Will the Green Credit Programme Incentivize Positive Environmental Actions?

The Government of India has launched the Green Credit Programme (GCP)—a market-based voluntary programme—to enhance energy and resource-use efficiency, foster conservation of resources, mitigate climate change, and strengthen adaptive capacity. The programme intends to incentivize the adoption of environmentally sustainable technologies and processes through fiscal and financial nudges and effect behavioural changes. The efficacy of a policy programme depends on its design and implementation, though, in theory, such programmes are designed to be cost-effective, environmentally favourable, as well as economically inclusive. The success of a tradable programme should be judged on the basis of four parameters: design of the programme, minimization of transaction costs, market volatility, and leakage and environmental degradation. The GCP administrators have yet to issue an effective design and implementation framework for the programme.