New draft rules on Green Credits Programme, a step towards achieving a environmental sustainability
Utsav Mishra
Management Consulting | ESG | Strategy | Digital transformation | Business Plans, Growth/Entry strategies, Feasibility, Large scale Transformations
The Ministry of Environment, Forest and Climate Change (MoEFCC) has released a draft notification inviting comments on the new "Green Credits Programme" (GCP). This is a welcome step in the direction of promoting sustainable ways of living.
?The concept of green credits isn’t new and countries like US, UK, Japan and even China have introduced policy measures and implemented series of incentives for enterprises falling under purview of green credits and environmental projects.
?Let's take a closer look at the draft notification, especially its potential positive implications and areas that may require further development:.
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Potential Positive Implications:
??Stronger Environmental Safeguards: The GCP notification signifies a significant step towards enhancing environmental protection and sustainability practices.
??Ecological Conservation: The policy encourages the conservation and restoration of natural habitats, ensuring the preservation of biodiversity for future generations.
?? Climate Change Mitigation: The GCP emphasizes the adoption of green technologies and practices, promoting a transition to low-carbon and climate-resilient development.
?? Sustainable Infrastructure Development: The policy encourages the incorporation of sustainable practices in infrastructure projects, fostering a greener and more resilient future.
?? Stakeholder Participation: The draft notification seeks public comments, providing an opportunity for stakeholders, communities, and experts to contribute their perspectives and suggestions.
Potential areas that may need further thought and development:
?? Potential delays in project approvals: The implementation of stricter environmental safeguards might lead to relatively longer approval process for projects, potentially affecting timelines and investments.
?? Economic Impact: Industries may face increased compliance costs and potential delays, impacting their financial viability and competitiveness in the short term.
?? Ambiguity and Interpretation: There is a need to develop clear set of guidelines to implement the programme to avoid any ambiguities which may lead to uncertainty and potential disputes during project assessments.
?? Limited Sectoral Focus: The GCP appears to be scaled up in a phased manner, starting with individuals and entities engaged in environmental interventions & specific sectors, potentially overlooking the environmental impact of other industries or activities.
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??Balancing Development and Conservation: Striking the right balance between
development aspirations and environmental concerns remains a challenge
??? It's important for all stakeholders to carefully review and provide constructive feedback on the draft GCP notification, ensuring that it addresses potential concerns and strengthens positive outcomes. Let's work together to shape a greener and more sustainable future!
?? Voluntary nature: The environmental credits being voluntary in nature may lead to delays in achieving the environment goals as we have seen with rules and regulations in other sectors such as stock markets, warehousing receipts etc. Incase there is intent to keep it that way, appropriate incentive mechanisms must be built in, which may be further refined with pilots and customised to needs of different sectors.
Further,
1.???Since this notification, talks about bringing lifestyle change, the draft can potentially be more holistic, by covering wider environmental impact across sectors eg. Encouraging greater lifecycle, reusability of products, reviewing need for consumption and circular economy. Right to repair is one such step in this direction (however, the current policy of discarding vehicles based on age doesn’t help it). Though this may lead to a reduction in production quantities, the same can be compensated with higher product prices, lower taxes and green credits.
2.???Inorder to bring such change there is a need for a strong regulatory framework and to develop a clear strategy, sustainable operating model, institute transparent processes and automation with minimal manual interventions with a pre defined TAT. We are living in the age of IoT where technology is becoming increasingly accessible at relatively lower cost every single day, so this is not impossible and technology will have to play a key role here.
To summarise, this is a great intent shown by the Government of India and must be taken seriously by all including the Government, businesses and individuals by inculcating a culture of sustainable practices in every small and large tasks we do. The direction is right, the right enablers and collective will of all stakeholders is what is needed for the initiative to be successful.
“There is sufficiency in the world for man's need but not for man's greed” - Mahatma Gandhi
Utsav Mishra is Director at EY. Views are personal.?