Green GDP

Green GDP is a term used generally for expressing GDP after adjusting for environmental damage.

The System of National Accounts (SNA) is an accounting framework for measuring the economic activities
of production, consumption and accumulation of wealth in an economy during a period of time. When
information on economy's use of the natural environment is integrated into the system of national accounts,
it becomes green national accounts or environmental accounting.

The process of environmental accounting involves three steps viz. Physical accounting; Monetary
valuation; and integration with national Income/wealth Accounts. Physical accounting determines the state
of the resources, types, and extent (qualitative and quantitative) in spatial and temporal terms. Monetary
valuation is done to determine its tangible and intangible components. Thereafter, the net change in natural
resources in monetary terms is integrated into the Gross Domestic Product in order to reach the value
of Green GDP.

The process envisaged by Ministry of Environment and Forest does not require any change in the core
System of National Accounts (SNA), and is achieved by establishing linkages between the two through a
system of satellite accounts (called Satellite accounts as it adds new information to core accounts). For
example, Environmental Satellite Accounts link measures of emissions, material use, costs of remediation
and environmental taxes to measures of economic activity. Satellite accounts are a framework that enables
attention to be focused on a certain field or aspect of economic and social life. They are produced in the
context of national accounts but are more flexible as they allow concepts, definitions, accounting rules and
classifications to be changed, where it improves analysis.

An Expert Group was also convened under the direction of Prime Minister by the National Statistical
Organization, Ministry of Statistics and Programme Implementation, Government of India in August 2011 to
examine the prospects of developing green national accounts in India. The committee was Chaired Shri
Partha Dasgupta and submitted its report in March 2013.

The report of the Committee Green National Accounts in India: A Framework, opines that the word green
GDP is a misnomer as it is about the wealth of the nation that one is referring to (not income) while talking
about accretion or depletion of natural resources. The work in coming out with green GDP estimates is
progressing.

History of environmental accounting in India*

A Framework for the Development of Environmental Statistics (FDES) was developed by the Central
Statistics Office (CSO) of India in the early 1990s. The Compendium of Environment Statistics is being
released since 1997.

As per the recommendations of Technical Working Group on Natural Resource Accounting (NRA) in the
later 1990s, a pilot project on NRA in the State of Goa was initiated during 1999-2000. Thereafter, resource
accounting studies were carried out in 8 states on different set of natural resources. Later a Technical
Advisory Committee was constituted in the year 2010 under the Chairmanship of Dr. Kirit Parikh to bring
out a Synthesis Report combining the findings of all these studies. The report recommended the
preparation of a National Accounting Matrix that would include environmental accounts. The High powered
expert group under Partha Dasgupta was constituted subsequently in 2011 with the mandate of developing
a framework for green national accounts of India and for preparing a roadmap to implement the framework.

Following the guidance of International Organisation of Supreme Audit Institutions (INTOSAI) on the
framework for of environmental auditing, the supreme audit institution of India – Comptroller and Auditor
General of India (CAG) also conducts environmental audit in India. This process was formalised with the
introduction of specialized guidelines {MSO (Audit) 2002} for conduct of environmental audits. This laid
down broad guidelines to enable India’s auditors to examine whether the auditee institutions gave due
regard to the efforts of promulgating sustainability development and environmental concerns, where
warranted.

Thus, in India, Environmental audit is conducted within the broad framework of Compliance Audit and
Performance Audit at the central level by the Office of Principal Director of Audit (Scientific Departments)
and by the state Accountant Generals (Audit) at the state level. Over the years, more and more states have
taken up environmental audits. These compliance as well as performance audits have been printed in the
respective state/ central audit reports and presented to Legislature/Parliament. All these reports deal with
the environment themes of water issues, air pollution, waste, biodiversity and environment management
systems. All the environment audits done at the state level and at the central level since 2001 are collated
in the CAG reports on environmental audit.

