Green Credit Programme: An Opportunity or a Challenge

Syllabus: GS 3/Environment 

In Context

• The Environment Ministry issued further guidelines on its Green Credit Programme (GCP), two months after it had prescribed rules governing the first initiative, afforestation.
  • Modifying the rules will prioritise the restoration of ecosystems over mere planting of trees.

About Green Credit Programme

• The Green Credit Programme was announced by the Environment Ministry in October 2023
  • It is an initiative within the governments Lifestyle for Environment or LIFE movement.
• The GCP programme presents itself as an “innovative, market-based mechanism” to incentivise “voluntary actions” for environmental conservation.
• Its goal is to lay an emphasis on sustainability, reduce waste and improve the natural environment. 
• Under this, individuals, organisations and companies — public and private — would be encouraged to invest in sectors ranging from afforestation, water conservation, stemming air-pollution, waste management, mangrove conservation and in return be eligible to receive ‘green credits.’
• An autonomous body of the Ministry, the Indian Council of Forestry Research and Education (ICFRE), is in charge of administering the programme. They will define methodologies to calculate ‘green credits’ that result from the activities prescribed.
  •  They will also manage a trading platform whereby such credits could be traded.

Developments 

• In February 2024 , the Ministry prescribed the rules governing the first of these initiatives — afforestation. 
• Broadly, companies, organisations and individuals could offer to pay for afforestation projects in specific tracts of degraded forest and wasteland. 
• The actual tree planting would be carried out by the State forest departments. 
• Two years after planting and following an evaluation by the ICFRE, each such planted tree could be worth one ‘green credit.’ 
• Those who are successful in fulfilling the criteria will be given an estimate of the costs involved in afforestation. 

Challenges 

• The scientific rationale behind assigning ‘credits’ based on the quantity of trees is unclear.
• There is criticism that these initiatives may be used to circumvent existing laws, particularly those that deal with forest conservation. 
• There is a risk of ‘Permanence’ of carbon credits, which means that an individual or a farmer may cut the trees after getting payment for the carbon credit, or the trees may be burned in a fire or attacked by pests, or the trees may not grow at the rate required, given the degraded or poor fertility status of soils and erratic rainfall. 
•  The activities may or may not lead to real, measurable environmental benefits, particularly carbon sequestration benefits, contributing to the mitigation of climate change.

Conclusion  and Way Forward 

• Operationalization of GCP on a large scale requires the establishment of institutional arrangements, for which the government has selected the Indian Council of Forestry Research and Education (ICFRE) as the nodal agency, with a steering committee and a technical committee. 
• Successful implementation requires developing a rigorous methodology to measure, verify, and report environmental benefits. 
• GCP is a market-based mechanism, which means there must be demand for the green credits, such as tonnes of carbon sequestered through tree planting. 
• More importantly, there must be an attractive price for the green carbon credits.
•  The programme was currently in a “pilot project” mode and questions such as how shrubs and grasses could be quantified in terms of green credits were still being worked out.