Climate Change Is Affecting Tea Farming In India And How Carbon Credit Markets Can Be A Solution

India is the world’s second-largest tea producer and more than half of the production comes only from Assam. The NE state, according to a climate vulnerability index, was recently identified as one of the most climate-vulnerable states in India.

The Rajya Sabha this month cleared the Energy Conservation (Amendment) Bill, 2022, which besides pushing for use of non-fossil energy sources, also seeks to promote a domestic carbon credit market to fight climate change. Indian farmers, especially the climate change-affected small tea farmers, hold immense potential to play a leading role in this carbon market. New technologies and digital connectivity are already pairing carbon credit systems with farmers globally, to unlock opportunities for the farming communities who are incentivised to move to climate-positive and regenerative agriculture that rewards them financially.

Climate Change Is Affecting Tea Yield

India is the second largest tea producer in the world and more than half of the country’s production comes from a single state, Assam. The north-eastern state, according to a climate vulnerability index, was recently identified as one of the most climate-vulnerable states in India. As per an IIT-Guwahati study, tea-growing areas have been witnessing long rainless spells or high-intensity rainfall of short duration in recent years, resulting in waterlogging and soil erosion in tea gardens.

The changes in temperature and rainfall patterns have affected the tea-growing seasons, resulting in crop loss, reduced productivity and low income. In the last decade, the price of tea sold at auctions has also shown a declining trend of 15-20% across various categories. In a 2018 survey of tea-farm workers in Assam, 88% of plantation managers and 97% of smallholders said that adverse climate conditions were a definite threat to their tea-growing operations.

For tea smallholders, the most exploited section in the tea supply and value chain, the impact of climate change is real and immediate. A multi-year study (2004-2013) across 82 tea gardens in Assam found that tea yield is sensitive to a rise in monthly average temperature – a drop in yield is registered when the average temperature goes beyond 26.60C.

Finding A Win-Win Solution

Given the climate crisis tea smallholders face in India, it is necessary that we look at solutions offered by the carbon sequestration process, which mitigates the climate change impact and also helps farmers with an additional revenue source, thus increasing their income.
Carbon sequestration is the process of capturing and storing atmospheric carbon dioxide. It is an effective method to reduce the amount of carbon dioxide in the atmosphere.

Once a farmer adopts carbon sequestration practices, this carbon can be quantified and converted into carbon credit; one carbon credit is equivalent to 1 tonne of CO2 (tco2e). Various industries and multinational companies have committed to reducing their carbon footprint by decarbonising their supply chains. They purchase these carbon credits from such farmers who have implemented carbon sequestration practices on their land. This, in turn, helps the companies in achieving their net-zero emissions goal.

In the carbon market, one carbon credit can be valued from Rs 400-800 (soil-based carbon) to Rs 1,600-2600 (tree-based carbon). For the farmer, the additional income through carbon-based finance is an attractive return.
Ways To Approach Carbon Sequestration

There are two major approaches to carbon sequestration in tea plantations – agroforestry-based sequestration and soil carbon sequestration.

Agroforestry-based sequestration: Tea agroforestry systems (tea plants and shade trees) have shown immense potential to sequester carbon dioxide, and act as a sink for decarbonising the tea value chain.

According to a model-based study, expanding the area under agroforestry by even 5% of the current area, at 5-year intervals starting from 2020, can help offset India’s total projected emissions by 2050. Further, carbon revenue increases the profitability of agroforestry against monoculture by 2% (Rs 703) to 300% (Rs 3,400) per hectare.

The woody, perennial-based land-use systems seen in tea gardens have relatively high capacities for capturing and storing atmospheric carbon dioxide and ensuring sustained carbon sequestration in sensitive areas. Studies have shown that different species of leguminous shade trees are essential components of tea agroforestry system (AFS), providing necessary cover for tea bushes and maintaining soil health. Some of the common shade tree species are silk tree (Albizia chinensis), black siris (Albizia odoratissima), true indigo (Indigofera teysmannii) and cassia (Cassia siamea).

As per one study, average agroforestry-based carbon sequestration was estimated at 21.94 tco2e per hectare per year for tea plantations in north-east India; of this, shade tree was responsible for 57.3% of the carbon sequestration while tea bushes contributed 42.7%.

Example: Agroforestry CRUs (carbon removal units) for the Organic Restoration of Nature or Acorn is an agroforestry initiative by Rabobank that provides smallholder farmers an entry into the international carbon market. Acorn supports the initiation and development of agroforestry projects for carbon sequestration through biomass growth, predominantly through trees, and this is measured with the help of satellite monitoring.

It also facilitates the trade of the carbon removal units (CRUs) generated from the sequestered carbon on the smallholder’s farm. Corporations that want to offset their carbon emissions buy these carbon removal units. Up to 80% of this money goes directly to the farmer’s account and the remaining 20% is equally distributed between Rabobank and the local partner (like Solidaridad) for certification/monitoring costs and promoting agroforestry, respectively.

Soil Carbon Sequestration: Soil carbon sequestration, while mitigating carbon emissions, also enhances soil quality and agroecosystem productivity, thereby reducing the input cost for the farmer (like fertilisers, pesticides etc.) and creating an additional income stream.

A number of start-ups with innovative technologies have come up with systems that can monitor and validate the soil organic carbon and also help in selling the stored carbon in the carbon market as carbon credits.

Example: Soil organic carbon-based sequestration. A major indicator of good soil health is the presence of soil organic matter, also called soil organic carbon. Farmers are encouraged to adopt good agricultural practices that can improve soil health and increase the soil organic carbon (SOC) levels on their farms. Remote sensing-based technology can monitor the change in SOC and validate it. Following a third-party verification, the increased carbon in the soil can be converted into carbon credit. Start-ups like boomitra and Indigo are harnessing the potential of technology to mobilise carbon credits for smallholders.

The author is Manager, Climate Change, for Solidaridad Asia.

[Disclaimer: The opinions, beliefs, and views expressed by the various authors and forum participants on this website are personal.]