Green Climate Fund

The Green Climate Fund (GCF)was established in December 2011 as per the decision taken by
the Conference of Parties to the United Nations Framework Convention on Climate Change (UNFCCC) in
Cancun in December 2010. In fact, one of the significant outcomes at the recent sessions of the UNFCCC
was the decision to establish and operationalize the Green Climate Fund.

The GCF has been designated as an operating entity of the financial mechanism, under Article 11 of the
Convention for provision of financial resources on a grant or concessional basis, including for the transfer
of technology to the developing countries for achieving the objectives of the Convention to counter climate
change. It is guided by and accountable to the Conference of Parties (COP) which is the supreme body of
the Convention. The guidance consists of policies, programme priorities and eligibility criteria.

As per the UN Framework Convention on Climate Change, provision of adequate climate change finance
by the developed countries to developing countries is a commitment/obligation of developed countries
(responsible for historic emissions and causing climate change). Developed country parties have to
mobilize and provide funds for addressing adaptation and mitigation at the required scale through the
Financial Mechanism of the Convention.

The purpose of the GCF is to significantly contribute to the global efforts towards achieving the ultimate
objective of the Convention – stabilization of greenhouse gas (GHG) concentrations in the atmosphere at a
level that would prevent dangerous anthropogenic interference with the climate system. Such a level
should be achieved within a time frame sufficient to allow ecosystems to adapt naturally to climate change,
to ensure that food production is not threatened and to enable economic development to proceed in a
sustainable manner.

The GCF will support developing countries in their efforts to combat climate change. It is expected that
significant amount of the climate finance (the political commitment from developed countries is a goal of
US$100 billion annually by 2020)—from developed to developing countries---would flow eventually through
GCF. The GCF will support projects, programmes, policies and other activities in developing countries. The
Republic of Korea has been selected as the host country to house its secretariat.

The operationalization of GCF is noteworthy from India’s point of view because it was India and other
developing countries who insisted on setting up a multilateral financial mechanism under UNFCCC with
resources provided by developed countries.

The GCFis governed by the GCF Board of 24 members balanced equally between developed and
developing nations, a new governance structure. The Board of the GCF is now primarily engaged in
developing the Business Model Framework and raising and mobilizing resources for GCF operations. The
Governing Instrument of the GCF states that the Fund will provide simplified and improved access to
funding, including direct access, basing its activities on a country-driven approach and will encourage the
involvement of relevant stakeholders, including vulnerable groups and addressing gender aspects. More
importantly, the role of Nationally Designated Entities in accessing the resources from the Fund is fully
recognized. The Board of the GCF, among other things, agreed that the GCF should follow a country –
driven and owned approach as a core principle while progressing its work on the business model
framework.

In sum, why we need the GCF is to ensure the success of a globally cooperative effort towards a safer
planet, and to ensure that developing countries continue to be on a path of a lower-carbon, climate-resilient
growth to which they have already pledged in one way or another, and where development remains an
overriding priority.
Paris Agreement on Climate Change
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The Paris agreement is an Agreement under the United Nations Framework Convention on Climate
Change (UNFCCC) which was adopted by 195 nations on 12th December 2015 at the 21st Conference of
Parties (COP – the supreme decision making body to the UNFCCC) held in Paris. Giving emphasis to the
concepts like climate justice and sustainable lifestyles, the Paris Agreement is a historic agreement to
combat climate change and direct actions and promote investments towards a low carbon, climate resilient
and sustainable future.

The Paris Agreement brings for the first time all nations into a common cause based on their historic,
current and future responsibilities to combat climate change. The Agreement’s main aim is to keep global
temperature rise this century well below 2 degrees Celsius and to drive efforts to limit the temperature
increase even further to 1.5 degrees Celsius above pre-industrial levels.

The Paris Agreement has 29 Articles consisting of 139 paras and covers all the crucial areas identified as
essential for a landmark conclusion that includes mitigation- reducing emissions, transparency system and
global stock take- accounting for climate action, adaptation- enhancing the capacity of countries to deal
with climate impacts, loss and damage - strengthening ability to recover from climate impacts; and support-
including finance, for nations to build clean, resilient futures.

