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.