The impending launch of India’s national carbon market marks a significant step towards achieving its climate commitments, yet it brings to the fore a critical gap in policy design—the intersection of carbon credit mechanisms and water security. As nations grapple with the urgency of transitioning to a low-carbon economy, carbon credits have emerged as a widely accepted instrument. However, their implementation often overlooks fundamental ecological considerations, with water scarcity being a prime concern.
The overexploitation of groundwater resources, exacerbated by large-scale afforestation projects and unregulated solar-powered irrigation, highlights the unintended consequences of well-intentioned climate interventions. Carbon credit systems function by allowing entities to offset their emissions through investments in nature-based solutions such as tree plantations. The premise is that trees absorb carbon dioxide over their lifespan, thus mitigating atmospheric carbon levels. While this method appears effective on paper, it presents a paradox in regions already grappling with water stress. Arid and semi-arid landscapes, which are often targeted for afforestation projects, do not naturally support dense tree cover due to their limited water availability. Introducing large-scale plantations in such regions inadvertently diverts precious groundwater resources to sustain non-native tree species, intensifying water shortages for local communities. In effect, the commodification of carbon sequestration leads to an inadvertent export of groundwater resources from water-stressed areas to industrialised nations purchasing carbon credits.
A similar paradox is evident in the adoption of solar-powered irrigation, which, while reducing dependence on fossil fuels, has led to unchecked groundwater extraction. The transition from diesel to solar-powered pumps has enabled farmers to access groundwater without operational costs, leading to excessive extraction in agrarian regions. The lack of regulatory oversight on groundwater usage has turned this technological shift into an environmental hazard, with groundwater tables declining at alarming rates. The overuse of solar pumps demonstrates how climate solutions, when implemented without an integrated approach, can exacerbate ecological vulnerabilities instead of mitigating them.
To prevent such unintended consequences, carbon credit policies must incorporate a holistic approach that factors in water security. Instead of singularly focusing on afforestation, climate mitigation strategies should integrate agroforestry, wetland restoration, and sustainable water management practices that enhance carbon sequestration without depleting local resources. Policymakers must also ensure that incentives for carbon trading do not prioritise short-term gains at the cost of long-term environmental stability. A well-regulated carbon market should promote responsible water usage and include stringent checks on afforestation projects to prevent undue stress on local ecosystems. Cross-sectoral collaboration between climate, water, and agricultural policies is imperative to ensure that the transition to a low-carbon economy does not come at the expense of essential natural resources. As India positions itself as a key player in the global carbon market, integrating water security into its sustainability agenda is no longer optional—it is a necessity.
