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Green Credit Programme: Legal, Environmental, and Social Implications
Context:
The Environment Ministry has launched the Green Credit Programme (GCP) to boost forest and tree cover and promote “pro-planet actions”, despite concerns from the Law Ministry.
About Green Credit Programme(GCP) and Green Credits
- The Green Credit Programme (GCP), launched by the Ministry of Environment, Forest and Climate Change (MoEFCC) in October 2023, aims to promote environmentally positive actions through a market-based credit trading system.
- Green credits are tradable units awarded for activities like afforestation, water conservation, sustainable agriculture, and waste management.
- The programme seeks to involve individuals, communities, industries, and PSUs to enhance sustainability efforts.
- However, concerns regarding legal validity, environmental impact, and socio-economic implications have been raised.
Legal Concerns and Governance Issues
- Lack of Legal Clarity
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- The Environment Protection Act (EPA), 1986, does not explicitly provide for a market-based credit trading system.
- The Energy Conservation Act, 2001, was amended in 2023 to facilitate carbon credit trading, but a similar amendment has not been made for the GCP.
- Sidestepping Legal Review
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- The Law Ministry advised the MoEFCC to consult the Department of Legal Affairs before notifying the Green Credit Rules.
- However, the MoEFCC proceeded without legal consultation, justifying its action under the EPA’s provisions for environmental protection.
- Comparison with Extended Producer Responsibility (EPR)
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- The MoEFCC defended the GCP by drawing parallels with the EPR framework for waste management.
- However, EPR is a mandatory compliance mechanism, while GCP is voluntary, making the comparison flawed.
Environmental and Ecological Concerns
- Potential Risks to Forest Ecosystems
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- Compensatory afforestation under GCP may lead to loss of natural forests.
- Lack of clarity in defining degraded land may result in the misclassification of ecologically important areas.
- The 2023 amendment to the Forest Conservation Act does not explicitly permit the use of notified forests for compensatory afforestation.
- Monoculture Plantations vs. Biodiversity Conservation
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- Forest departments may prioritise fast-growing species for easy maintenance, leading to monoculture plantations.
- Monocultures fail to support native biodiversity, soil health, or ecological resilience.
- Experts recommend third-party audits for at least 20 years to ensure ecological benefits.
Socio-Economic and Community Rights Issues
- Risk to Indigenous Communities’ Forest Rights
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- Unrecognised Community Forest Rights (CFRs) under the Forest Rights Act (FRA), 2006, may be allocated for plantations without local consultation.
- Lack of Free, Prior, and Informed Consent (FPIC) violates the rights of tribal and forest-dependent communities.
- Ambiguity in Land Allocation and Ownership
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- The GCP mandates plantations on “degraded” land, but lacks a clear definition.
- Grasslands, scrub forests, and open forest ecosystems may be wrongly categorised as degraded, leading to biodiversity loss.
Economic and Market-Based Concerns
- Green Credits as a Proxy for Compensatory Afforestation
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- Easier access to forest land for industries may lead to commercial exploitation.
- The Constitutional Conduct Group has warned that GCP could reduce India’s forest area rather than enhance it.
- Monopoly of Forest Departments in Credit Issuance
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- Only state forest departments can create and maintain plantations under GCP, leading to a single-seller market mechanism.
- Lack of competition may lead to inefficiencies.
- Risk of Double Counting with Carbon Credits
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- Overlapping objectives of green credits and carbon credits create risks of double counting environmental benefits.
- If the same plantation project is used for both green and carbon credits, it violates environmental integrity principles.
Implementation and Key Stakeholders
- Administrative Structure
- The Indian Council of Forestry Research and Education (ICFRE) is responsible for programme administration.
- Public Sector Undertakings (PSUs), such as Indian Oil Corporation Limited (IOCL), Powergrid Corporation, and NTPC, are leading in green credit commitments.
- A total of 384 entities, including individuals, NGOs, and private players, have enrolled.
- Monitoring Mechanisms
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- Google Earth, satellite data, and third-party audits will track green credit generation.
- A standardised equivalence formula is being developed to quantify and compare restoration activities.
- Evolution from Tree Plantation to Eco-Restoration
- Initial Tree Plantation Approach: The initial methodology required 1,100 trees per hectare.
- Shift to Eco-Restoration in April 2024
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- Guidelines were revised to include shrubs, herbs, grasses, soil conservation, rainwater harvesting, and terracing.
- Reflects a broader understanding of forest ecology and biodiversity conservation.
Policy Implications and Recommendations
- Legal Reform: Amend the Environment Protection Act (EPA), 1986, to explicitly support market-based green credit mechanisms.
- Transparent Land Classification: Clearly define degraded land to prevent misuse of ecologically sensitive areas.
- Stronger Community Safeguards: Mandate Free, Prior, and Informed Consent (FPIC) for projects on forest and community lands.
- Implement independent third-party monitoring.
- Enhanced Market Structure
- Introduce competition in credit issuance to avoid monopolisation by state forest departments.
- Long-Term Ecological Monitoring: Ensure plantations are sustainably maintained for at least 20 years.
- Avoid Double Counting: Clearly distinguish green credits from carbon credits to maintain environmental integrity.
