Climate-conscious Indians tap carbon credits for greener fun

Sonia Sandhu-Torre celebrates her birthday with friends in Udaipur, India, November 2022. Sonia Sandhu-Torre/Handout via Thomson Reuters Foundation

Sonia Sandhu-Torre celebrates her birthday with friends in Udaipur, India, November 2022. Sonia Sandhu-Torre/Handout via Thomson Reuters Foundation

What’s the context?

Start-ups are helping Indians shrink the carbon footprint of their travel, celebrations and online shopping

  • India is one of world's biggest greenhouse gas emitters
  • More well-off Indians are seeking to reduce carbon footprint
  • Greenwashing concerns high in voluntary carbon offset market

CHENNAI, India - For her 50th birthday, Sonia Sandhu-Torre threw a party for family and friends - and promised herself one important gift: a carbon-neutral celebration.

"I had 50 guests who were taking flights and cars to reach the party destination," said Sandhu-Torre, who hosted the bash last month at a palace-turned-hotel in western Rajasthan.

"I wanted to celebrate but was acutely aware of how big the carbon footprint of my party would be. I wanted to do something because I believe that every measure we take now will matter in the future," she explained.

She was able to bag her "perfect present" using Climes, a climate tech start-up that offers individuals and companies the possibility of becoming "climate-friendly" by buying carbon offsets online.

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New businesses like Climes, Lowsoot and WOCE are seeking to grab a share of India's growing sales of carbon credits, sought by climate-conscious consumers who want to green everything from their travel to weddings and online purchases.

Globally, credits worth nearly $2 billion traded on the largely unregulated voluntary carbon market in 2021, almost four times the previous year, with about 500 million credits - representing 500 million tonnes of carbon dioxide emissions - changing hands, according to Ecosystem Marketplace. 

India - which has become one of the world's biggest greenhouse-gas emitting nations but aims to reach net-zero emissions only by 2070 - is slowly gaining ground in this market.

Besides the cake-cutting, fancy dress and dancing at Sandhu-Torre's party, guests enjoyed a presentation on how carbon credits work and were encouraged to do their bit to reduce the celebration's climate-heating emissions.

Their gift hampers contained QR codes linking to the Climes website where they could easily offset a share of the party's emissions by buying carbon credits that support agro-forestry, land restoration or technology that converts waste to energy.

"The process was seamless, and many of my guests chose to donate to forestry projects, with everyone being able to track the projects they had put their money in," Sandhu-Torre said.

"It was a conversation starter, with many guests wanting to know more since there are lots of scams around this."

'A black hole'

When Tamarind Chutney, a sustainable clothing brand, decided to offset some of the carbon generated along its supply chain, it struggled with how.

"We were forced to hit pause after a year of research because we could not find a transparent solution," said 29-year-old co-founder Tanvi Bikhchandani.

"We needed to know where the money was going, but everything looked like a black hole. Most projects advertised carbon offsets as a solution and disregarded the source of emissions, which was disappointing," she said.

Voluntary carbon markets have struggled to win the trust of potential customers like Bikhchandani, with climate campaigners criticising offsets as an easy way out for polluters that want to avoid cutting their own emissions by paying others to do so.

"A tonne of carbon emitted will always have higher impact than a tonne absorbed or reduced," said Khaled Diab, communications director at Carbon Market Watch, a nonprofit that works on fair carbon pricing to achieve zero-carbon societies.

Tanvi Bikhchandani (right) and Charanya Shekar, founders of clothing brand Tamarind Chutney pose for a picture in India

Tanvi Bikhchandani (right) and Charanya Shekar, founders of clothing brand Tamarind Chutney pose for a picture in India. Tanvi Bikhchandani/Handout via Thomson Reuters Foundation

Tanvi Bikhchandani (right) and Charanya Shekar, founders of clothing brand Tamarind Chutney pose for a picture in India. Tanvi Bikhchandani/Handout via Thomson Reuters Foundation

"This is one of the reasons why carbon credits should not be used for offsetting. Climate action is good, but buying credits should not be seen as a 'get out of jail free card'," he added.

Describing the market as "a bit of a Wild West", Diab said its unregulated nature puts the burden on buyers to appraise the credibility of the carbon credits on offer - a daunting challenge for the majority who are not experts.

"It provides corporations with a powerful greenwashing tool," he said.

India passed a new energy conservation law this month that seeks to establish rules allowing government and industry to earn and trade carbon credits generated by efforts to cut greenhouse gas emissions, starting on a voluntary basis. 

In October, Indian green energy firms and carbon offset providers teamed up to develop a carbon market aimed at helping meet India's energy transition goals, and plan to work with the government to create "robust guidelines" for the market.

Manish Dabkara, president of the newly formed Carbon Markets Association of India, said there had been instances of brands "indulging in greenwashing" - with some, but not all, managing to get away with it, as scrutiny is on the rise.

"Now there is more awareness and transparency in the market," added Dabkara, also the CEO of EKI Energy Services Limited which provides carbon-offsetting services.

So far carbon credits have mainly been a "luxury" product in India, bought by higher-income individuals, but that could shift in line with international trends for wider use, he added.

Generation climate

Bikhchandani of Tamarind Chutney now offers her online customers the option of offsetting the carbon footprint of the clothes they buy using Climes, which has more than 85,000 users since it launched a year back.

"We do our own carbon accounting, and ethical buyers are happy to have this option during check-out. We see this is as one tool for climate action," she said, adding that transparency on how offsets work is key to convincing customers to use them.

Campaigners have also called for more scrutiny in the absence of regulation, pointing to challenges in knowing how much of the money being invested in carbon credits really benefits the climate and is going to local communities.

Aware of such concerns and "green scams", carbon-offsetting platforms are providing geo-spatial data to show on-the-ground progress at forest conservation and land restoration projects and regular updates on the projects they source their credits from, as well as visiting sites to monitor work directly.

Firms trying to build a carbon market in India say "aware consumers" are key to efforts to grow it and curb emissions.

"In most cases, no one wakes up in the morning thinking of climate change - but we are seeing the emergence of a Gen C or 'generation climate' that wants to make a difference," Siddhanth Jayaram, co-founder of Climes, said in an interview.

"This is small enough to do and big enough to matter," he added, referring to buying credits to offset personal emissions.

(Reporting by Anuradha Nagaraj; Editing by Megan Rowling.)

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