The Indian government has updated the rules for its Green Credit Programme (GCP). This programme encourages voluntary actions for environmental protection. The new rules focus more on the survival and health of planted trees.
Previously, green credits were awarded based on the number of trees planted per hectare within two years. Now, credits will only be given after five years of restoration work. A key requirement is that the trees must have a minimum canopy density of 40 per cent. The number of surviving trees will also be considered.
One significant change is that green credits earned from tree plantation will be non-tradable and non-transferable. This means they cannot be easily bought or sold on a market. However, companies can transfer credits between their own subsidiary companies. A key incentive of the original GCP was market-based trading of these credits. The new rules state that credits can be exchanged once for compliance with legal obligations, such as compensatory afforestation. After this exchange, the credit will cease to exist.
The Green Credit Programme aims to recognise and reward individuals and companies for activities like tree planting, water conservation, and waste management. The goal is to promote environmental protection through these voluntary actions.
The new methodology for calculating green credits was notified on August 29 and replaces the earlier one from February 22, 2024. The Ministry of Environment, Forest and Climate Change introduced these changes to improve the effectiveness of the programme. The earlier system often faced criticism for not focusing enough on the survival rate and quality of plantations.
The revised approach prioritises the actual growth and health of trees. This change is important because many government plantation drives have struggled with low survival rates. By extending the credit period to five years and focusing on canopy density, the government aims to ensure better quality and long-term results from tree plantation activities.
Companies participating in tree plantation are given degraded forest land by state forest departments. The forest departments manage the planting process. The green credits earned can be used for reporting environmental, social, and governance (ESG) performance. This allows companies to showcase their commitment to sustainability, which is important for frameworks like the Securities and Exchange Board’s Business Responsibility and Sustainability reporting.
Prime Minister Narendra Modi launched the GCP in November 2023 at a UN Climate Conference in Dubai. The programme has already seen significant registration, with 57,986 hectares of degraded forest land registered so far. Officials from the ministry were unavailable for comment on the specific details of the methodology tweak. This revised approach signals a stronger commitment to ensuring that tree plantation initiatives lead to tangible environmental benefits and healthy ecosystems.