ITC breaks into global green big league with its large scale

Social Forestry Project

One of India’s foremost private sector multi business corporation, ITC, has
entered the global green portal in a big way. Its social reforestation scheme in the
severely degraded areas of Khammam in Andhra Pradesh has earned it a
retrospective credit of 57792 certified emission reductions. The CDM (Clean
Development Mechanism) executive board of the United Nations framework
convention on climate change has now registered the world’s first large scale
afforestation project, the entire benefit being passed on to the local tribals.
Consequently, the tribals will effortlessly link into the large pool of carbon credits
traded across the world. Thus private degraded wastelands owned by tribals and
the rural poor will now contribute to the livelihoods of the disadvantaged sections
in 193 villages in Khammam.

The project also makes a very significant contribution by creating a carbon sink
of 3070.19 hectares, which not only helps in sequestration of greenhouse gases
such as CO2, but also creates multiple benefits including a large green cover,
groundwater recharge, conserving in-situ moisture and increase in soil fertility. As
a corollary, the project will also help improve soil and water erosion control
measures in the river Godavari catchment area. And hopefully restore the
dwindling fauna and birds of the region. It should also prove a case for hope as
well as a test case for corporate as well as self help groups working with
marginal farmers and tribals to make use of forest resources. ITC is providing
farmers with financial and technical assistance to implement this Reforestation
project.

This is ITC's 8th registered CDM (Clean Development Mechanism) project, and
contributes to its achievement of being the only company in the world to attain
the major global environmental milestones of being carbon positive, water
positive and solid waste recycling positive.

Social forestry in the global sense

Suddenly, all over the world social forestry is being seen as the new hope on the
horizon, a panacea, as a harbinger of millions of green jobs. According to the
FAO, the good news is that smarter approaches to forest management could
create millions of green jobs that have been lost in the downturn. India has been
at the forefront of this movement with the UN asking other countries to follow the
lead of India for its forest management. Silviculture or forest management leads
to creation of green sinks that tackle carbon emissions and rebalance disturbed
ecosystems brought about by reckless land-use change and land clearings.
Increased investment in forestry could provide jobs in forest management, agro
forestry and farm forestry, improved fire management, development and
management of trails and recreation sites, expansion of urban green spaces,
restoring degraded forests and planting new ones. Which is why India has
included forestry in its economic stimulus plans to spur rural employment.

As well as economic benefits, better forest management could have a larger

positive impact on climate change than any other initiative currently being
planned or considered by world leaders.

Carbon credits and global scenario

The global carbon bazaar is perking up. There is a great opportunity awaiting
India in carbon credit trading which could climb to an estimated $100 billion by
2010. In the new regime, India could emerge as one of the largest beneficiaries
accounting for 25 per cent of the total world carbon trade.

India’s dominance in carbon trading is expected to be driven, not so much by the

domestic industry, but more by its huge tracts of plantation land, estimated to be
over 15 million hectares, much larger than Australia which aims to be a major
player in emission trading by adding 2 million hectare plantation by 2020.

Certified emissions reductions (CERs) are the currency of the clean development
mechanism (CDM). CERs can be used to acquire technology, capital
investments in projects aimed at reducing carbon emissions. Trading carbon
credits is a new mechanism designed to allow firms that fail to meet emission
standards set by the 1997 Kyoto Protocol, to buy credits from other firms that
meet their targets.

The Kyoto Protocol envisages carbon credit trade between countries with ‘carbon
sinks’ (planted forests) and others that produce higher levels of pollution. The
carbon emission reductions market has doubled in volume in the last one year
alone but few of its benefits are reaching the developing countries. India is now
getting aggressive with corporate like ITC leading the pack.

Social forestry in India

Forestry represents the second-largest land use in India after agriculture, but
contributes merely 1 % of GDP. This points to the dormant potential of this
sector. A concerted effort to promote wood plantations in degraded wastelands
in India could potentially change the fortunes of small and marginal farmers and
consequently the opportunities in rural India. Degraded wastelands in the country
are estimated at 60 million hectares by the Planning Commission, out of which
33 million hectares constitute degraded forest lands. By converting these
wastelands into productive and renewable agro-forestry resources, strong
economic multipliers can be unleashed to significantly mitigate the challenges of
livelihood, energy and environmental security.

The Prime Minister’s Council on Climate Change recently unveiled its National
Action Plan. As part of the 8 Missions announced, the National Mission for a
Green India envisages the afforestation of 6 million hectares to enhance forest
and tree cover to 33 %. The Mission will be taken up on degraded forest lands
with an initial corpus of Rs 6000 crores.

Social forestry from ITC has had a strong transformational agenda in aiming to
tap into value-chain based agricultural growth. Bio mass creation can be the
transformational game changer that could impact the lives of the lowliest
marginal farmer. One of the most powerful means of bringing about
transformational change in rural India lies in the relatively untapped agro-forestry
sector, and in its allied areas across the entire wood-based value chain. The
multitude of benefits that social and farm forestry can bring in are directed
translated into sustainable livelihoods across a variety of geographical regions
with low costs.

