Lucknow: Green finance initiative in India, the Uttar Pradesh government has started advance payments to farmers for carbon credits they are expected to earn five years from now through agroforestry. The move aims to incentivize farmers to plant and conserve trees by offering them early income for future climate gains.
So far, Rs 48.6 lakh has been disbursed as partial prepayments to 237 farmers who registered under the state Carbon Finance Project in its first phase. On average, farmers have received around Rs 10,000 each. However the remaining amount will only be paid if the trees survive till the credit maturity period.
“Farmers are being encouraged to plant saplings today for a greener tomorrow. This is the country’s first-ever initiative where advance carbon credit payments are being made,” said an official from the forest department. The scheme’s base year is 2024-25, meaning only trees planted after this period will qualify.
Already 25,140 farmers have registered, and a second phase of the project has kicked off with registrations underway. Under the plan, a farmer will receive payments for 30 years for maintaining the same tree plantation turning conservation into a stable source of income.
The carbon credits are generated from trees absorbing CO₂, with one metric tonne equaling one credit priced at $6 (Rs 500 approx) per five years. The project is being implemented in partnership with TERI and VNV Advisory Services, with validation teams deployed to ensure transparency.
Advance payments have already begun in areas like Dudhwa Tiger Reserve, where Rs 25 lakh has been sent for disbursement, and Rs 26.15 lakh more is being processed for 408 farmers.
The initiative, first rolled out in six forest divisions including Lucknow, Gorakhpur, and Bareilly, now covers 13 regions, expanding to Ayodhya, Jhansi, Kanpur, and more. Officials say this could be a game-changer for both climate action and rural livelihoods in India.