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Green Credits Initiative by Prime Minister Modi at COP28


Prime Minister Narendra Modi launched an initiative at COP28 in Dubai, focusing on generating Green Credits through plantation on degraded wasteland. The initiative, highlighted during a high-level event, is emphasized to surpass the commercial nature of traditional carbon credits.


GS III: Environment and Ecology

Dimensions of the Article:

  1. Understanding Carbon Credits
  2. Green Credit Programme
  3. Significance of the Green Credit Programme
  4. Concerns Regarding the Green Credit Mechanism

Understanding Carbon Credits:

  • Carbon credits, also known as carbon offsets, are permits that grant the holder the right to emit a specific amount of carbon dioxide or other greenhouse gases.


  • Each credit corresponds to the allowance for emitting one ton of carbon dioxide or its equivalent in other greenhouse gases.

Awarding and Limitation:

  • Companies that engage in polluting activities are awarded credits, permitting them to emit up to a certain limit.
  • This emission limit is periodically reduced to encourage emissions reduction.


  • Companies with excess credits can sell them to other companies in need, creating a market for carbon credits.

Incentives for Emission Reduction:

  • Companies have dual incentives to reduce greenhouse gas emissions:
    • They must spend money on additional credits if their emissions surpass the set cap.
    • They can generate revenue by reducing emissions and selling surplus allowances.

Financial Incentives:

  • The financial aspect creates a system where companies are motivated to both limit their emissions and trade any unused credits, fostering a market-driven approach to emission reduction.

Green Credit Programme:

  • The Green Credit Programme introduces a system of incentives, known as “Green Credits,” for activities that have a positive impact on the environment.
  • It complements the domestic Carbon Market in India, expanding beyond CO2 emission reductions to incentivize a wider range of sustainable actions.
  • The Green Credit System aims to meet various environmental obligations, encouraging companies, individuals, and local bodies to undertake sustainable initiatives.
  • Unlike the carbon market’s focus on CO2 emissions, the Green Credit Programme promotes broader environmental goals.
Tradable Credits:
  • Green credits earned through sustainable activities will be tradable, allowing participants to sell them on a proposed domestic market platform.
  • This creates a market-based approach to incentivize and reward environmentally beneficial actions.
Program Administrator:
  • The Indian Council of Forestry Research and Education (ICFRE) will serve as the administrator of the Green Credit Programme.
  • ICFRE will develop guidelines, processes, and procedures for the implementation of the programme, ensuring its effectiveness and integrity.

Green Credit Activities:

The programme promotes a range of activities that contribute to environmental sustainability, including:

  • Increasing Green Cover: Promoting tree plantation and related activities to enhance the green cover across the country.
  • Water Conservation: Encouraging water conservation, water harvesting, and efficient water use, including the treatment and reuse of wastewater.
  • Regenerative Agriculture: Promoting natural and regenerative agricultural practices and land restoration to improve productivity, soil health, and the nutritional value of food produced.
  • Waste Management: Supporting sustainable waste management practices, including collection, segregation, and treatment.
  • Air Pollution Reduction: Encouraging measures to reduce air pollution and other pollution abatement activities.
  • Mangrove Conservation: Promoting the conservation and restoration of mangroves, important ecosystems for coastal areas.
  • Ecomark Label: Encouraging manufacturers to obtain the “Ecomark” label for their goods and services, signifying their environmental sustainability.
  • Sustainable Infrastructure: Encouraging the construction of buildings and infrastructure using sustainable technologies and materials.
  • Setting Thresholds and Benchmarks: The Green Credit Programme will establish thresholds and benchmarks for each specific Green Credit activity, ensuring clear standards and targets for participants to achieve.

Significance of the Green Credit Programme:

Encouraging Compliance and Synergy:

  • The programme incentivizes private sector industries and entities to fulfill their existing obligations by aligning their actions with those generating or purchasing green credits.
  • It promotes convergence between different legal frameworks and encourages a comprehensive approach to environmental sustainability.

Support for Ecosystem Services:

  • The guidelines of the programme integrate mechanisms to quantify and support ecosystem services.
  • This benefits organic farmers and Farmers Producer Organizations (FPOs) by recognizing and rewarding their contributions to ecosystem conservation.

Valuing Multiple Ecosystem Services:

  • The Green Credit Programme introduces a unique instrument that values and rewards multiple ecosystem services.
  • It goes beyond carbon mitigation and allows green projects to achieve optimal returns by considering a broader range of environmental benefits.

Concerns Regarding the Green Credit Mechanism:

Risk of Greenwashing:

  • Experts express concerns that the market-based nature of green credits may lead to greenwashing practices.
  • There is a risk of entities making false or exaggerated claims about environmental sustainability without delivering substantial environmental benefits.

Tokenistic Activities:

  • Some fear that companies or entities may engage in superficial activities solely to generate green credits, without making meaningful efforts to address environmental issues.
  • This raises concerns about the genuineness and effectiveness of the actions taken.

Need for Urgent Emissions Reductions:

  • Critics question the effectiveness of market mechanisms, such as green credits, in achieving the necessary and urgent emissions reductions required to combat climate change.
  • They argue that more transformative efforts guided by government policies and regulations are essential.

Resource Allocation and Fraud Prevention:

  • There are concerns about the allocation of resources for monitoring and preventing fraud within the green credit mechanism.
  • Critics argue that these resources could be better directed towards initiatives with more significant transformative impacts on sustainability.

-Source: The Hindu

February 2024