New Delhi: Individuals, industries, farmer producer organizations, municipalities and village panchayats, among other entities, will soon be able to earn “green credits” for eco-friendly actions such as planting trees, conserving water, managing waste and reducing air pollution. Will be ThePrint has learnt.
With a view to encourage voluntary environmental actions, green credits will be traded on the proposed domestic market platform.
Three months after Union Finance Minister Nirmala Sitharaman’s announcement in the Budget for 2023-24, the Ministry of Environment, Forest and Climate Change (MoEFCC) has prepared the draft framework to launch India’s first Green Credit Program (GCP).
“The idea is to create a market-based mechanism for undertaking environment-friendly activities by providing additional incentives in the form of green credits. Each green credit will be assigned a monetary value based on the activity for which it has been earned,” a senior environment ministry official told ThePrint on condition of anonymity.
Government sources told ThePrint, “The draft outline for the GCP has been sent to all stakeholder ministries last week for consultation and to get their suggestions before it is notified.”
MoEFCC has proposed that a steering committee headed by the environment secretary and comprising officials from relevant ministries or departments, domain experts and industry associations will oversee the implementation of the GCP.
how will it work
The Environment Ministry has identified eight select activities under the Environment (Protection) Act for which green credits can be earned.
These include tree plantation; water conservation, water harvesting and water use efficiency/savings; promoting natural and regenerative farming practices; waste management; reduction of air pollution; mangrove conservation and restoration; ecomark-based green credits; and construction of buildings and other infrastructure using sustainable technology and materials.
Individuals, private sector, industries, farmer groups, forest enterprises, urban local bodies (ULBs), districts and gram panchayats can earn green credit for undertaking these specified activities. In case of violation of the provisions contained in the notification, these institutions will also have to pay environmental compensation.
The draft notification states that the GCP administrator will collect the environment compensation and deposit it in a separate dedicated account. This fund will be used for undertaking market stabilization measures along with other activities related to the implementation of the GCP as approved by the Steering Committee.
Explaining how this would work, the environment ministry official was earlier quoted as saying, “For example, a person who plants trees in an area can earn green credits, which he can trade after verification by the steering committee.” Can sell on the platform. Similarly, a ULB can earn green credit for building infrastructure for waste management.”
Each Green Credit will have a monetary value.
“Green credits can be purchased by environment-conscious companies or industries to avail loans at affordable interest rates for eco-friendly interventions. The trading platform will connect all the players who are suppliers of green credits.
Thresholds and benchmarks will be developed for each green credit activity/process for generating and issuing green credits.
“The allocation of one unit of GC in respect of each activity will be determined on the basis of achievable environmental outcome, commonality of resource requirement, commonality of scale, scope, size and other relevant parameters,” the official said.
The government will also develop and establish digital processes for GCP, including self-assessment of eligible green credit activities, registration of projects, issuance of green credits and monitoring of performance.
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role of steering committee
According to the draft notification, the steering committee will not only approve the procedures for institutionalizing the GCP, but also approve its rules and regulations and make recommendations to the central government for issuing Green Credit Certificates.
It will also determine the type and amount of fees and charges for the purpose of meeting the cost and expenses of implementation of the GCP.
The Indian Council of Forestry Research and Education (ICFRE) will be the administrator of the GCP and will manage, monitor and operate the entire programme. It will register green credits and maintain records of all transactions and ensure that business is conducted with requisite discipline.
ICFRE will constitute technical or regional committees for each separate activity to facilitate registration of GC projects and developing methodologies and standards and procedures for grant of GCs.
“The technical committee will decide the value of green credits to be given on the basis of environmental action taken by individuals, companies, ULBs and gram panchayats,” the ministry official said.
ICFRE will also issue guidelines for setting up a trading platform for exchange of Green Credit Certificates with the approval of the Steering Committee.
trading platform
Trading platform for exchange of Green Credit Certificates to be set up by the Trading Service Provider GCP Admin.
The environment ministry official quoted earlier said that an activity can earn both green credits as well as carbon credits if it helps in the reduction or removal of carbon emissions, which can be sold under the GC market or carbon market, respectively. .
(Editing by Richa Mishra)
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