What are the new Green Credit Programme rules? | Explained

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The story so far: On April 12, the Environment Ministry issued further guidelines on its Green Credit Programme (GCP), two months after it had prescribed rules governing the first initiative, afforestation. Modifying the rules, an official said, will prioritise the restoration of ecosystems over mere planting of trees.

What is the Green Credit Programme?

This programme was officially unveiled in October 2023 and has its provenance in Mission Life, a principle frequently articulated by Prime Minister Narendra Modi. Its goal is to lay an emphasis on sustainability, reduce waste and improve the natural environment. The GCP programme presents itself as an “innovative, market-based mechanism” to incentivise “voluntary actions” for environmental conservation, according to a document of the Environment Ministry. Under this, individuals, organisations and companies — public and private — would be encouraged to invest in sectors ranging from afforestation, water conservation, stemming air-pollution, waste management, mangrove conservation and in return be eligible to receive ‘green credits.’ An autonomous body of the Ministry, the Indian Council of Forestry Research and Education (ICFRE), is in charge of administering the programme. They will define methodologies to calculate ‘green credits’ that result from the activities prescribed. They will also manage a trading platform whereby such credits could be traded.

In February, the Ministry prescribed the rules governing the first of these initiatives — afforestation. Broadly, companies, organisation and individuals could offer to pay for afforestation projects in specific tracts of degraded forest and wasteland. It said, the actual tree planting would be carried out by the State forest departments. Two years after planting and following an evaluation by the ICFRE, each such planted tree could be worth one ‘green credit.’ So far, The Hindu has learnt that forest departments of 13 States have offered 387 land parcels of degraded forest land, worth nearly 10,983 hectares. Those who are successful in fulfilling the criteria will be given an estimate of the costs involved in afforestation. Public sector companies such as Indian Oil, Power Grid Corporation of India, the National Thermal Power Corporation, Oil India, Coal India, National Hydropower Corporation have reportedly registered to invest in the programme, a Ministry official confirmed.

Why has the GCP stoked controversy?

The GCP has not become operational but critics have questioned multiple aspects of it. The first is that it makes a commodity out of environmental conservation. India’s forest conservation laws oblige any industry, that is allowed to raze forests and use that land for non-forestry purposes, to provide an equivalent amount of non-forest land to forest authorities and pay them to afforest that land.

The GCP programme for afforestation says that companies can “exchange” their credits for “complying with compensatory afforestation”. This could be a way, critics say, to ease forest diversion requirements for mining and infrastructure companies. Secondly, planting trees does not automatically boost ecosystems. India has about 200 types of forests. Some are grasslands, some are dominated by shrubs and there have been studies to show that planting the wrong types of trees could fester invasive species or prevent a sustainable ecosystem. There is also a threat that natural forests could be razed and invasive monocultures promoted. Finally, the GCP also says that green credits that result in storing carbon (from trees) may be used for carbon trading. This again is controversial as the math equating these activities is not clear.

How has the government responded?

In its latest update, the Ministry has issued the guidelines that States must rely on to calculate what it would cost to restore a degraded forest landscape. The Ministry has tweaked an earlier requirement that there be a minimum of 1,100 trees per hectare to qualify as a reforested landscape and left it to States to specify them. “Not all degraded forests can support that kind of density. Thus, in some places shrubs, herbs and grasses may be suitable for restoring the ecosystem,” Nameeta Prasad, Joint Secretary, in the Environment Ministry told The Hindu. Preference would be given to indigenous species. The programme was currently in a “pilot project” mode and questions such as how shrubs and grasses could be quantified in terms of green credits were still being worked out, she added. Moreover, companies would not be able to offset all their obligations under compensatory afforestation using green credits, but could claim a portion of it, she clarified.