Greater investor outreach is needed to grasp the risks versus opportunities of sustainable land use
Green is in. As the world gears up to set key climate goals at COP26 in Glasgow this year, countries and corporations are racing to institute new policies to limit carbon emissions and invest in sustainable business models and practices. Countries like China and the US have outlined ambitious programmes to ramp up Government spending to aid a complete renewable energy transition while creating jobs for their economies and strengthening their GDP. Pressure is mounting on India to commit to similarly ambitious climate goals, as the third-largest source of carbon emissions globally. The country is currently on track to meet its Paris Agreement commitments but its goals fall short of the policies needed to reduce emissions in line with the targets needed to keep the global temperature rise below 1.5° Celsius by 2050. New policies on coal mining, forests and businesses within environmentally sensitive zones diverge from the global move towards protecting and restoring forests.
For climate vulnerable regions like the Eastern Himalayas, including India’s North East, even a 1.5° Celsius rise will transform its climate, impacting everything from its water sources, to the crops that can be grown, its biodiversity and by extension, the lives of the 246 million people living there. India’s farmlands account for 21 per cent of its total emissions. However, effective management of farmland will mitigate its emissions by 222.44 million tonnes of carbon a year. These solutions include mosaic restoration of agricultural land, the use of biochar, optimising grazing intensity, nutrient management and improved rice cultivation techniques. According to data compiled by the World Resources Institute, the country has the opportunity to transform 87 million hectares (ha) of agricultural land by planting trees on farmland - mosaic restoration. In India’s Eastern Himalayas, this farmland is 1.8 million ha. Under the National Mission on Sustainable Agriculture, farmers received support of up to `70 per tree planted on agricultural land or in the periphery/boundary areas. This support needs to be streamlined with existing policies and subsidies, which currently focus on increasing production of cash crops like oil palm through monoculture cultivation, often in unsuitable areas.
With a growing global appetite for sustainable investment in energy and sustainable land and ocean use, India is rife with opportunities that must be leveraged effectively. Sustainable funds have outperformed their regular counterparts, with the Nifty ESG Index delivering a five-year return of 10.80 per cent compared to 8.99 per cent on the Nifty 50. The global push to eliminate deforestation from supply chains must be foregrounded in the Indian context. Both the stock exchange’s ESG guidelines and SEBI’s new guidelines on Business Responsibility and Sustainability Reporting include environmental concerns in reporting indices, but must be expanded to mandate deforestation/habitat loss audits across a firm’s supply chain. Stronger, robust climate and environment impact and risk reporting must be mandatory for businesses and must be weighted in their investment rankings. Uniform standards need to be introduced for ESG funds, with robust minimum requirements on environment and climate sustainability for businesses to be included in ESG portfolios. Global opportunities in sustainable land and ocean use stand at approximately $3 trillion according to the World Economic Forum. For natural capital rich regions like India’s Eastern Himalayas to benefit, stronger mechanisms are needed to define a local carbon market to allow firms to invest directly in forests for their carbon sequestration services. More studies and robust assessments are needed on the scale of business opportunities in sustainable land use and forestry. Greater investor outreach and awareness is needed in India, to calculate the risks versus opportunities of sustainable land use against business as usual scenarios, particularly in eco-sensitive zones.
(The writer is co-founder Rural Futures and designer, Balipara Foundation. The views expressed are personal.)