Innovative Financial Instruments and mechanisms for financing forest restoration and mitigating climate change: select cases from India

Abstract

Climate Change (CC) is universal concern. One of the causes for CC is degradation offorest. World over every minute 22 hectares forest is degraded. Reckonings suggests thatUS$ 11880, funds must be invested every minute to restore the forest.In India Atmospheric pollution has severed in 90’s because of increasedautomobiles and electronic goods. Green car congress reported level of NO2concentration in Delhi ranged 70 - 102 microgram per cm, in 2005. It is argued that theconsumers are capable of meeting part of cost of CC mitigation. Recent survey (Teki,2008) in National Capital Region revealed that 40% of sample preferred to compensatethrough tax on petroleum products, 22 % in investing in forestry bonds, 57% favouredcompulsory investment in bonds. Awareness rate about climate change was 92%, and 88%favoured both technology transitions and economic sanctions for mitigating CC. Evolvinginnovative financing instruments and mechanisms to finance forest restoration andmitigating CC is important.Timber was considered important contribution of forests, as 2% GDP comes toexchequer. NTFPs now considered equally important for forest restoration as 25 – 55% offorest living people survival comes from NTFPs. Forests have innovative financialinstruments like Eco-tourism, to finance forest restoration. Self reliance apart from thegovernment funding and the private funding. Mobilisation of savings, bank finance,creating/strengthening global carbon fund effectively and financing the substitute sectorsare important for restoration of ecological integration and productivity and economic valueof deforested or degraded land. Objectives of paper are: a) to assess level and impact offorest degradation and forest restoration in India, b) to translate carbon pollution level intomitigating CC, b) awareness level of CC in NCR c) measure willingness of consumers tocompensate for CC, and d) evolve innovative financial instruments and mechanisms tofinance sustainable forest restoration in India.