The Green Credit Programme (GCP), announced in the 2023-24 Union Budget by the Ministry of Environment, Forest and Climate Change, Government of India, is a new draft implementation designed to incentivise voluntary environmental actions through a competitive market-based approach.
The Concept of Green Credit
‘Green Credit’ refers to a single unit of incentive granted for a specified activity that generates a positive environmental impact. The GCP is intended to augment the domestic Carbon Market which primarily targets CO2 Emission reductions. However, the Green Credit System expands focus to other environmental obligations, propelling sustainable actions from various stakeholders including companies, individuals, and local bodies. Tradable on a proposed domestic market platform, green credits can be earned and then sold.
Potential Activities Under the Green Credit Programme
This programme aims to promote diverse eco-friendly activities. They include Tree Plantation-Based Green Credit to increase the country’s green cover; Water-Based Green Credit for water conservation and efficiency; Sustainable Agriculture-Based Green Credit to encourage natural and regenerative agricultural practices; Waste Management-Based Green Credit for better waste management practices; Air Pollution Reduction-Based Green Credit to curb air pollution; Mangrove Conservation and Restoration-based Green Credit; Ecomark-Based Green Credit for manufacturers producing eco-friendly goods and services; and Sustainable Building and Infrastructure-based Green Credit to propel the use of sustainable technologies and materials. Benchmarks will be set for each Green Credit activity.
Administration of the Green Credit Programme
The Indian Council of Forestry Research and Education (ICFRE) will administer the Green Credit Programme. This body is responsible for developing guidelines, processes, and procedures to ensure smooth implementation.
The Importance of the Green Credit Programme
The GCP encourages private sector industries, companies, and other entities to meet their existing obligations stemming from other legal frameworks. These guidelines bridge mechanisms to quantify and support ecosystem services together, which benefit organic farmers and FPOs. This unique tool values and rewards multiple ecosystem services, enabling green projects to secure optimal returns beyond just carbon.
Concerns Regarding Green Credit Mechanism
Despite the potential benefits, some concerns have been raised. Critics worry that the market-based mechanic of green credits may encourage Greenwashing. Here, entities might make false or exaggerated claims regarding environmental sustainability to create a positive image without yielding significant environmental advantages. There are also apprehensions over the effectiveness of these mechanisms in securing urgent emissions reductions and resource allocation for monitoring and fraud prevention.
The Way Forward
It’s crucial to establish robust methodology and standards and devise strategies to nurture enough demand for green credits, ensuring market viability and stability. The Green Credit System needs careful assessment and implementation, 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. Internal discussions and public consultations are critical in addressing these aspects.
Previous Year Question on Carbon Credits
A question about carbon credits appeared in the 2011 UPSC Civil Services Examination Prelims. The question was “Regarding “carbon credits”, which one of the following statements is not correct?”. The incorrect option was (d) “Carbon credits are traded at a price fixed from time to time by the United Nations Environment Programme.”, explaining that emission trading allows countries with surplus carbon emission units to sell this excess capacity to countries exceeding their targets.
Last Modified: February 20, 2024