Despite 29 years of climate crisis talks, finance remains the key bottleneck for large-scale action, as multilateral treaties fail to institutionalise funding support to push the planet on a low-carbon growth trajectory. India has maintained the principle of a “common, but differentiated responsibility”, allowing developing countries more carbon emission leeway to meet their development needs, while the developed world draws down its emissions and financially supports the Global South in reducing emissions. However, global North countries have consistently resisted owning up to their responsibilities. Add to this the growing influence of the hyper-consumer class (the club of billionaires), that seeks to turn even this emergency in to an opportunity for greater profits, or push their vision of utopia (on this planet or some other).
At the heart of this imbroglio is a tug-of-war between the developed countries’ view of the climate crisis as requiring a grand set of solutions and developing countries’ view that it needs local solutions. One finance tool that has gained attention is a global market for carbon credits. Carbon credits are permits or certificates that allow the holder to emit a certain amount of greenhouse gases, with one credit typically representing one tonne of carbon dioxide equivalent. When carbon credits are earned through replenishing, regenerating, or managing natural resources, they are referred to as nature-based carbon credits. One of the most popular ways of earning such carbon credits is through tree plantation programmes. The assumption here is that trees will sequester carbon over their lifetime and provide other ecosystem benefits. This seems almost too good to be true, and actually is. Carbon credits create a local problem: Trees require more than carbon to grow; they also need water.
Consider farmers in a hot, arid region grappling with severe water shortages while striving to cultivate their crops. Now, envision the introduction of low-cost solar pumps that offer the ability to irrigate fields, eliminating the dependency on expensive fossil fuels and significantly boosting crop production. At first glance, this appears to be a boon for both farmers and governments, with the potential to revolutionise agriculture and enhance food security.
However, such interventions further deplete already-stressed underground water reserves, revealing a deeper, more complex problem. Solar pumps, while effective, allow farmers to extract underground water throughout the day without any regulatory oversight. This unchecked extraction will lead to the drying up of aquifers in these areas. These unforeseen pressures likely leave communities more vulnerable than before. The overexploitation of groundwater represents a classic tragedy of the commons, with the most vulnerable populations bearing the brunt of the impact. Planting trees as a climate solution threatens to exacerbate the problem.
In countries such as India, land suitable for mass tree plantation programmes is scarce because it has already been converted to farm use, or other productive uses. The only lands that are then available are those in the semi-arid or drier regions of the country with naturally sparse vegetation. It is tempting to view these barren wastelands as a prime target for afforestation programmes that will not only re-green these landscapes, but also potentially earn revenue for project proponents. However, these dry regions have never naturally supported forests, mainly due to a lack of water. Trees require huge amounts of water for optimal growth, and to achieve quick results, groundwater is either extracted or brought in from distant sources. If carbon credits from these sites are being sold to companies in the Global North, this, in essence, exports groundwater — a resource that is already under severe strain in the base location. Thus, critical ecosystem services are not considered, at the risk of depleting vital resources in the pursuit of carbon capture. The use of water has thus far not been considered.
India is on the verge of launching its national carbon market, a significant move towards meeting its ambitious climate targets and such reflection is necessary. Adopting a systems approach to nature- based climate solutions with cross-sectoral collaboration is the way to move forward. Encouraging collaboration between water management, agriculture, energy, and climate policy sectors can help design solutions that consider the broader ecosystem. Implementing climate adaptation strategies that work with nature, such as wetland restoration or agroforestry, can provide multiple benefits, including water conservation, carbon sequestration, and biodiversity protection. Trust, transparency, and a well-rounded perspective are essential if we are to develop effective, sustainable strategies that truly benefit both people and the planet. The story of solar pumps is a powerful reminder that good intentions are not enough. Without careful consideration and oversight, even the most promising solutions can lead to unintended consequences that exacerbate the very problems they were designed to solve.
Abi Vanak and Anuja Malhotra are with Centre for Policy Design at ATREE. The views expressed are personal
