Context: The Green Credit Programme (GCP) rolled out by the Ministry of Environment, Forest and Climate Change was flagged by the Ministry of Law and Justice before its rollout, over legality of the business model built into it.

Analysis: Prime Minister Narendra Modi and Sheikh Mohammed bin Zayed Al Nahyan, the President of the UAE, officially unveiled the GCP on December 1, 2023, during the annual United Nations climate conference in Dubai. It was dubbed as a mechanism to incentivise “pro-planet” actions in response to climate change, and one which would promote the Centre’s Mission LiFE (Lifestyle for Sustainable Environment).

Points to learn:

• At its core, the GCP seeks voluntary participation (read investments) of individuals, companies, industries, and other entities across seven different activities — such as tree plantation, waste management, and water conservation — that will lead to improvements in the environment. 
• This participation will be incentivised by generating “green credits”, which can then be traded on a domestic market platform to potential buyers looking to meet sustainability targets, or existing legal obligations. For instance, could be exchanged for meeting compliance of compensatory afforestation.
• The credits can also be used by listed companies as part of their environmental, social and governance disclosures under SEBI’s Business Responsibility and Sustainability framework, indicating efforts taken by these companies on environmental sustainability.

How will green credits be calculated?

• Initially piloted for tree plantation and eco-restoration, including soil moisture conservation and rainwater harvesting.
• The Indian Council of Forestry Research and Education (ICFRE), Dehradun, serves as the nodal agency for GCP pilot on tree plantation and eco-restoration.
• Plantations will be carried out in degraded land parcels including open forest, scrubland, wasteland and catchment areas, and they must be five hectares in size or above.
• Forest departments identify land parcels and allocate them to registered entities, with plantations to be completed in two years.
• Green Credit Calculation: 1 grown tree = 1 green credit, subject to a minimum of 1,100 trees per hectare.

Criticism & Concerns

• GCP has been criticised for incentivising forest diversion for industries, by generating tradable credits which could also be used to meet legal obligations such as compensatory afforestation. 
• It has also been criticised for promoting plantations on degraded lands, open forests and scrub lands, which experts have argued offer unique and important ecological services.
• Under the Van (Sanrakshan Evam Samvardhan) Adhiniyam, 2023, non-forest land equivalent to forest land used for industries and development projects is mandated for compensatory afforestation. Only if non-forest land is unavailable, twice the size of degraded or unclassed forest land is used for compensatory afforestation.
• However, GCP mandates use of degraded forest land for plantations. It also has complementary provisions which allow exchange of credits, generated by paying money, for meeting the compensatory afforestation compliance. This translates into compensating for older forests with existing forest land, rather than adding non-forest land into the forest cover, as laid down in the Van Adhiniyam.

Source : Indian Express