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Green Credit Programme: New Incentive Mechanism for Forest Restoration and Carbon Sequestration (2023‑2025) — UPSC Current Affairs | March 16, 2026
Green Credit Programme: New Incentive Mechanism for Forest Restoration and Carbon Sequestration (2023‑2025)
The Ministry of Environment has operationalised the <strong>Green Credit Programme</strong> under the <strong>Environment (Protection) Act, 1986</strong>, issuing green credits for restoring degraded forest lands after a five‑year, 40% canopy density threshold. Administered by the <strong>ICFRE</strong>, the scheme aligns with the LIFE movement and can satisfy compensatory afforestation requirements, offering significant environmental and community benefits.
Overview The Green Credit Programme (GCP) was launched to boost green cover, enhance carbon sequestration and restore degraded forest lands. It operates under the Environment (Protection) Act, 1986 and is administered by the Indian Council of Forestry Research and Education (ICFRE) . Key Developments Green Credit Rules, 2023 were notified on 12 Oct 2023, providing the legal basis for issuing green credits. Modality for tree plantation and eco‑restoration of degraded forest lands was first issued on 22 Feb 2024 and revised on 29 Aug 2025. A dedicated portal ( moefcc‑gep.in ) now facilitates applications, monitoring and credit issuance. Only after a minimum five‑year establishment period and achieving at least 40 % canopy density can applicants claim green credits. Verified land parcels are selected by State Forest Departments and overseen by the DNO and SNO . Important Facts GCP encourages the use of indigenous species based on site suitability for afforestation. Restored forest lands can be counted towards Compensatory Afforestation requirements under the Van (Sanrakshan Evam Samvardhan) adhiniyam, 1980 . Benefits extend to local communities through increased timber, non‑timber forest produce, fodder, water and other ecosystem services. The programme aligns with the LIFE movement , fostering a culture of environmental stewardship. UPSC Relevance Understanding GCP is essential for GS‑4 (Environment) as it illustrates how policy instruments translate into on‑ground forest restoration, carbon sequestration and community benefits. The scheme also touches upon inter‑governmental coordination (central‑state), use of technology (portal), and legal frameworks (environmental statutes), all of which are frequent essay topics. Way Forward Strengthen monitoring mechanisms through satellite‑based canopy assessment to ensure the 40 % density target. Expand private‑sector participation by linking green credits to corporate ESG reporting. Integrate GCP outcomes with national climate commitments under the Paris Agreement. Enhance capacity building for forest officials (DNOs, SNOs) to streamline verification and avoid double counting.
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Overview

Green Credit Programme links forest restoration to carbon finance, boosting India's climate commitments

Key Facts

  1. Green Credit Rules, 2023 were notified on 12 Oct 2023 under the Environment (Protection) Act, 1986.
  2. The programme is administered by ICFRE and operates through a dedicated portal – moefcc‑gep.in.
  3. Eligibility: a minimum five‑year establishment period and at least 40% canopy density before credits are issued.
  4. State Forest Departments verify parcels via Divisional Nodal Officer (DNO) and State Nodal Officer (SNO).
  5. Modality for tree plantation and eco‑restoration issued on 22 Feb 2024, revised on 29 Aug 2025.
  6. Restored lands can be counted towards compensatory afforestation under the Van (Sanrakshan Evam Samvardhan) adhiniyam, 1980.
  7. The scheme encourages indigenous species and aligns with the LIFE movement and India's Paris Agreement commitments.

Background & Context

The Green Credit Programme (GCP) is a market‑based incentive that monetises forest restoration and carbon sequestration, bridging environmental policy with climate finance. It exemplifies central‑state coordination, use of technology for monitoring, and compliance with international climate obligations, making it a pivotal case for GS‑3 (Environment) and GS‑4 (Governance).

UPSC Syllabus Connections

Essay•Environment and SustainabilityPrelims_GS•Environmental Issues and Climate ChangeGS2•Functions and responsibilities of Union and StatesPrelims_GS•Constitution and Political SystemPrelims_GS•Ecology and BiodiversityGS2•Parliament and State Legislatures - structure, functioning, powers and privileges

Mains Answer Angle

In GS‑3, candidates can discuss GCP as a climate‑finance instrument that operationalises India's Paris Agreement targets; in GS‑4, they can analyse its inter‑governmental governance and regulatory framework.

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Analysis

Practice Questions

Prelims
Easy
Prelims MCQ

Environmental Issues and Climate Change

1 marks
3 keywords
GS3
Medium
Mains Short Answer

Environment and Sustainability

5 marks
5 keywords
GS3
Hard
Mains Essay

Climate finance mechanisms

20 marks
6 keywords
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