Green Credit Initiative

Green Credit Initiative

News: The Green Credit Initiative was launched by Prime Minister Narendra Modi at the COP28 summit.

What is the Green Credit Initiative?
• The Green Credit Initiative was first introduced by the ministry of environment, forest and climate change on October 13, 2023. There are two main priorities of the initiative - water conservation and afforestation.
• The environment ministry defined the initiative as a 'market-based mechanism designed to incentivize voluntary environmental actions across diverse sectors by various stakeholders like individuals, communities, private sector industries, and companies.'
• Under this scheme, green credits will be assigned to specific environmental activities, and will be treated as tradable commodities. These green credits will be able to be sold on domestic market platforms.

Key Purpose:
• The main purpose of this initiative is to boost voluntary environmental activities like tree plantation, water conservation, sustainable agriculture, and waste management by incentivizing it for big corporations and private companies, bringing about a change in the climate issues faced by the country.

Significance of the initiative:
• The guidelines of the programme integrate mechanisms to quantify and support ecosystem services. It will benefit organic farmers and Farmers Producer Organizations (FPOs) by recognizing and rewarding their contributions to ecosystem conservation.
• The Green Credit Programme introduces a unique instrument that values and rewards multiple ecosystem services.
• It incentivizes private sector industries and entities to fulfill their existing obligations by aligning their actions with those generating or purchasing green credits.

Potential concerns:
• Risk of Greenwashing
• The likely effectiveness of market mechanisms, such as green credits, in achieving the necessary and urgent emissions reductions required to combat climate change is questioned by critics.
• Some fear that companies or entities may engage in superficial activities solely to generate green credits, without making meaningful efforts to address environmental issues.