Centre proposes draft rules for Green Credit Programme

The Union Ministry of Environment, Forests and Climate Change has notified draft rules for ‘Green Credit’, an incentive that individuals, farmer-producer organisations (FPO), industries, rural and urban local bodies, among other stakeholders, will be able to earn for environment positive actions. 

The ministry proposed the draft Green Credit Programme Implementation Rules 2023 in a notification issued June 26, 2023 and has invited for objections and suggestions within 60 days. 

By ‘green credit’, the government means a singular unit of an incentive provided for a specified activity, delivering a positive impact on the environment. 

The activities include:

1. Tree plantation-based green credit: To promote activities for increasing the green cover across the country through tree plantation and related activities

2. Water-based green credit: To promote water conservation, water harvesting and water use efficiency / savings, including treatment and reuse of wastewater

3. 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

4. Waste management-based green credit: To promote sustainable and improved practices for waste management, including collection, segregation and treatment

5. Air pollution reduction-based green credit: To promote measures for reducing air pollution and other pollution abatement activities

6. Mangrove conservation and restoration-based green credit: To promote measures for conservation and restoration of mangroves

7. Ecomark-based green credit: To encourage manufacturers to obtain ‘Ecomark’ label for their goods and services

8. Sustainable building and infrastructure-based green credit: To encourage the construction of buildings and other infrastructure using sustainable technologies and materials

Through the programme, thresholds and benchmarks will be developed for each green credit activity. 

The Indian Council of Forestry Research and Education shall be the administrator of the programme. The institute will develop guidelines, processes and procedures for implementation of the programme and develop methodologies and standards, registration process and associated measurement, reporting and verification mechanisms. 

The green credits will be tradable and those earning it will be able to put these credits up for sale on a proposed domestic market platform.

It 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 of various stakeholders. 

“Apart from incentivising individual / community behaviour, the Green Credit Programme will encourage private sector industries and companies as well as other entities to meet their existing obligations, stemming from other legal frameworks, by taking actions which are able to converge with activities relevant for generating or buying green credits,” the draft said. 

Agriculture scientist GV Ramanjaneyulu from the Centre for Sustainble Agriculture said the guidelines bring together mechanisms to quantify and support ecosystem services together and would be of great help for organic farmers and FPOs.

“It’s a first of its kind instrument that seeks to value and reward multiple ecosystem services to allow green projects to achieve optimal returns beyond just carbon. In fact, the scheme will allow project proponents to also access carbon markets additionally,” he said. 

But experts also expressed concerns of greenwashing through such market based mechanisms.

“In the case of carbon reductions, market-based mechanisms have proved too incremental at a time when we need urgent reduction of emissions. Expanding this method to other ecosystem and pollution areas creates a strong risk of greenwashing — the appearance of doing a lot without actually achieving much beneficial impact,” said Avantika Goswami, programme manager, climate change, Centre for Science and Environment.

It also raises serious questions about how rigour of monitoring will be maintained and who should take the responsibility for pollution reduction and biodiversity savings, she added.

She also pointed out that the capacity that will have to be built to monitor these systems and prevent fraud will use resources that could have been diverted to more transformational pollution control and biodiversity protection efforts, regulated and mandated by the government.

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