Green Credit Program (GCP): What is it? And Its Significance

Context: Recently, the Indian Prime Minister launched the Green Credit Program.

• During COP28 in Dubai, he emphasized that the Green Credit program surpasses the commercial nature of carbon credits.

What is the Green Credit Program?

• Launched by: The Ministry of Environment, Forest and Climate Change in October 2023.
  • The Green Credit program was first announced in the 2023-24 Union Budget to incentivize voluntary environmental actions of various stakeholders.
• Administered by: The Indian Council of Forestry Research and Education (ICFRE).
• Focus on: Generating Green Credits through plantation on degraded wasteland.
  • Its initial phase focuses on water conservation and afforestation.

• A Market-based Approach: It is an effort to create a market-based incentive for different kinds of environment-positive actions, not just for carbon emission reductions.
  • This Green Credit program attempts to use this market-based mechanism for other environmental actions, like water conservation or soil improvements. 
• CSR Obligations: As a starting point, the private companies would buy these green credits as part of their CSR obligations.
  • The Companies Act, 2013 provides for Corporate Social Responsibility (CSR). Companies are required to spend a minimum of 2% of their net profit over the preceding three years as CSR.
• Measurement on Performance: Methodologies and standards to measure and verify such actions are still being developed. The market would also need to be developed. 
• Significance: Green Credit program has a wider reach as it could benefit both individuals and communities.
  • At COP28, the Indian PM offered the concept to the international community, in the hope of creating a market for green credits at an international level.
    • While the carbon markets focused more on industry and corporations.
  • Surpassing the Carbon Credits: The initiative has the potential to achieve optimal returns beyond just carbon.
  • Achievement towards Sustainable Development Goals (SDGs): It would be a step towards achieving 
    • SDG 12: Responsible Consumption and Production
    • SDG 13: Climate Action
    • SDG 15: Life on Land
• Concerns: The initiative may lead to Greenwashing.
  • Greenwashing is the act of making false or misleading statements about the environmental benefits of a product or practice.
  • Experts are also raising concerns about the effectiveness of the mechanisms, monitoring, and verification.

Know more about the Green Credit Scheme here.

News Source: The Indian Express