What are green credits?
India’s Draft for Green Credits: A Novel Way to Reward Environmental Initiatives
India is taking a pioneering step to introduce a new scheme called the Green Credit Programme (GCP), which aims to incentivize voluntary environmental actions by individuals, communities, businesses, and organizations. The GCP will provide a market-based framework for the issuance and trade of green credits, which are certificates representing a particular level of environmental benefit. The GCP would supplement India’s existing policies and programs to promote renewable energy, energy efficiency, water conservation, waste management, air pollution reduction, and other environmentally friendly activities.
What is the Green Credit Program that India introduced?
The Green Credit Programme is a scheme proposed by finance minister Nirmala Sitharaman in the Union Budget 2023. The initiative is intended to measure environmental acts and then monetize them in the form of green credits, which can be sold online, similar to carbon credits.
The draught ‘Green Credit Program (GCP)’ implementation regulations 2023, which detail the GCP’s objectives, scope, sectors, activities, eligibility criteria, verification procedure, registration system, and market platform, have been notified by the Ministry of Environment, Forest, and Climate Change (MoEFCC).
The main objectives of the GCP are:
To establish a market-based mechanism for providing environmental incentives in the form of green credits to individuals, farmer producer organisations, cooperatives, forestry enterprises, sustainable agriculture enterprises, urban and rural local governments, private sectors, industries, and organisations.
To build a broad movement around environmental-friendly actions and to implement the vision of “Mission LiFE” (Lifestyle for Environment) through pro-planet individuals and organisations to attain India’s net-zero objective of 2070.
The GCP will cover eight sectors, namely:
1) Increasing the green cover through tree plantation across the country
2) Promoting water conservation, water harvesting, and water use efficiency/savings, including treatment and reuse of wastewater
3) Promoting natural and regenerative agricultural practices and land restoration to improve productivity, soil health, and nutritional value of food produced
4) Waste management
5) Reducing air pollution
6) Conservation and restoration of mangroves
7) Sustainable building and infrastructure
8) Any other sector or activity as may be notified by the central government
The GCP will adopt a phased and iterative approach for implementation. In the initial phase, two to three activities from the selected sectors will be considered for designing and piloting the program and then more activities will be added in subsequent phases.
How will the Green Credit Programme work?
1) The MoEFCC will inform each sector’s qualified activities for earning green credits, as well as their quantification methodology and verification protocols.
2) Individuals or companies engaging in qualified activities will apply for registration with the National Green Credit Registry (NGCR), an online platform for issuing and recording green credits. Based on their environmental performance, the NGCR will review applications and give green credits to registered persons or companies. The
4) MoEFCC defines one green credit as one unit of environmental benefit.
5) In addition, the NGCR will keep a market platform where green credits can be sold at a price determined by supply and demand. Buyers of green credits can use them to meet their existing legal responsibilities or to offset their environmental damage.
6) The MoEFCC will monitor and assess the GCP’s implementation and will issue monthly reports on its results and impacts.
What are the benefits of the Green Credit Programme?
The GCP has multiple benefits for India’s economy, environment, and society. Some of these benefits are:
The GCP will assist India in meeting its climate goals of reducing emissions intensity by 33-35% from 2005 levels by 2030, attaining 500 GW of renewable energy generation by 2030, and reaching net-zero emissions by 2070.
The GCP will help India make the green transition by increasing renewable energy, producing green hydrogen, improving water efficiency, reducing waste creation, reducing air pollution, and expanding natural capital.
The GCP will encourage private sector investment and innovation in low-carbon technology and solutions, thereby opening up new markets and opportunities for firms and entrepreneurs.
Farmers, communities, and companies that implement sustainable practices such as afforestation, agroforestry, organic farming, waste management, and biogas generation would benefit from the GCP.
The GCP will improve India’s environmental quality by lowering air pollution, improving soil health, preserving water resources, maintaining biodiversity, and boosting resilience to the effects of climate change.
The Green Credit Programme is a novel way to reward environmental initiatives by various stakeholders in India. The scheme will create a competitive market-based approach for green credits thereby incentivising voluntary environmental actions. The scheme will also complement India’s existing policies and programs for promoting green growth and combating climate change. The GCP will demonstrate India’s global leadership in environmental sustainability and contribute to the global efforts to limit the rise in global temperature to well below 2°C above pre-industrial levels.