The draft Green Credit Programme recently notified by the Indian government aims to incentivise the voluntary adoption of environment-friendly practices by individuals, industries and local bodies, in alignment with the larger vision of the Prime Minister’s Mission Lifestyle for Environment (LiFE) and the G20 New Delhi Leaders’ Declaration that highlighted the importance of managing our limited water resources.
This credit programme is different from the Indian Carbon Market because it will provide a trading platform for credits generated not only from carbon emissions reduction, but through a wide range of environmentally and socially sustainable practices across different sectors.
One of the identified sectors is water, which can generate green credits through activities such as water conservation, water harvesting, and water use efficiency, including treatment and reuse of wastewater.
Also Read: India's Green Credit Programme and carbon credit initiative | What the draft says and who'll benefit
Water management is an imminent issue in India, with ever-increasing pressure on freshwater resources. As per an analysis by the Council on Energy, Environment and Water (CEEW), 11 out of the 15 major river basins in India will be water-stressed by 2025.
The country already has several schemes and policies for sustainable water resources management, such as the second phase of the Atal Mission for Rejuvenation and Urban Transformation (AMRUT 2.0) that aims to make cities water-secure by not just supplying water to urban households, but also improving wastewater management including its reuse, and rejuvenating water bodies.
According to CEEW estimates, nearly 12,000 million cubic metres of treated wastewater was available in 2021, which could have generated ₹63 crore worth of revenue for urban local bodies if sold at the standard market rate for reuse in different sectors. The Green Credit Programme would provide incentives to various stakeholders to help realise such a potential, thereby improving the financial viability of treated wastewater reuse projects.
The benefits for the water sector from the Green Credit Programme depend largely on how such a policy is implemented and enforced. The following pointers should now be considered for developing an efficient green credit market, for water and other sectors.
First, define the type of green credit that will be awarded for each of the proposed activities in the water sector. The reason is that the type of credit awarded will greatly vary given the broad range of sectors covered. For instance, in the case of the water sector, each credit can represent a fixed volume of water that is conserved or generated through the adoption of a particular practice, such as reusing treated wastewater.
Second, given that the green credit market will be implemented in tandem with the carbon market, the issue of ‘double counting’ may arise. An activity generating green credits may also be leading to the reduction or removal of carbon emissions from the environment. In this case, the same activity will generate both green and carbon credits under their respective programmes. Hence, it must be ensured that there is accurate measuring and accounting for the carbon sequestered or abated, and the emissions reduction doesn’t end up being claimed twice.
Third, there is the issue of ‘additionality’, which may arise from a single activity falling under more than one sector identified by the programme. For instance, regenerative agricultural practices can also help improve water use efficiency. So, activities creating multiple benefits need to be awarded multiple green credits. Hence, it’s essential that regulations and benchmarking systems take these aspects into account.
Lastly, the Green Credit Programme is a first-of-its-kind national-level initiative to generate tradable, cross-sectoral credits, valuing multiple ecosystem services. The implementing authorities need to undertake watchful considerations while setting the value to maintain fungibility between credits generated from different sectors, for fair and equitable trade of cross-sectoral credits.
The Green Credit Programme can be a game changer in India’s effort to ensure sustainable use of its limited water resources. An extensive consultation process will be key in transforming this promising idea into a robust policy that can lead to impact at scale. The draft Green Credit Programme Implementation Rules, 2023 provides a good opportunity to do it.
—The authors, Saiba Gupta, is a Programme Associate, and Ayushi Kashyap, is a Consultant, at the Council on Energy, Environment and Water (CEEW), an independent not-for-profit policy research institution.
(Edited by : C H Unnikrishnan)
First Published: Oct 19, 2023 8:55 AM IST
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