Gram Vikas organised a day-long consultation workshop on ‘Understanding Carbon Markets’ to guide grassroots organisations on engaging with Voluntary Carbon Markets (VCM), and promoting a fair, community-centred carbon finance ecosystem. 

The workshop brought together 25 representatives from 17 Civil Society Organisations (CSOs) from Odisha. It focused on strengthening their technical understanding, addressing practical challenges, and fostering collaborative solutions to ensure communities directly benefit from carbon market initiatives.

The session opened with a welcome address by Liby T. Johnson, Executive Director, Gram Vikas. In his remarks, he highlighted how Gram Vikas’ agroforestry initiatives leverage carbon markets to empower communities by tackling land degradation, securing tenure rights, ensuring fair benefit-sharing, protecting data, and building capacity against exploitation. He also emphasised the crucial role of CSOs in democratising access to carbon markets and ensuring that climate action remains community-focused.

Demystifying Carbon Markets: Mechanisms, Credits, and Global Trends

Siddhartha Dabhi from the Centre for Grower-centric Eco-value Mechanisms (C-GEM) explained that the carbon market works by pricing carbon to incentivise emission reductions, mainly through two mechanisms: the regulated Cap-and-Trade systems, where companies face legally binding emission limits, and the Voluntary Carbon Market, where credits are bought and sold freely. He further noted that Global Warming Potential (GWP) provides a standard way to compare the warming impact of different greenhouse gases.

He described the three main types of carbon credits: reductions (like energy efficiency), avoidances (like renewable energy), and removals (like afforestation). He summarised the credit lifecycle from project design to retirement and briefly noted that pricing depends on source, integrity, co-benefits, and adherence to standards.

Based on global market insights, he mentioned that carbon markets could save $250 billion annually in climate action costs by 2030, with the Voluntary Carbon Market (VCM) projected to grow from $2.4 billion in 2023 to $21.7 billion by 2032. In India, the VCM is valued at over $1.2 billion, making the country the second-largest supplier of carbon offsets in the world.

Confronting market gaps and power imbalances

The discussions highlighted the urgent need for an inclusive, transparent, and community-focused carbon finance system. Participants noted how current market practices prioritise financial returns over community needs, leaving smallholder farmers and CSOs sidelined by high barriers and inequitable value chains. Other challenges include CSOs’ limited influence, superficial community engagement, and the risk of short term market priorities undermining long-term development goals.

Dabhi said that at C-GEM, fairness concerns are addressed by ensuring that 70–75 percent of revenues flow directly to communities. The organisation prioritises robust data protection, develops high-quality nature-based credits, and focuses on comprehensive capacity-building. This approach helps create a carbon finance ecosystem that truly empowers and centres communities.

Gram Vikas’ Water-First Approach to Carbon Credits

The Gram Vikas team shared insights from the Water Secure Gram Panchayat Programme and the Climate Change Adaptation and Transition initiative highlighting how these programmes use Comprehensive Source-shed Development (CSSD) and Community-based Water Resource Management (CWRM) to enhance water security, improve soil health, and support livelihoods, treating carbon revenue as a co-benefit.

According to the Gram Vikas team, the initiatives cover 3,561 hectares across four districts and are expected to generate 1.96 million credits over a 30-year period. Up to 75 percent of the revenue will be  allocated directly to the communities, and villagers will retain ownership of their land, trees, and carbon rights. The team also explained how the programmes empower Village Development Committees and ensure continuous Free, Prior, and Informed Consent(FPIC). They highlighted best practices including transparent benefit-sharing, biodiversity-friendly plantation practices, effective grievance redressal mechanisms, and ongoing technical support as essential elements that would ensure carbon finance genuinely benefits communities

During the Q&A session, CSO representatives raised questions about several key aspects of carbon market participation including eligibility criteria for farmers, ownership models for carbon credits, equitable benefit-sharing frameworks, land rights and tenure issues, the role of Gram Panchayats and Gram Sabhas, species selection for biodiversity alignment, and the need for transparent trading standards and reliable technical information .

A Call for Collective Action and Advocacy

Jagadananda, Co-Founder of the Centre for Youth and Social Development (CYSD), moderated the session and emphasised the need for CSOs to unite as a collective voice. He noted that united efforts could help build knowledge, demand fairness, and safeguard the interests of those driving real climate action on the ground.

The workshop concluded with the participants agreeing to establish a network of CSOs to share knowledge, negotiate fair terms, and advocate for reforms that prioritise community interests in carbon markets. The need for a common action plan and a knowledge-sharing platform were identified as key tools to advance these goals.

Liby T. Johnson concluded the session by stressing that carbon finance should serve as a tool for community empowerment and justice, not exploitation. The day ended with a strong commitment from participants to keep community voices at the forefront of India’s carbon market.

Reported by: Jayesh Wankhade, Bharti Kumari, Muskan Agarwal Photos: Jayesh Wankhade