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  Indian villages in global carbon trading

About two years ago when GoodNewsIndia reported that an Indian company was ready to export carbon credits, it had seemed a very savvy, avant-garde move. Now Indian villages have hurried along, ahead of many Indian corporates. A most appropriately named village, Powerguda in Adilabad district Andhra Pradesh has pioneered a sale to the World Bank for $645.

The village was selling 147 tonnes equivalent of saved carbon dioxide credits. What are carbon credits and what is carbon trading? Quoting from the above cited article: “Let’s rewind to the Kyoto Protocol of 1997 by which all countries are required to reduce their greenhouse gas emissions by 5% --from 1990 levels-- in the next ten years, ie 2012—or pay a price to those that do.” The idea is, that if a country is a consumer of an environmental value like clean air, it must pay a producer of an equivalent value.

Powerguda’s claim of having saved 147 MT of CO2 is based on the bio-diesel they extracted from 4500 Pongamia trees in their village. Using this —instead of petroleum—in oil engines would enhance air quality. World Bank in a behaviour model worth emulating by other corporates, was buying those carbon credits to balance the aviation fuel burnt by aircraft carrying Bank officials.

Mr Emmanuel D’Silva, a former World Bank staffer has been working extensively among Andhra Pradesh villagers, creating awareness about this market opportunity that awaits them. In a communication to GoodNewsIndia in June,2004 he reports that five other villages have followed Powerguda and made carbon credit sales.

Mr Nalin Kishor of the World Bank who heads the programme has kindly permitted the article in the following page, to be reproduced for GoodNewsIndia’s readers. It originally appeared at the Profor site.

An Indian Village Sells Carbon to the World Bank

Powerguda Village in Adilabad District, Andhra Pradesh became the first village in India to sell carbon credits directly to the World Bank.

Ms. K. Subadrabai, President of the village’s Jangubai Self-Help Group, signed an agreement October 16, 2003 to sell the equivalent of 147 tons of carbon dioxide in emission reduction over 10 years and collected a check for $645 from Mr B. Nagnath, Additional Project Director, of the World Bank-funded DPIP project. Mr. Kevin Cleaver, Sector Manager, Agriculture and Rural Development, had earlier signed the papers in Washington, DC, on behalf of the World Bank.

The CO2 emission reduction comes from the substitution of about 51 tonnes of diesel oil by bio fuel produced from Pongamia pinnata, a native tree species found in the local forest. The people of Powerguda had planted 4,500 pongamia trees in 2002 on the edges of their agricultural land. Oil from the pongamia seeds is extracted in the village’s oil mill installed by a local government agency.

The Bank’s ESSD Forest Team purchased the equivalent of 147 tons of CO2 in emission reduction to neutralize the emissions from air travel and local transport use by international participants attending its international conference on the reform of forest fiscal systems to be held in Washington October 19-21. 500 PPM, a carbon-trading firm that had done the environmental footprint for Bank staff, verified the emission reductions on behalf of the Bank. Emmanuel D’Silva, a former WBI staff member who works among the indigenous people in Adilabad district, facilitated the carbon trade with the help of Nalin Kishor, a member of the ESSD Forest Team.

A beaming Ms Subadrabai, a leader of Powerguda’s women’s group announced that the money received from the World Bank check would be used to raise a tree nursery. She plans to plant at least 10,000 more pongamia trees in 2004. 

Pongamia is being planted on a big scale in Adilabad district as new uses for this old tree are being discovered. Records from Powerguda’s mill indicate that 25% oil is extracted from pongamia seeds, which look like almonds. The left-over oil cake substitutes for chemical fertilizer.  According to one official source, 500,000 pongamia saplings were distributed in the district in 2003. The demand is estimated at 5 million saplings. The local government has requested the state Forest Department, the beneficiary of a large IDA credit, to provide financial and technical help to local communities to set up tree nurseries to meet the demand.

The Indian government has announced an ambitious plan to produce bio fuel through community-based energy plantations of Pongamia pinnata, Jatropha curcas, and other oil-bearing seeds. 

As cited