Introduction
In a significant development, the Ministry of Environment, Forest and Climate Change, Government of India, has introduced the draft ‘Green Credit Programme (GCP)’ implementation rules for 2023. This initiative, announced in the 2023-24 Union Budget, aims to harness a competitive market-based approach to incentivize voluntary environmental actions by various stakeholders. The GCP is positioned as a mechanism complementing the domestic Carbon Market, expanding its focus beyond CO2 emission reductions to include various environmental obligations. This paper provides an in-depth exploration of the Green Credit Programme, highlighting its objectives, activities, administration, significance, concerns, and potential ways forward.
Understanding the Green Credit Programme
What is the Green Credit Programme?
The term ‘Green Credit’ refers to a singular unit of incentive provided for a specific activity that delivers a positive impact on the environment. The GCP operates as a complementary mechanism to the domestic Carbon Market, extending its scope to incentivize sustainable actions beyond CO2 emission reductions. Tradable green credits can be earned through various activities, and participants can sell these credits on a proposed domestic market platform.
Green Credit Activities
- Tree Plantation-Based Green Credit: To promote activities for increasing the green cover across the country through tree plantation and related activities.
- Water-Based Green Credit: To promote water conservation, water harvesting, water use efficiency/savings, including treatment and reuse of wastewater.
- Sustainable Agriculture-Based Green Credit: To promote natural and regenerative agricultural practices and land restoration to improve productivity, soil health, and nutritional value of food produced.
- Waste Management-Based Green Credit: To promote sustainable and improved practices for waste management, including collection, segregation, and treatment.
- Air Pollution Reduction-Based Green Credit: To promote measures for reducing air pollution and other pollution abatement activities.
- Mangrove Conservation and Restoration-Based Green Credit: To promote measures for conservation and restoration of mangroves.
- Ecomark-Based Green Credit: To encourage manufacturers to obtain the ‘Ecomark’ label for their goods and services.
- Sustainable Building and Infrastructure-Based Green Credit: To encourage the construction of buildings and other infrastructure using sustainable technologies and materials.
Administration
The Indian Council of Forestry Research and Education (ICFRE) will serve as the administrator of the programme. It will develop guidelines, processes, and procedures for the implementation of the GCP. This central authority aims to streamline the programme’s administration and ensure consistency in its execution.
Significance
The Green Credit Programme has the potential to encourage private sector industries, companies, and other entities to fulfill their existing environmental obligations. The guidelines provide mechanisms to quantify and support ecosystem services, offering significant benefits for organic farmers and Farmer Producer Organizations (FPOs). The GCP, being a first-of-its-kind instrument, values and rewards multiple ecosystem services, allowing green projects to achieve optimal returns beyond just carbon.
Concerns Regarding Green Credit Mechanism
Greenwashing
Experts express concerns about the market-based mechanism of green credits potentially leading to greenwashing. Greenwashing involves making false or exaggerated claims about environmental sustainability to create a positive image without delivering significant environmental benefits. There is a fear that entities may engage in tokenistic activities to generate green credits without making substantial efforts to address environmental issues.
Effectiveness and Resource Allocation
There are concerns about the effectiveness of the GCP in achieving urgent emissions reductions. Some experts worry that resources might be allocated more towards monitoring and fraud prevention than transformative efforts directed by the government.
Evaluating the Green Credit Programme
Methodology and Standards
To ensure the success and viability of the GCP, it is crucial to have a robust methodology and standards. Careful assessment and implementation are necessary, particularly regarding tree plantation and afforestation. Unresolved forest ownership and governance rights, ecological and biodiversity challenges, and global critiques of carbon credit schemes need to be considered in the evaluation.
Internal Discussions and Public Consultations
Internal discussions and public consultations are essential to address unresolved issues and concerns. A transparent and inclusive approach will facilitate the development of a Green Credit System that is both effective and widely accepted.
Conclusion
The Green Credit Programme in India represents a pioneering effort to incentivize environmental actions through a market-based approach. While its potential benefits are significant, concerns related to greenwashing and resource allocation need to be addressed. A careful evaluation of the methodology, standards, and overall implementation is crucial for the success of the programme. Internal discussions and public consultations will play a pivotal role in refining the Green Credit System and ensuring its alignment with broader environmental goals. The GCP has the potential to be a transformative instrument in promoting sustainability, provided it is executed with diligence and consideration for environmental complexities.