The Paris Agreement is different from its predecessor - Kyoto Protocol- in the sense that nations settled on
a bottom-up approach in this agreement allowing each nation to submit its own national plans to reduce
greenhouse gas emissions rather than trying to follow a top down approach.

Background
In 1992, countries agreed on the UNFCCC, to decide on the actions that would be required at a global level
to limit average global temperature increases and the resulting climate change, and to cope with its
impacts. In 1997, the Kyoto Protocol was adopted which legally binds developed countries to emission
reduction targets. The Protocol’s first commitment period started in 2008 and ended in 2012. The second
commitment period began on 1 January 2013 and will end in 2020.

In 2010, at the Climate Change Conference in Cancun, governments agreed that emissions need to be
reduced so that global temperature increases are limited to below 2 degrees Celsius. The UN Climate
Change Conference held in Durban in the subsequent year, in 2011, was a decisive moment in the climate
change negotiations. In Durban, governments clearly recognized the need to draw up the blueprint for a
fresh universal agreement to deal with climate change beyond 2020, where all will play their part to the best
of their ability and all will be able to reap the benefits of success together. In short, all governments
committed to a comprehensive plan that would come closer over time to delivering the ultimate objective of
the Convention - to stabilize greenhouse gas concentrations in the atmosphere at a level that will prevent
our dangerous interference with the climate system and at the same time will preserve the right to
sustainable development. Thus, the origin of the current Paris Agreement goes back to the outcome of
Durban Conference which included a decision by Parties to launch a process to develop a protocol,
another legal instrument or an agreed outcome with legal force under the Convention applicable to all
Parties, through an Ad Hoc Working Group on the Durban Platform for Enhanced Action (ADP). It was also
decided that the ADP will start its work from 2012 and will complete its work no later than 2015.ADP
continued its work since then and progress towards developing a new text agreement continued at 18th,
19th and 20th COP held in Doha, Warsaw and Lima in 2012, 2013 and 2014 respectively.

Salient features of the Paris Agreement

The Paris Agreement states in its decision that the new Agreement is under the UNFCCC and will come
into force when at least 55 Parties to the Convention, accounting in total for at least an estimated 55
percent of the total global greenhouse gas emissions, have deposited their instruments of ratification,
acceptance, approval or accession.The Agreement will be opened for one year for signature on 22 April
2016 - Mother Earth Day.

The important features of the agreement are given below:

 The principle of Common but differentiated responsibilities (CBDR) has been maintained across all
the pillars of the agreement (mitigation, adaptation, finance, transparency etc) which was one of the
contentious issue between developed and developing countries during the negotiations.

 Setting a long term direction, countries will peak their emissions as soon as possible.

 Countries will submit updated climate plans – called nationally determined contributions (NDCs) –
every five years, thereby steadily increasing their ambition in the long-term.

 This in effect builds on the momentum of the effort of 188 national climate action plans submitted
so far.

 The new Agreement also establishes the principle that future national plans will have to be a
progression of previous efforts. This effectively means 188 climate action plans submitted so far
provide a firm floor and foundation for higher ambition.

 Climate action will also be taken forward in the period before 2020. Countries will continue to
engage in a process on mitigation opportunities and will put added focus on adaptation opportunities.
Additionally, they will work to define a clear roadmap on ratcheting up climate finance to USD 100
billion by 2020.

 The already broad and ambitious efforts of developing countries to build their own clean, climate-
resilient futures will be supported by scaled-up finance from developed countries and voluntary
contributions from other countries.

 Governments decided that they will work to define a clear roadmap on ratcheting up climate
finance to USD 100 billion by 2020 while also before 2025 setting a new goal on the provision of
finance from the USD 100 billion floor.
 The agreement includes a transparency framework for both action and support. The framework will
provide clarity on countries’ mitigation and adaptation actions, as well as the provision of support. At
the same time, it recognizes that Least Developed Countries and Small Island Developing States have
special circumstances. 

