Go green, earn green: India’s 1st Green Credit scheme to reward eco-friendly actions by individuals, industries
New Delhi, May 1, 2023
Environment ministry has readied draft contours for rolling out the programme under which entities will earn 'green credit' for activities like planting trees and conserving water.
Individuals, industries, farmers producers organisations, municipalities and gram panchayats, among other entities, will soon be able to earn “green credit” for undertaking a host of environment-friendly actions like planting trees, conserving water, waste management and reducing air pollution, ThePrint has learnt.
Aimed at incentivising voluntary environmental actions, the green credits will be tradable on a proposed domestic market platform.
Three months after Union Finance Minister Nirmala Sitharaman’s announcement in the 2023-24 Budget, the Ministry of Environment, Forest and Climate Change (MoEFCC) has readied the draft contours for rolling out India’s first Green Credit Programme (GCP).
“The idea is to create a market-based mechanism for undertaking environment-friendly activities by providing additional incentives in the form of green credits. A monetary value will be put for each green credit depending on the activity for which it has been earned,” a senior environment ministry official, who wished to not be named, told ThePrint.
“The draft framework for GCP has been sent to all stakeholder ministries last week for consultation and getting their suggestions before it is notified,” government sources told ThePrint.
The MoEFCC has proposed that a steering committee headed by the environment secretary and comprising officials from concerned ministries or departments, domain experts and industry associations will govern the implementation of GCP.
How it will work
The environment ministry has identified eight select activities under the Environment (Protection) Act for which green credit can be earned.
These include tree plantation; water conservation, water harvesting and water use efficiency/savings; promoting natural and regenerative agricultural practice; waste management; air pollution reduction; mangrove conservation and restoration; ecomark-based green credit; and construction of buildings and other infrastructure using sustainable technology and material.
Individuals, private sectors, industries, farmer groups, forest enterprises, urban local bodies (ULB), zila and gram panchayats can earn green credit for undertaking these specified activities. In case of violation of the provisions contained in the notification, these entities will also have to pay environmental compensation.
The draft notification states that the GCP administrator will collect the environmental compensation and deposit it in a separate dedicated account. This fund shall be utilised for taking measures for market stabilisation along with other activities related to the implementation of GCP, as approved by the steering committee.
Explaining how it will work, the environment ministry official quoted earlier said, “For instance, an individual who undertakes tree plantation in an area, can earn green credits, which he can sell at the trading platform after validation by the steering committee. Similarly, a ULB can earn green credit for building infrastructure for waste management.”
There will be a monetary value put to each green credit.
“The green credits can be bought by environment-conscious companies or industries wanting to avail loan at a cheaper rate of interest for undertaking environment-friendly interventions. The trading platform will connect all players, who are suppliers of green credit,” the official added.
Thresholds and benchmarks will be developed for each green credit activity/process for generating and issuance of green credit.
“Allocation of one unit of GC in respect of each activity will be determined based on the environmental outcome achievable, equivalence of resource requirement, parity of scale, scope, size and other relevant parameters,” said the official.
The government will also develop and establish digital processes for the GCP, including self-assessment of eligible green credit activities, registration of projects, issuance of green credits and monitoring performance.
Role of steering committee
According to the draft notification, the steering committee will not only approve procedures for institutionalising the GCP, but also approve its rules and regulations and recommend to the central government for issuance of Green Credit Certificate.
It will also determine the type and amount of fees and charges for the purpose of meeting the cost and expense towards implementation of GCP.
The Indian Council of Forestry Research and Education (ICFRE) will be the administrator of GCP and will manage, monitor and operate the entire programme. It will register the green credits and maintain records of all transactions and ensure that trade happens with requisite discipline.
The ICFRE will constitute technical or sectoral committees for each different activity to facilitate in developing methodologies and standards and processes for registration of GC projects and grant of GCs.
“The technical committee will decide the value of green credit to be awarded based on the environmental action undertaken by individuals, companies, ULBs and gram panchayats,” the ministry official said.
ICFRE will also issue guidelines for the establishment of the trading platform for the exchange of green credit certificates with the approval of the steering committee.
Trading platform
The trading platform for the exchange of Green Credit Certificates shall be established by the Trading Service Provider accredited by the GCP administrator.
The environment ministry official quoted earlier said an activity may accrue both green credits as well as carbon credits if it helps in carbon emissions reduction or removal, which may be sold under GC market or carbon market, respectively.
[The Print]
