Green Credits Initiative by Prime Minister Modi at COP28

Context:

Prime Minister Narendra Modi launched an initiative at COP28 in Dubai, focusing on generating Green Credits through plantation on degraded wasteland. The initiative, highlighted during a high-level event, is emphasized to surpass the commercial nature of traditional carbon credits.

Relevance:

GS III: Environment and Ecology

Dimensions of the Article:

1. Understanding Carbon Credits
2. Green Credit Programme
3. Significance of the Green Credit Programme
4. Concerns Regarding the Green Credit Mechanism

Understanding Carbon Credits:

• Carbon credits, also known as carbon offsets, are permits that grant the holder the right to emit a specific amount of carbon dioxide or other greenhouse gases.

Measurement:

• Each credit corresponds to the allowance for emitting one ton of carbon dioxide or its equivalent in other greenhouse gases.

Awarding and Limitation:

• Companies that engage in polluting activities are awarded credits, permitting them to emit up to a certain limit.
• This emission limit is periodically reduced to encourage emissions reduction.

Transferability:

• Companies with excess credits can sell them to other companies in need, creating a market for carbon credits.

Incentives for Emission Reduction:

• Companies have dual incentives to reduce greenhouse gas emissions:
  • They must spend money on additional credits if their emissions surpass the set cap.
  • They can generate revenue by reducing emissions and selling surplus allowances.

Financial Incentives:

• The financial aspect creates a system where companies are motivated to both limit their emissions and trade any unused credits, fostering a market-driven approach to emission reduction.

Green Credit Programme:

• The Green Credit Programme introduces a system of incentives, known as “Green Credits,” for activities that have a positive impact on the environment.
• It complements the domestic Carbon Market in India, expanding beyond CO2 emission reductions to incentivize a wider range of sustainable actions.

Objectives:

• The Green Credit System aims to meet various environmental obligations, encouraging companies, individuals, and local bodies to undertake sustainable initiatives.
• Unlike the carbon market’s focus on CO2 emissions, the Green Credit Programme promotes broader environmental goals.

Tradable Credits:

• Green credits earned through sustainable activities will be tradable, allowing participants to sell them on a proposed domestic market platform.
• This creates a market-based approach to incentivize and reward environmentally beneficial actions.

Program Administrator:

• The Indian Council of Forestry Research and Education (ICFRE) will serve as the administrator of the Green Credit Programme.
• ICFRE will develop guidelines, processes, and procedures for the implementation of the programme, ensuring its effectiveness and integrity.

Green Credit Activities:

The programme promotes a range of activities that contribute to environmental sustainability, including:

• Increasing Green Cover: Promoting tree plantation and related activities to enhance the green cover across the country.
• Water Conservation: Encouraging water conservation, water harvesting, and efficient water use, including the treatment and reuse of wastewater.
• Regenerative Agriculture: Promoting natural and regenerative agricultural practices and land restoration to improve productivity, soil health, and the nutritional value of food produced.
• Waste Management: Supporting sustainable waste management practices, including collection, segregation, and treatment.
• Air Pollution Reduction: Encouraging measures to reduce air pollution and other pollution abatement activities.
• Mangrove Conservation: Promoting the conservation and restoration of mangroves, important ecosystems for coastal areas.
• Ecomark Label: Encouraging manufacturers to obtain the “Ecomark” label for their goods and services, signifying their environmental sustainability.
• Sustainable Infrastructure: Encouraging the construction of buildings and infrastructure using sustainable technologies and materials.
• Setting Thresholds and Benchmarks: The Green Credit Programme will establish thresholds and benchmarks for each specific Green Credit activity, ensuring clear standards and targets for participants to achieve.

Significance of the Green Credit Programme:

Encouraging Compliance and Synergy:

• The programme incentivizes private sector industries and entities to fulfill their existing obligations by aligning their actions with those generating or purchasing green credits.
• It promotes convergence between different legal frameworks and encourages a comprehensive approach to environmental sustainability.

Support for Ecosystem Services:

• The guidelines of the programme integrate mechanisms to quantify and support ecosystem services.
• This benefits organic farmers and Farmers Producer Organizations (FPOs) by recognizing and rewarding their contributions to ecosystem conservation.

Valuing Multiple Ecosystem Services:

• The Green Credit Programme introduces a unique instrument that values and rewards multiple ecosystem services.
• It goes beyond carbon mitigation and allows green projects to achieve optimal returns by considering a broader range of environmental benefits.

Concerns Regarding the Green Credit Mechanism:

Risk of Greenwashing:

• Experts express concerns that the market-based nature of green credits may lead to greenwashing practices.
• There is a risk of entities making false or exaggerated claims about environmental sustainability without delivering substantial environmental benefits.

Tokenistic Activities:

• Some fear that companies or entities may engage in superficial activities solely to generate green credits, without making meaningful efforts to address environmental issues.
• This raises concerns about the genuineness and effectiveness of the actions taken.

Need for Urgent Emissions Reductions:

• Critics question the effectiveness of market mechanisms, such as green credits, in achieving the necessary and urgent emissions reductions required to combat climate change.
• They argue that more transformative efforts guided by government policies and regulations are essential.

Resource Allocation and Fraud Prevention:

• There are concerns about the allocation of resources for monitoring and preventing fraud within the green credit mechanism.
• Critics argue that these resources could be better directed towards initiatives with more significant transformative impacts on sustainability.

-Source: The Hindu