Green Credit Programme’s Legal Issues

April 1, 2025

The Green Credit Programme (GCP) was launched by India’s Environment Ministry to enhance forest cover and promote sustainable practices. Despite concerns from the Law Ministry regarding its legal framework, the programme was rolled out in October 2023. This initiative aligns with India’s commitments to international climate agreements and aims to incentivise pro-environment actions across various sectors.

Overview of the Green Credit Programme

The GCP is a market-based mechanism designed to encourage voluntary environmental actions. It targets individuals, communities, and industries, promoting initiatives that contribute to sustainability. The programme is part of the larger ‘LiFE’ initiative aimed at encouraging a sustainable lifestyle.

Key Activities Covered

The GCP encompasses eight major activities:

Tree Plantation: Increasing green cover to combat deforestation.
Water Management: Efficient management and conservation of water resources.
Sustainable Agriculture: Adoption of eco-friendly agricultural practices.
Waste Management: Reducing pollution through effective waste management systems.
Air Pollution Reduction: Initiatives to improve air quality.
Mangrove Conservation: Protecting and restoring mangroves for ecological balance.
Governance and Administration: Financial contributions towards restoring degraded forests.

Earning and Trading Green Credits

Participants earn Green Credits by registering their environmental activities through a dedicated platform. These activities are verified, and successful participants receive certificates. Each credit corresponds to a tree planted, which can be used to meet legal obligations or report adherence to environmental standards. The GCP also includes a trading platform to facilitate the exchange of credits.

Legal Framework and Concerns

The Environment Ministry justified the GCP under the Environment Protection Act, 1986. However, the Law Ministry raised concerns about its legality, suggesting that the Act may not support the proposed business model. Despite these warnings, the Environment Ministry proceeded with the programme, arguing that it falls within the scope of environmental protection.

Legal Disputes Post-Launch

On January 4, 2024, the Legislative Department noted that the Environment Ministry had not obtained legal approval for the rules.
Experts argue that the EPA does not allow a business model for trading green credits without amendments.
Comparisons between the Green Credit Programme and the Extended Producer Responsibility (EPR) framework in waste management were criticized as misleading, as EPR is mandatory while GCP is voluntary.

Alignment with National and Global Goals

The GCP supports India’s environmental policies and international commitments. It aligns with the UN Decade on Ecosystem Restoration and complements the Carbon Credit Trading Scheme. This broadens the scope of tradable credits, promoting a range of sustainable practices beyond carbon reduction.

Participation and Impact

Since its inception, 384 entities, including major public sector undertakings, have registered under the GCP. This indicates a growing interest in participating in environmental initiatives. The programme aims to engage diverse stakeholders in restoring ecosystems and promoting sustainable practices.

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