Green Credit Programme (GCP): Aim, Features, and Concerns

Context

Parcels of degraded forest land close to 3,853 hectares have been identified by 10 states to be made available to earn and potentially trade green credits.

• Union Environment Ministry announced the rules for its Green Credit Programme (GCP) Chhattisgarh and Madhya Pradesh alone account for up to 40% of the available forest land.

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The Green Credit Programme (GCP)

• Green Credit Programme Launched by: The Ministry of Environment, Forest and Climate Change in line with the  Lifestyle for Environment (LiFe) movement at the recent COP28 in Dubai.
• Administered by: The Indian Council of Forestry Research and Education (ICFRE).
• Green Credit Programme Aim: To  Generate Green Credits through plantation on degraded wasteland with its initial phase focusing on water conservation and afforestation.
• Green Credit Programme Features: 
  • Creation of a land bank: Registered and approved entities ( individuals, groups, public and private sector units) can pay to finance afforestation projects in specific tracts of degraded forest and wasteland. 
  • State forest departments will carry out the actual afforestation.
  • Each planted tree would be worth one ‘green credit’ after two years of planting and an evaluation by the International Council of Forestry Research and Education (ICFRE). 
  • Offsetting mechanism: Companies can then use these green credits to offset some of their obligations under India’s compensatory afforestation laws.
  • A Market-based Approach: The Green Credit Programme creates a market-based incentive for environment-positive actions like water conservation or soil improvements, apart from just carbon emission reductions.

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Concerns Regarding Green Credit Programme

• Increased Risk of more forest land diversion: The Green Credit Programme facilitates the creation of land banks by linking them to compensatory afforestation activities, which could enable more diversion of forest land to commercial entities.
• No economies of scale: The Indian market being undeveloped with a restricted number of participants could lead to inefficient transactions due to an unbalance in the number of buyers and sellers.
• Market volatility: Green Credit Programme would cause the value of green credits to fluctuate in value and result in businesses facing uncertainties related to their environmental investments. 
  • It would slow down the programme’s efficiency, with delays in receiving credit and receiving revenues from trades, and affect its success. 
• Risk of Greenwashing:  For efficient administration of the scheme, stronger regulations are needed to guarantee ongoing monitoring and validation of claims, which would otherwise risk mere greenwashing.
• No standard unit of measurement: The green credit system does not yet have a standard unit of measurement, unlike the carbon market (prices a standard unit per tonne of carbon emitted ), as it is complicated to determine as they are accrued from various activities and across different sectors. 

Also Read: Green Credit Rules May Damage Forests: Say Experts