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

7 Dec 2023

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.

Green Credit program

  • 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.

Carbon Credit:

  • It represents the amount of Carbon Dioxide that has either been removed from the atmosphere or recycled. It generally represents the reduction in greenhouse gas emissions. 
  • Its concept originated from the Kyoto Protocol.

Earlier Available Practice: 

  • Trade in Carbon Credits: Such a market-based system for carbon already exists, at both the national and international levels, that allows trade in carbon credits. 
  • Claim for Credits: Companies, or nations, can claim carbon credits if they take action to reduce their carbon footprint. 
    • These credits can be traded for money. 
    • Companies unable to achieve their emission standards pay to buy these credits and improve their performance.


News Source:
The Indian Express

 

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UDAAN PRELIMS WALLAH
Comprehensive coverage with a concise format
Integration of PYQ within the booklet
Designed as per recent trends of Prelims questions
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