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The Maharashtra Government is in the final stages of formulating an Act that will enable “tree credits” to be traded in the State.
These tradable instruments will be similar to carbon credits, awarded for capturing carbon from the environment.
Buying credits would be mandatory for polluting industries and infrastructure projects requiring diversion of forest lands or felling of trees.
In addition, purchasing such credits would be binding on owners of motor vehicles of 12 tonnes and above as well as large hydro-electric dam projects. A senior officer of the State Government said that the draft Act would be ready by November. For regulating the trade and formulating policies, setting up a board and an authority will also be incorporated in the Act, the officer said. Tree credits have been formulated so that the farmers and land-owners get money for planting and maintaining trees. It is an initiative of the Social Forestry Department to add green cover on non-forest lands, the officer added.
Tree credits are expected to be issued to each tree grown on private land. They will be mapped using Geographic Information Systems and an annual physical review will be carried out by government officials.
Former Principal Chief Conservator of Forests and Director-General of Social Forestry, Maharashtra Government, Tasneem Ahmed, who formulated the idea, told Business Line that tree credits work on the ‘polluter-pays’ principle, where polluting industries and other activities that reduce green cover have to buy tree credits. The money raised in the process is used to bring a larger area under green cover, he said.
Ahmed said the plan is to incentivise land owners to plant trees. The cultivation of hardy local varieties such as Sagawan (teak), Beeja and Haldu would be encouraged. Credits would be given to trees that have the maximum capacity to sequester carbon. “You cannot claim credits by planting a papaya tree,” he quipped.
He said: “In the first year, a single tree will get 0.2 credits and every year, the credit will increase by 0.2; so, at the end of five years, one tree will get three credits. If a land-owner gets 100 credits in five years, then at the end of 10 years, it will increase to 200 and in 15 years, it would be 300. The land-owner will make money provided the tree is alive,” Ahmed said.
In the initial phase, the tree credits would be bought and sold by the Maharashtra Government. But as the system for generating credits matures, it is expected to be introduced in the market for trading. A system would also be evolved by which a minimum price would be fixed, ensuring that farmers are shielded from market volatility, Ahmed said.
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