Today however India imports over US$ 1 billion of wood. Depending on the
regeneration of wood and the changing demand profile, India is likely to face a
wood deficit of 20 to 70 million cubic metres by 2020. Certainly, the case for
agro-forestry is obvious.

Trees are also a valuable source of bio-chemicals. Non-Timber Forest Produce,

also lends itself to medicinal and herbal applications, and is a very important
source of sustenance for forest dependent population. It is estimated that over 75
% of forest export revenue comes from these sources.

Clearly, the societal benefits of agro-forestry outweigh that of many other sectors.
One of the most important is in its role as an instrument of climate change
mitigation. Potentially, by greening even 10 million hectares of degraded forest
lands, nearly 500 million MT of carbon dioxide can be sequestered.

ITC’s Social and Farm Forestry Programme

Afforestation on private wastelands generates significantly higher incomes and
employment in rural and tribal hinterlands, while restoring ecological balance.
Intercropping is encouraged, providing economically vulnerable households with
an assured income and source of nutrition during the gestation period, while
loppings and toppings meet their fuel wood requirements. ITC invested
significantly in research & development to create clonal saplings which are
disease-resistant, grow faster, have higher survival rates and provided these to
small farmers to grow in private wastelands. ITC’s Forestry Programme
currently covers a total area of 90,681 hectares with 365 million saplings
planted and has so far provided 40 million person-days of employment
among the disadvantaged, particularly tribals and marginal farmers.
Significance of ITC's social forestry initiative to the community and to the
environment

Making Markets Work for CSR Has Been the ITC mantra

ITC, an innovative and socially conscious corporate, chose to take on the more
difficult route of mobilising marginal farmers and tribals to plant trees on their
private wastelands rather than importing paper pulp. This strategy implied longer
gestation, substantial investment and considerable management attention in
managing uncertainty and risk. However, it enabled poor and marginalized
farmers to convert their wastelands to pulpwood plantations, creating a sustained
source of income for themselves.

With India struggling to cope with the core issues of food, energy, sustainable
livelihood and environmental security as ITC has shown a quantum impact on the
lives of the poor through its innovative sustainability initiatives.

ITC took a hard look at a simple expedient like biomass creation for wood pulp
that barely uses 4 % of the total wood consumed in India. Trees lend themselves
to multiple commercial applications and are therefore a major potential source of
livelihood creation. In addition, the agro-forestry value chain has the rare
distinction of being able to contribute to augmenting energy capacity and
ecological wealth besides supporting the core needs of food and housing.
As the primary resource for paper based industry, it supports the spread of
education, so crucial for developing economies like ours. With increasing
population, rising incomes and consequent demand for energy, education and
housing including home lifestyle products, the wood-based value chain is well
poised not only as a profitable economic activity but also as a catalyst sector that
promotes sustainability and inclusive growth.

Paper and Paper Product Manufacture From Renewable Plantations

It is abundantly clear that use of paper and paper products will necessarily
increase as a result of the spread of education, commercial and economic
activities as well as to meet the needs of convenience. The use of wood pulp for
the production of paper and paper products will therefore be necessary. What is
important is to ensure such wood pulp is from renewable plantations which
contribute to creating a green cover and sustainable livelihoods.

Agro forestry has multiple benefits. First as a green cover which is one of the
best ways of sequestering carbon and combating the ill effects of climate change.
Trees, as a carbon sink, not only helps mitigate the problems of global warming
but also conserves top soil, retains water and adds to bio diversity. Second, agro
forestry is a very large source of sustainable livelihoods. For example, in wood
pulp based plantations, every hectare of plantation creates approximately 450
person days of employment. The wood-based value chain, including
plantations, has the potential to create sustainable livelihoods for nearly
100 million people.

Therefore, the multiple benefits of agro forestry makes it imperative that

renewable plantations are encouraged to meet the needs of the paper industry.
The low tariff rates for importing wood pulp has led to large scale imports of this
raw material for paper manufacture and in this process has not only led to an
outflow of foreign exchange but have created opportunities for farmers in foreign
lands instead of supporting marginal farmers in India. What is important is to
have policies that encourage the growing of trees through commercial plantations
rather than just restricting the felling of trees. The policy framework of restricting
felling of trees in India together with the low customs duties on wood pulp have
ensured that the paper industry is dependent on imports.

This entire situation could be reversed in favour of Indian farmers and the Indian
economy if policies are designed to support renewable plantations. It would not
only create sustainable livelihoods for tribals and small farmers, but make
wastelands productive and add to economic growth. In addition, the environment
benefits of commercial and renewable plantations will be manifold and emerge
as a meaningful action to combat climate change.

ITC’s Social and Farm Forestry initiatives for renewable plantations have
not only greened over 90,000 hectares of land but also created more than
40 million person days of employment besides providing a competitive
source of woodpulp for the Paperboards and Specialty Papers Division of
ITC

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