Syllabus:

GS3: Conservation, environmental pollution and degradation, environmental impact assessment 

Context: 

The Environment Ministry has issued new guidelines for awarding Green Credits for tree plantation under the Green Credit Programme (GCP).

Key Changes under the New Rules 

Changes in Calculation Methodology: Under the new methodology, green credits for tree plantations will be awarded only after five years of restoration of degraded land, based on a minimum canopy density of 40% and tree survival. 

• The earlier system had allowed credits immediately after the plantation was completed and certified, based simply on the number of trees planted. 
• This makes the methodology outcome-based, linking credits to actual ecological improvement rather than just plantation activity.

Changes in Trading of Credits: Additionally, the new rule also provides that the credit for tree plantation will be non-tradable and non-transferable, except in the case of transfer between the holding company and its subsidiary companies.

• It allows a one-time exchange for compensatory afforestation, CSR obligations or plantation requirements linked to project approvals. After this, the credit can't be used again. 

Changes in Verification System: The new methodology also introduces a verification system under which applicants pay a verification fee and submit a claim report, which will be assessed through designated agencies before credits are issued.

• This contrasts with the earlier system where the Forest Department itself carried out plantation and provided certification directly via the Indian Council of Forestry Research and Education. 

About Green Credit Programme 

• The Green Credit Rules were notified by the Government of India in 2023 under the Environment Protection Act, 1986.
• Under the programme, individuals, communities and private industries that engage in environment-positive actions such as tree plantation, water conservation, and waste management, among others get tradable green credits.

Objective: 

• It aimed to incentivise “pro-planet” actions in response to climate change, contributing to the government's Mission LiFE (Lifestyle for Sustainable Environment). 
• The programme encourages industries, companies and other entities to meet their existing obligations or other obligations under any law for the time being in force.

Usage of Green Credits: 

• One green credit will be awarded for each new tree that is more than five years old. These credits can then be traded on a domestic platform to meet sustainability targets or legal obligations, such as compensatory afforestation in cases where forest land has been used for development projects.
• The credits can also be used by listed companies for their Environmental, Social, and Governance (ESG) disclosures under SEBI’s Business Responsibility and Sustainability framework. 

The Indian Council of Forestry Research and Education (ICFRE), Dehradun, serves as the nodal agency and oversees the programme’s implementation.

• Established in 1986 and made an autonomous council in 1991 under the Ministry of Environment and Forests, the ICFRE serves as the apex body for forestry research, education, and extension in India. 

Criticisms of the Green Credit Programme

• Forest Division Concerns: The GCP faces criticism for enabling forest diversion, as tradable credits might let industries meet legal obligations without protecting existing forests, risking more deforestation.
• Legal Conflicts: The 2023 Van Adhiniyam requires non-forest land as compensation for diverted forest land. But the GCP allows credit use for plantations on existing forest land, bypassing this rule.
• Reduced Ecological Benefits: The GCP is criticized for promoting monoculture plantations on degraded lands, which may not match the ecological value of lost old-growth forests.

Sources:

Indian Express
Hindustan Times
The Indian Express