It is a first-of-a-kind market-based instrument designed to incentivise individuals, industries and local bodies for their voluntary environmental actions across different sectors
On October 13, 2023, the Union Ministry of Environment, Forests and Climate Change notified the ‘green credit’ programme. It is included under the government’s ‘Lifestyle for Environment’ or ‘LiFE’ movement.
In its initial phase, the green credit programme will focus on two key activities: Water conservation and afforestation.
So, what is the Green Credit Programme? It is a first-of-a-kind market-based instrument designed to incentivise individuals, industries and local bodies for their voluntary environmental actions across different sectors.
The programme is a domestic voluntary market mechanism, where green credit serves as a singular unit of credit provided for each specified activity. 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.
It identifies eight 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.
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 the implementation of the program and develop methodologies and standards, registration process and associated measurement, reporting and verification mechanisms.
The programme aims to leverage a competitive market-based approach and incentivise voluntary environmental actions by various stakeholders. 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.
But there are also some concerns raised by different experts about greenwashing through this market-based mechanism. They have called for establishing robust methodologies to ensure the programme’s effectiveness and prevent misuse.
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