Green Credit Scheme

Context: The Environment Ministry has issued a draft notification detailing a proposed ‘Green Credit Scheme’. About the Green Credit Scheme:

• Objective: 
  •  To create a market-based mechanism for undertaking environment-friendly activities such as afforestation programmes, water conservation by providing additional incentives in the form of green credits.

What are Green Credits?

•  Green credits, also known as carbon credits or carbon offsets, are a mechanism used to mitigate the environmental impact of greenhouse gas emissions.
• A monetary value will be put for each green credit depending on the activity for which it has been earned.
• These credits will be tradable for money on a domestic market platform that is not yet specified.

Who can Earn Green Credit?

• Individuals, industries, farmer-producer organisations, municipalities and gram panchayats, among other entities for undertaking a host of environment-friendly actions like planting trees, conserving water, waste management and reducing air pollution.

Green Credit Programme (GCP): 

• It will be launched at national level to incentivise voluntary environmental actions of various stakeholders.
• It will encourage private sector industries and companies 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.

Working of the programme:

• 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.
• 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.

Governance Structure:

• GCP Administrator:
  • The Indian Council of Forestry Research and Education (ICFRE) will be the administrator of GCP.
  • It 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.
• Steering committee
  • It will be set up to approve procedures for institutionalising the GCP, 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.
• Trading platform for the exchange of Green Credit Certificates: It shall be established by the Trading Service Provider accredited by the GCP Administrator.

Sectors or activities that can qualify for generating Green credits:

• Tree plantation-based green credit to promote activities for increasing green cover through tree plantation and related activities
• Water ­based green credit to promote water conservation
• Water harvesting and water use efficiency/savings, including treatment and reuse of wastewater
• Sustainable agriculture-based green credit to promote natural and regenerative agricultural practices
• Land restoration to improve productivity, soil health and nutritional value of food produced
• Waste management-based green credit to promote sustainable and improved practices.

News Source: The Hindu, the print