 The agreement includes a global stocktake starting in 2023 to assess the collective progress
towards the goals of the agreement. The stocktake will be done every five years.

 The agreement includes a compliance mechanism, overseen by a committee of experts that

operates in a non-punitive way.

The Paris Agreement acknowledges and recognizes the development imperatives of developing countries,
supports their right to develop and their efforts to harmonize development with environment. The important
feature is that the Agreement refers to the differentiation between the actions of developed and developing
countries in all its relevant clauses and the principle of common but differentiated responsibilities in the light
of different national circumstances has been maintained across all pillars of the agreement.

On 20 April 2016, the Union Cabinet chaired by the Prime Minister Shri Narendra Modi gave its approval
for signing the Paris Agreement. Minister of State (Independent Charge) of Environment, Forest and
Climate Change, Shri Prakash Javadekar, signed the agreement on behalf of India on 22 April 2016.

Environment Impact Assessment (EIA) in India

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The Environmental Impact Assessment (EIA) is a management tool to minimize adverse impacts of
developmental projects on the environment and to achieve sustainable development through timely,
adequate, corrective and protective mitigation measures.

The Ministry of Environment and Forests (MoEF) uses Environmental Impact Assessment Notification

2006 as a major tool for minimizing the adverse impact of rapid industrialization on environment and for
reversing those trends which may lead to climate change in long run.

EIA 2006 was issued on 14th September 2006, in supersession of EIA 1994, except in respect of things
done or omitted to be done before such supersession. The Notification is issued under relevant provisions
of the Environment (Protection) Act, 1986.

Since EIA 2006, the various developmental projects have been re-categorised into category ‘A’ and
category ‘B’ depending on their threshold capacity and likely pollution potential, requiring prior
Environmental Clearance (EC) respectively from MoEF or the concerned State Environmental Impact
Assessment Authorities (SEIAAs). Where state level authorities have not been constituted, the clearance
would be provided by the MoEF. Further, the notification provides for screening (determining whether or not
the project or activity requires further environmental studies for preparation of EIA), scoping (determining
the detailed and comprehensive Terms of Reference (TOR), addressing all relevant environmental
concerns /questions for the preparation of an EIA Report), public consultation (ascertaining concerns of
affected persons) and appraisal of project proposals (based on the public consultations and final EIA
report).

Environmental clearance is required in respect of all new projects or activities listed in the Schedule to the
2006 notification and their expansion and modernization, including any change in product –mix.

The amendments to EIA Notification of 1st December 2009 exempts environmental clearance process the
biomass based power plants up to 15 MW, power plants based on non hazardous municipal solid waste
and power plants based on waste heat recovery boilers without using auxiliary fuel.

National Action Plan on Climate Change (NAPCC)

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The Action Plan was released on 30th June 2008. It effectively pulls together a number of the government’s
existing national plans on water, renewable energy, energy efficiency agriculture and others – bundled with
additional ones – into a set of eight missions. The Prime Minister’s Council on Climate Change is in charge
of the overall implementation of the plan. The plan document elaborates on a unique approach to reduce
the stress of climate change and uses the poverty-growth linkage to make its point. Emphasizing the
overriding priority of maintaining high economic growth rates to raise living standards, the plan “identifies
measures that promote development objectives while also yielding co-benefits for addressing climate
change effectively.” It says these national measures would be more successful with assistance from
developed countries, and pledges that India’s per capita greenhouse gas emissions “will at no point exceed
that of developed countries even as we pursue our development objectives.”

Plan in a Nutshell

The guiding principles of the plan are:

 Inclusive and sustainable development strategy to protect the poor

 Qualitative change in the method through which the national growth objectives will be
achieved i.e. by enhancing ecological sustainability leading to further mitigation

 Cost effective strategies for end use demand side management

 Deployment of appropriate technologies for extensive and accelerated adaptation, and

mitigation of green house gases

 Innovative market, regulatory and voluntary mechanisms to promote Sustainable Development

 Implementation through linkages with civil society, local governments and public-private
partnerships

 International cooperation, transfer of technology and funding

National Missions

The core of the implementation of the Action plan are constituted by the following eight missions, that
will be responsible for achieving the broad goals of adaptation and mitigation, as applicable.

