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19/04/2021 - Environment

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April 19, 2021

Green contracts can be a major milestone in the country’s story of sustainable growth and economic development. Explain (200 Words)

Refer - The Hindu

Enrich the answer from other sources, if the question demands.

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IAS Parliament 3 years

KEY POINTS

While the massive levels of production, consumption and disposal of goods and services have their own set of benefits in a post-industrial society, they have also slowed down the replenishment cycle of limited resources.

Green contracts

·        ‘Green contracts’ refer to commercial contracts which mandate that contracting parties cut down greenhouse gas emissions at different stages of delivery of goods/services as applicable to the industry.

·        A ‘green tender’ may prescribe necessary ‘green qualifications’, which can be considered when awarding the contract to a bidder.

·        These green qualifications can range from using a pre-defined percentage of ‘green energy’ in service delivery to adequate on-site waste management, reducing carbon emissions by a certain level over period of time, etc.

·        It is this obligatory nature of green contracts which sets the tone for the parties to cut down emissions.

·        This can be achieved by contractual clauses providing for the use of good quality and energy-efficient infrastructure for production of goods/services, efforts in day-to-day operations such as reducing noise, air and water pollution.

·        One effective way to make sure that the service providers adhere to these contractual obligations would be to provide for measurement criteria and audit of the performance of the contractor.

·        An organisation may also choose to contractually highlight non-performance of such obligations as a ground of contractual breach, with penalty prescriptions.

·        Another way to make sure that these obligations under the green contracts resonate far is to make sure that they flow down to all levels of the supply chain engaged in the delivery of goods and services.

 

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