TRADABLE GREEN CREDIT - ECONOMY

TRADABLE GREEN CREDIT - ECONOMY

News: Govt launches tradeable Green Credit to incentivise eco-friendly actions

 

What's in the news?

●       The Government has introduced a special program where an individual or entity can earn green credit and trade it on a dedicated exchange.

 

Key takeaways:

●       Green Credit refers to a unit of an incentive provided for a specified activity; delivering a positive impact on the environment.

●       The initiative aims to encourage industries, companies and other entities to meet their environmental obligations.

 

Green Credit Scheme:

Features:

●       A Green Credit Programme is proposed to be launched at national level to leverage a competitive market-based approach for Green Credits thereby incentivising voluntary environmental actions of various stakeholders.

●       Green Credit Programme will encourage private sector industries and companies as well as other entities to meet their existing obligations, stemming from other legal frameworks, by taking actions which are able to converge with activities relevant for generating or buying Green Credits.

 

Nodal Ministry - Ministry of Environment

 

Implementation:

●       A ‘steering committee,’ of government and private sector representatives will specify the details of implementing the programme.

●       Overall administration of the scheme will be under the Indian Council for Forestry Research and Education.

 

Eight Sectors:

  1. Tree plantation-based Green Credit - to promote activities for increasing green cover across the country through tree plantation and related activities.
  2. Water-based Green Credit - to promote water conservation, water harvesting and water use efficiency/savings, including treatment and reuse of wastewater.
  3. Sustainable agriculture-based Green Credit - to promote natural and regenerative agricultural practices and land restoration to improve productivity, soil health and nutritional value of food produced.
  4. Waste management-based Green Credit - to promote sustainable and improved practices for waste management, including collection, segregation and treatment.
  5. Air pollution reduction-based Green Credit - to promote measures for reducing air pollution and other pollution-abatement activities.
  6. Mangrove conservation and restoration-based Green Credit - to promote measures for conservation and restoration of mangroves.
  7. Ecomark-based Green Credit - to encourage manufacturers to obtain ecomark label for their goods and services.
  8. Sustainable building and infrastructure-based Green Credit - to encourage the construction of buildings and other infrastructure using sustainable technologies and materials.

 

Who are allowed to trade?

●       Individuals and organisations are allowed to generate ‘Green Credits.’ These credits can also be traded for money.

 

Difference from Carbon Markets:

●       Unlike carbon markets, where only greenhouse gas emissions were traded, the Green Credit Scheme was “trickier” as it involved accounting for a wide range of actions.