Central Idea

• The Ministry of Environment has released a draft notification outlining a proposed ‘Green Credit Scheme’ to provide incentives for various environmental activities.
• The scheme aims to encourage actions such as afforestation, water conservation, waste management, and addressing air pollution by allowing individuals and organizations to generate tradable ‘green credits.’

What is Green Credit Programme (GCP)?

• GCP will be launched at the national level, utilizing a competitive market-based approach to encourage voluntary environmental actions.
• The scheme will incentivize individual and community behaviors, as well as motivate private sector industries, companies, and other entities to fulfill their existing obligations.
• By participating in activities that generate or allow the purchase of green credits, stakeholders can align with the objectives of the scheme.

Creating Supply and Demand for Green Credits

• The government’s immediate focus is to create a supply of green credits through voluntary actions.
• The subsequent step involves introducing laws or regulations to incentivize companies and organizations to purchase credits, thereby creating demand.
• Unlike carbon markets that primarily trade greenhouse gas emissions, the Green Credit Scheme accounts for a broader range of actions, making it more complex.

Sectors for Green Credit Generation

The notification outlines following sectors or activities that qualify for generating green credits:

• Tree plantation-based green credit: Promotes activities to increase green cover through tree plantation and related initiatives.
• Water-based green credit: Encourages water conservation, water harvesting, efficient water use, and wastewater treatment and reuse.
• Sustainable agriculture-based green credit: Promotes natural and regenerative agricultural practices, land restoration, and improvement of productivity, soil health, and nutritional value.
• Waste management-based green credit: Fosters sustainable waste management practices and improvements in waste handling.

Uniqueness and Complexity of the Scheme

• The proposed Green Credit Scheme covers a wider range of actions compared to similar initiatives worldwide.
• Unlike existing schemes, this program accounts for diverse activities, making its implementation and accounting mechanisms more intricate.

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