 National Solar Mission: The NAPCC aims to promote the development and use of solar
energy for power generation and other uses with the ultimate objective of making solar
competitive with fossil-based energy options. The plan includes: Specific goals for increasing
use of solar thermal technologies in urban areas, industry, and commercial establishments; a
goal of increasing production of photo-voltaic to 1000 MW/year; and a goal of deploying at
least 1000 MW of solar thermal power generation. Other objectives include the establishment
of a solar research centre, increased international collaboration on technology development,
strengthening of domestic manufacturing capacity, and increased government funding and
international support.

 National Mission for Enhanced Energy Efficiency: Current initiatives are expected to yield
savings of 10,000 MW by 2012. Building on the Energy Conservation Act 2001, the plan
recommends: Mandating specific energy consumption decreases in large energy-consuming
industries, with a system for companies to trade energy-savings certificates; Energy
incentives, including reduced taxes on energy-efficient appliances; and Financing for public-
private partnerships to reduce energy consumption through demand-side management
programs in the municipal, buildings and agricultural sectors.

 National Mission on Sustainable Habitat: To promote energy efficiency as a core component

of urban planning, the plan calls for: Extending the existing Energy Conservation Building
Code; A greater emphasis on urban waste management and recycling, including power
production from waste; Strengthening the enforcement of automotive fuel economy standards
and using pricing measures to encourage the purchase of efficient vehicles; and Incentives for
the use of public transportation.

 National Water Mission: With water scarcity projected to worsen as a result of climate change,
the plan sets a goal of a 20% improvement in water use efficiency through pricing and other
measures.

 National Mission for Sustaining the Himalayan Ecosystem: The plan aims to conserve
biodiversity, forest cover, and other ecological values in the Himalayan region, where glaciers
that are a major source of India’s water supply are projected to recede as a result of global
warming.

 National Mission for a “Green India”: Goals include the afforestation of 6 million hectares of
degraded forest lands and expanding forest cover from 23% to 33% of India’s territory.

 National Mission for Sustainable Agriculture: The plan aims to support climate adaptation in
agriculture through the development of climate-resilient crops, expansion of weather insurance
mechanisms, and agricultural practices.
 National Mission on Strategic Knowledge for Climate Change: To gain a better understanding
of climate science, impacts and challenges, the plan envisions a new Climate Science
Research Fund, improved climate modeling, and increased international collaboration. It also
encourages private sector initiatives to develop adaptation and mitigation technologies through
venture capital funds.

The NAPCC also describes other ongoing initiatives, including:

 Power Generation: The government is mandating the retirement of inefficient coal-fired power
plants and supporting the research and development of IGCC and supercritical technologies.

 Renewable Energy: Under the Electricity Act 2003 and the National Tariff Policy 2006, the
central and the state electricity regulatory commissions must purchase a certain percentage of
grid-based power from renewable sources.

 Energy Efficiency: Under the Energy Conservation Act 2001, large energy consuming
industries are required to undertake energy audits and an energy labeling program for
appliances has been introduced.

Implementation

Ministries with lead responsibility for each of the missions are directed to develop
objectives, implementation strategies, timelines, and monitoring and evaluation criteria, to
be submitted to the Prime Minister’s Council on Climate Change. The Council will also be
responsible for periodically reviewing and reporting on each mission’s progress. To be
able to quantify progress, appropriate indicators and methodologies will be developed to
assess both avoided emissions and adaptation benefits. Further, as on July 2015, around
27 States and 5 Union Territories have prepared State Action Plan on Climate Change
(SAPCC) consistent with the objectives of NAPCC, focusing on the state specific issues
relating to climate change and strategies to tackle them.