Green Credit Programme: A Step Towards Sustainable Future

Published by firstgreen on

The Budget 2023 has made several key announcements regarding India’s green growth agenda. Among these, the establishment of regulations for the Green Credits Programme, governed by the Environmental Protection Act, stands out as a significant initiative. This programme aims to mitigate climate change, build adaptive capacity, improve the overall state of the environment, and encourage environmental conservation.

What is the Green Credit Programme?

The Green Credit Programme is designed to increase energy and resource use efficiency and incentivise environmental services and ecosystem services across various sectors and activities. It aligns with the vision for ‘Lifestyle for Environment (LiFE)’, ‘panchamrit’, and net-zero carbon emissions by 2070. The programme aims to encourage behavioural change and incentivise environmental services and ecosystem services across different sectors and activities that support LiFE, a concept introduced by Prime Minister Narendra Modi at COP26 in Glasgow.

The programme will incentivise sustainability and climate action related to forest and ecosystem services, waste management, air quality, water quality and access. It will also incentivise the distribution of additional resources for the adoption of environmentally sustainable technologies and processes by local bodies, individuals, and companies and provide fiscal incentives.

Potential Types of Credits

The Green Credit Programme will include several types of credits:

  • Forest & Ecosystem Credits
  • Air Quality Credits
  • Water Quality and Access Credits
  • Waste Management Credits
  • Energy Efficiency Credits
  • Renewable Energy Generation Credits

These credits are additional to domestic (Indian) emission trading system carbon credits under ECAct2022, International Voluntary Carbon Credits, Article 6 Carbon Credits under the Paris Agreement, and Plastic Credits under EPR Regulations.

The potential trade rates of these credits will be less than carbon credits, but if sold jointly with carbon credits, they will be more than the prevailing carbon credits.

Indicative Green Credit Mechanism

A mechanism aligned with the domestic and international carbon market is necessary to create a significant impact and align the green credit programme with the country’s vision for a net-zero future. This mechanism should include high-quality projects in priority sectors like waste management, water, forest ecosystem, and transport, in addition to a legal framework and legislation.

The market infrastructure should also be re-developed to facilitate green credit trade or transfer. This could include a national ‘mega-registry’ for all carbon instruments, potentially linked to international registries. Demand side management strategies should ensure market stability, existing trading infrastructure should enable the trade of green credits, and MRV protocols should be aligned with global best practices.

Regulatory Body

Potential support for this program may come from UN agencies like the Green Climate Fund, UNDP, etc. The Ministry of Environment, Forest and Climate Change of India (MOEFCC) and its sub-committees/bodies could be the regulatory body of the Green Credit Programme. Once the scheme gets approved after stakeholder consultation, MOEFCC or the regulating body will devise an overall policy framework, prepare guidelines under FCA & EPA, set up institutions for the implementation of the scheme, and allocate functions to all institutions.

Focus on Green Growth

The Budget 2023 builds focus on green growth and energy transition. It supports the vision for “LiFE”, i.e., Lifestyle for Environment, to spur a movement toward an environmentally conscious lifestyle. The green credit programme, once implemented and operational, will prove to be a crucial approach in advancing a country‚Äôs sustainable goals.

In conclusion, the Green Credit Programme represents a significant step towards promoting sustainable practices and achieving India’s green growth agenda. It is a comprehensive initiative that not only incentivises environmentally friendly practices but also provides a framework for their implementation and regulation. The success of this programme will undoubtedly contribute significantly to India’s journey towards a sustainable and environmentally conscious future.