As the world grapples with the escalating impacts of climate change, tree plantation and carbon sequestration have emerged as indispensable tools in promoting environmental sustainability.
For India, an emerging global economy with a significant reliance on carbon-intensive industries, transitioning to greener practices is not just an option-it is an imperative.
India’s current forest and tree cover stands at 25.17 per cent, falling significantly short of the 33 per cent target set by the National Forest Policy of 1988. Bridging this gap is essential to counter the effects of deforestation, urban expansion, and surging greenhouse gas (GHG) emissions. Tree plantations serve as natural carbon sinks, capturing and storing atmospheric carbon dioxide, which is crucial in mitigating the impacts of global warming.
Recent initiatives, including the National Agroforestry Policy of 2014 and the Trees Outside Forests in India (TOFI) program, have sought to encourage private landowners, farmers, and industries to actively participate in plantation activities.
These efforts aim to reduce dependency on natural forests, address ecological degradation, and create employment opportunities in rural areas. By integrating agroforestry with tree-based enterprises, India can ensure that environmental restoration goes hand in hand with sustainable livelihoods.
Global pressure on Indian industries
Indian industries are increasingly feeling the heat of stringent global carbon footprint regulations. The European Union’s Carbon Border Adjustment Mechanism (CBAM), set to take effect in 2026, will impose tariffs on carbon-intensive imports such as steel, cement, and chemicals. In 2023, trade between India and the EU reached €124 Billion, making the potential impact of these tariffs on Indian exports substantial.
To adapt, industries are looking toward carbon-offset projects, including large-scale tree plantations, as a viable solution. Investments in such initiatives not only help companies align with international sustainability benchmarks but also provide opportunities to secure carbon credits under globally recognised schemes like the Verified Carbon Standard (VCS) or the Clean Development Mechanism (CDM). These credits can offset industrial emissions, enabling businesses to comply with international regulations while maintaining their competitiveness.
Economic and social advantages
Beyond their environmental benefits, tree plantations significantly contribute to
economic and social development. Agroforestry, in particular, creates opportunities for farmers and marginalised communities by offering income from multipurpose tree species that yield both ecological and economic returns. This dual approach addresses rural poverty while promoting environmental restoration.
Active community participation in plantation projects enhances their success and sustainability. Involving local stakeholders fosters a sense of ownership and ensures long-term viability. Training and capacity-building initiatives further empower communities with the knowledge and skills required to manage these projects effectively.
While tree plantations offer a promising path forward, several challenges remain. The rising cost of carbon credits poses a significant financial obstacle for industries. For instance, in 2023, carbon credit prices under the European Union Emissions Trading System (EU ETS) averaged €83 per tonne of carbon dioxide, with
projections suggesting a rise to $238 per tonne by 2050. For Indian businesses, investing in tree plantations presents a more cost-effective alternative to purchasing expensive credits from international markets.
India also needs a robust and transparent carbon trading policy to engage in global carbon markets effectively. Under Article 6 of the Paris Agreement, countries can trade carbon credits to meet their emission reduction goals. Establishing credible policies and governance mechanisms is critical for India to attract international investments and solidify its position in these markets.
Toward sustainable development
Strategic partnerships and innovative project designs offer a way to tackle the dual challenges of environmental degradation and industrial sustainability.
Collaborations between industries, government agencies, and local communities can lead to scalable plantation models that integrate agroforestry, address climate change, and enhance rural livelihoods.
As India strives to achieve its net-zero emissions target by 2050, tree plantation and carbon sequestration will play pivotal roles in bridging the gap between policy objectives and on-ground realities. These initiatives align economic growth with environmental stewardship, offering a roadmap for a greener future.
Tree plantations are no longer an optional solution but a necessity in combating climate change. They provide a scalable and impactful strategy to reduce carbon footprints while improving rural livelihoods. With tightening global regulations and the rising costs of inaction, Indian industries must embrace sustainable practices and invest in carbon offset projects.
By prioritising tree plantation and carbon sequestration, India can balance its industrial growth with ecological preservation, paving the way for a sustainable future that benefits both the economy and the environment. Integrating these initiatives into national policies and industry strategies will ensure that India remains a key player in the global fight against climate change.
Conclusion
India stands at a crucial juncture where economic growth and environmental responsibility must go hand in hand.
Tree plantations and carbon sequestration offer a viable path to achieving sustainability while ensuring industrial competitiveness in a carbon-conscious global market. The nation’s commitment to expanding forest cover, promoting agroforestry, and engaging in carbon trading mechanisms will determine its success in mitigating climate change and meeting international sustainability benchmarks.
Strategic investments in large-scale afforestation projects and partnerships between industries, policymakers, and local communities are essential for achieving meaningful progress. These initiatives not only enhance carbon capture but also create economic opportunities, particularly for rural populations.
By integrating tree-based enterprises into national development strategies, India can harness the economic potential of sustainability while addressing pressing ecological concerns.As global climate regulations become increasingly stringent, Indian industries must proactively invest in carbon offset initiatives, including afforestation and reforestation programs.
Establishing a transparent and efficient carbon trading policy will further strengthen India’s position in international markets.
The road ahead requires a multi-faceted approach that aligns industrial growth with environmental stewardship. By prioritising tree plantation and carbon sequestration, India can strike a balance between economic development and ecological preservation, ensuring a sustainable and resilient future for generations to come.
(The writer is chairman Foundation for Organisational Research and Education (FORE) and FORE School of Management and former Chairman and Managing Director, MMTC Ltd. Views expressed are personal)
