India this week published the draft of a Green Credit Programme aimed at incentivising environmentally conscious practices to promote a sustainable lifestyle as part of the broader Indian initiative, Lifestyle for Environment (LiFE). 

The new Green Credit Programme aims to lay the foundation for a market-based mechanism to promote “a grassroot mass movement for combating climate change, enhancing environment actions to propagate a healthy and sustainable way of living based on traditions and values of conservation and moderation, and for sustainable and  environment-friendly development.” 

The official Gazette notification from the Ministry of Environment and Forests was published on Tuesday, five months after the plan was announced in Parliament.

However, climate and environmental activists have generally taken a “wait-and-see” attitude to the initiative, saying it would be difficult to assess until the value of the credits is established – along with a mechanism for awarding them efficiently and with integrity. 

Key areas overlooked

The Green Credits Programme will be implemented through pilots in eight sectors, primarily affecting rural areas. These, according to the text of the government gazette, will include: 

• tree planting; 
• water conservation, water harvesting and water use efficiency, including treatment and reuse of wastewater; 
• regenerative agricultural practices and land restoration to improve productivity, soil health and nutritional value of food produced; 
• sustainable and improved practices for waste management, including collection, segregation and treatment;  
• conservation and restoration of mangroves; 
• measures for reducing air pollution and other pollution abatement activities; 
• construction of buildings and other infrastructure using sustainable technologies and materials.

But electricity production and transport – two of the biggest sources of pollution in India – are not mentioned at all.  

The initiative does, however, make reference to credits for “measures for reducing air pollution and other pollution abatement activities.”

India currently suffers from some of the highest air pollution levels in the world – with peaks regularly recorded in late autumn when rural crop waste burning by farmers, a spike in household heating, and weather conditions all combine to make the Delhi region, in particular, an air pollution sinkhole. 

So far the central government has failed to make serious efforts to incentivize alternatives to crop stubble burning, one of the leading drivers of seasonal air pollution emergencies.  

Budget allocation unclear

The government first proposed the Green Credit initiative on 1 February as part of its 2023-2024 budget, describing it as a national voluntary market mechanism. 

Although funds weren’t allocated explicitly for this, any administrative costs for this initiative are likely to come from the increased budget allocation for the Ministry of Environment, Forest and Climate Change, which went up from a revised estimate of Rs 2,478 crore ($301million) in the last budget to Rs 3,079.4 crore ($375 million) this year. 

Alternatively, funds could come from the Rs 35,000 crore allocated to achieve energy transition and net zero emissions.

By leveraging a “competitive market-based approach for Green Credits,” the government said it aims to motivate individuals, private sector producers, farmers, small-scale industries, cooperatives, urban and rural local bodies, forestry enterprises and any organisations that generate positive environmental actions by “ incentivising voluntary environmental actions of various stakeholders”. 

Green credits will be tradable and those earning them will be able to sell these on a proposed domestic market platform.  However, the mechanisms for assigning value to credits, awarding credit and enabling their transfer have yet to be created. 

Bureaucratic structure

The initiative will be managed by a steering committee headed by the environment secretary and comprise officials across the ministries and departments concerned. 

To administer such an ambitious programme, the government envisages an Accredited Green Credit Verifier, an entity accredited and authorised by the Green Credit Programme Administrator to monitor and assess activities under the umbrella of India’s  Environment Protection Act. 

Entities will have to register to qualify to generate Green Credits through an electronic database system maintained by the Green Credit Programme Administrator or its accredited agency to record the issuance and exchange of Green Credits.

The government has appointed the Indian Council of Forestry Research and Education as the programme administrator responsible for implementing the Green Credit Programme including its management, monitoring and operation. 

The administrator will develop all guidelines, processes and procedures for implementation of the programme, constitute technical or sectoral committees for each activity to facilitate in developing methodologies and processes for registration of Green Credit activities and issuance of Green  Credits and help set up a credible trading platform and generate demand for such credits.

According to the draft policy, anyone engaged in positive environmental interventions can earn Green Credits. For example, a company which undertakes water harvesting and reuse or invests in restoring mangrove forests in a state can earn Green Credits, which can subsequently be sold at the trading platform once a steering committee has validated them. 

Each Green Credit would have a monetary value assigned to it and can be traded, but there is no indication of how the different activities will be weighed. In addition, there is a danger of too much bureaucracy.

Industry associations will be included in the steering committee that governs the implementation of the Green Credit policy – meaning that pressures from polluting industries could overwhelm the programme.

The various parties mentioned by the notice –a steering committee of officials from different ministries, accredited Green Credit verifiers, third-party certifiers and many other committees –  could have very different views on environmental issues. It would complicate its implementation

“It’s a work-in-progress, well-intentioned, using all the correct words, but without financial details,” said a Delhi-based scientist who spoke with Health Policy Watch, but declined to be named. “It appears quite subjective. Let us see how this policy comes up. Its actual impact will depend on many factors.”

Incentivising farmers

The emphasis on farmland and forests could, however, be at least an entry point to incentivising farmers to adopt alternatives to crop stubble burning – which creates devastating pollution in northern India every autumn. 

Conversely, however, there isn’t much emphasis at all on fostering alternatives to the other two leading drivers of air pollution and climate change – through clean power production and green mobility. In addition, it could be used by dirty industries to greenwash their environmentally unsound projects.

However, it is still early days to evaluate this policy. The draft policy will be finalised in two months’ time after comments and objections are received and reviewed.

Following that, the Ministry of Environment and Forests is supposed to begin to establish mechanisms for implementation, including technical committees for each sector to develop methodologies, standards and processes for registration of projects granting the credits. 

The technical committees will also determine the value of green credit to be awarded and more detailed eligibility criteria. 

The Indian Council of Forestry Research and Education (ICFRE) will also accredit a provider who will set up the trading platform for the exchange of Green Credit Certificates,  as well as decide what entities can act as green credit verifiers. 

An environmental activity generating Green Credits may also generate climate co-benefits, the government noted. Therefore, many activities eligible for Green Credits may also be eligible for Carbon Credits, under a carbon credit trading scheme that is currently being developed by the Bureau of Energy Efficiency in the Ministry of Power, along with Ministry of Environment, Forests and Climate Change.

Jyoti Pande Lavakare is co-founder of the Indian clean air non-profit Care for Air. Her memoir, Breathing Here is Injurious to Your Health on the human cost of air pollution simplifies and amplifies the science behind air pollution.

Image Credits: Biswarup Ganguly, Neil Palmer, MacKay Savage.