Green Federalism: Inter-State Council Approves 60:40 Carbon Credit Revenue Sharing Formula

The consensus also revitalizes the Inter-State Council (Article 263) as a vital constitutional forum for resolving complex policy overlaps between the Centre and States. As India strives for its 'Net Zero' target by 2070, such fiscal incentives are crucial for encouraging sub-national competition in climate action—a concept often referred to as 'competitive green federalism.' However, the success of this framework will depend on the robustness of the Monitoring, Reporting, and Verification (MRV) protocols. States will need to enhance their technical capacity to quantify carbon sequestration accurately. Furthermore, the inclusion of local bodies in the remaining revenue share remains a critical area for future devolution to ensure that grassroots communities, who are the primary custodians of natural resources, also benefit. UPSC Relevance: This development is a prime example of cooperative federalism in the era of climate change, making it highly relevant for GS-II questions on the role of the Inter-State Council and GS-III questions on climate finance and conservation. It illustrates the evolution of fiscal federalism where environmental outcomes are now linked to revenue sharing, a point that can be used to enrich answers on India's strategy to achieve its NDC targets.