Reducing or creating poverty? Analyzing livelihood impacts of forest carbon projects with evidence from India

Abstract

Forest carbon projects, in addition to climate mitigation and conservation benefits, are expected to improve local livelihoods and contribute to poverty alleviation across developing countries. Despite substantial investments over last decade, there is limited empirical evidence on the livelihood impacts of these projects especially across different socioeconomic categories.This paper aims to contribute to this knowledge gap through an analysis of the livelihood impacts across small, medium and large categories of participating farmers in a forest carbon project from the state of Haryana in India. Data from 107 households have been analysed to study the impacts in terms of foregone crop, fodder and fuel wood benefits. The analysis suggests that the project has adversely affected the livelihoods of all three categories of farmers. However, small and marginal farmers are the most distressed due to their low incomes, asset base and risk-bearing capacities.It raises critical project design issues such as binding land use, delayed accrual of benefits, static opportunity costs and displacement of existing economic activities, which have serious livelihood and equity implications. Unless these issues are addressed and strong safety nets are provided, forest carbon projects might create more poverty than wellbeing for marginal communities.