New Delhi, March 4 -- There was a palpable and building sense of unease at the residence of Arun Dutta Kadale upon enquiring about his mahogany plantation. Spread over 1 hectare (ha) at Navingar village in Maharashtra's Pune district, the plantation is part of an agroforestry project that generates carbon credits. Kadale hopes to earn Rs 61,750 a year from these carbon credits.

For the uninitiated, carbon credits are issued against activities that either abate (such as by using an efficient cookstove or lighting system) or remove (for instance, by planting trees) greenhouse gases (GHGs) from the atmosphere. Each tonne of carbon dioxide or the equivalent GHGs (CO2e) avoided or removed generates one carbon credit, which is then bought by b...