable development. But, its effective functionality will also not be determined by the technical efficiency or financial viability, but by the ethical background and institutional protection it entrenches. As seen in the global sphere, besides causing inequity and community rights, carbon trading, when decoupled from the equity and the community, can lead to the aggravation the socio-economic vulnerability and environmental injustices. In the case of India, the need to create carbon markets that shield farmers, forest dwellers and indigenous representatives who are tightly interconnected due to rural livelihoods and ecological stewardship, is eminent: carbon markets will have to be designed so that they can stand against the forces of climate change by protecting the livelihoods of indigenous farmers, forest dwellers, indigenous communities by providing them with participatory forms of governance, legal protection and clear benefit-sharing. India can ensure having a carbon market that is not only environmentally sound but also socially fair by institutionalising Free, Prior, and Informed Consent (FPIC), enhancing the effectiveness of Monitoring, Reporting and Verification (MRV) systems, and making local institutions work together. By doing so, it will provide a precedent to the climate governance that considers resiliency, rights, and moral accountability when the goals focus on commodifying and marginalizing people.