To incentivise eco-friendly actions; focus on water conservation and afforestation in initial phase
Photo: iStock The Union Ministry of Environment, Forests and Climate Change on October 13, 2023 notified the ‘green credit’ programme, a first-of-a-kind market-based instrument designed to incentivise individuals, industries and local bodies for their voluntary environmental actions across diverse sectors.
The programme is a domestic voluntary market mechanism, where a green credit serves as a singular unit of a credit provided for a each specified activity. It was announced in 2021 under the government’s ‘Lifestyle for Environment’ or ‘LiFE’ movement. In its initial phase, it will focus on two key activities: Water conservation and afforestation.
“A user-friendly digital platform will streamline the processes for the registration of projects, its verification and issuance of green credits. The Green Credit registry and trading platform, being developed by the Indian Council of Forestry Research and Education along with experts, would facilitate the registration and thereafter, the buying and selling of green credits,” said a statement by the government.
The ministry had proposed the draft Green Credit Programme Implementation Rules 2023 on June 26, 2023 and had invited objections and suggestions within 60 days.
Overall, the rules identified eight sectors for these activities: Tree plantation; water; sustainable agriculture; waste management; air pollution reduction; mangrove conservation and restoration; Ecomark (a government scheme to identify environment-friendly products) and sustainable building and infrastructure.
The green credits will be tradable and those earning them will be able to put these credits up for sale on a proposed domestic market platform.
“The calculation of green credit in respect of any activity undertaken shall be based on equivalence of resource requirements, parity of scale, scope, size and other relevant parameters required to achieve the desired environmental outcome,” the notification said.
The programme was first announced by Union Finance Minister Nirmala Sitharaman in the 2023-24 budget with a view to leverage a competitive market-based approach and incentivise voluntary environmental actions by various stakeholders.
Since then, while the move has been hailed as a paradigm shift from the conventional focus on carbon emissions to a more holistic approach by recognising and incentivising efforts such as water conservation and waste management, experts have also raised concerns of greenwashing through such market based mechanisms and have highlighted the importance of establishing robust methodologies to ensure the programme’s effectiveness and prevent misuse.
The ministry also notified the ‘Ecomark Scheme’, for the labelling of environmentally friendly products. Ecomarks will provide accreditation and labelling for household and other consumer products that meet certain environmental criteria along with the quality requirements of the Indian standards for that product.
The scheme aims to provide a tool for consumers to pursue sustainable consumption patterns as well as to the industry to implement environment-friendly processes or production methods.
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