Current Affairs for UPSC IAS Exam – 3 November 2021 | Legacy IAS Academy

Contents

1. CoP26 summit: On Methane, Forests and Climate finance
2. CoP26 summit: ‘Infrastructure for Resilient Island States’
3. CoP26 summit: One Sun One World One Grid
4. RBI issues revised PCA framework for banks

CoP26 summit: On Methane, Forests and Climate finance

Context:

Leaders at the CoP26 global climate conference in Glasgow have pledged to stop deforestation by the end of the decade and slash emissions of the potent greenhouse gas methane to help slow climate change.

India said that climate finance cannot continue at the levels decided in 2009, and emphasised that it should be at least $1 trillion to meet the goals of addressing climate change.

Relevance:

GS-III: Environment and Ecology (Conservation of the Environment, International Treaties and Agreements), GS-II: International Relations (India’s neighbors, Foreign Policies affecting India’s Interests)

Dimensions of the Article:

1. COP26 on Ending deforestation
2. COP16 on Reducing methane emissions
3. India on Climate Finance at the COP26
4. Meeting of Like-Minded Developing Countries (LMDC)

COP26 on Ending deforestation

• In the COP26 climate summit’s first major deal, leaders at the COP26 global climate conference have pledged to stop deforestation by 2030 to help slow climate change. According to the Global Forest Watch, in 2020 the world lost 2,58,000 sq. km of forests.
• Felling trees contributes to climate change because it depletes forests that absorb vast amounts of the warming gas CO2.
• This agreement expands a commitment by 40 countries as part of the 2014 New York Declaration of Forests. The New York Declaration on Forests is a voluntary and non-legally binding political declaration adopted in 2014. The Declaration pledges to halve the rate of deforestation by 2020, to end it by 2030, and to restore hundreds of millions of acres of degraded land.
• Over 100 national leaders have pledged to halt and reverse deforestation and land degradation by the end of the decade. Brazil – where stretches of the Amazon rainforest have been cut down – was also among the signatories.
• The pledge includes almost £14bn ($19.2bn) of public and private funds to invest in protecting and restoring forests. Some of the funding will go to developing countries to restore damaged land, tackle wildfires and support indigenous communities. Under the agreement, 12 countries pledged to provide $12 billion of public funding between 2021 and 2025 for developing countries to restore degraded land and tackle wildfires.
• Governments of 28 countries also committed to removing deforestation from the global trade of food including animal husbandry and other agricultural products such as palm oil, soya and cocoa. These industries drive forest loss by cutting down trees to make space for animals to graze or crops to grow.
• More than 30 of the world’s biggest financial companies have also promised to end investment in activities linked to deforestation.
• Though the environmental experts have welcomed the move, they have also warned on how a previous deal in 2014 had failed to slow deforestation at all.

COP16 on Reducing methane emissions

• While the main focus of efforts to curb global warming has been on carbon dioxide, experts point out that cutting methane emissions could be one of the most effective interventions to reduce near-term global warming. Although there’s more CO2 in the atmosphere and it sticks around for longer, individual methane molecules have a more powerful warming effect on the atmosphere than single CO2 molecules given its higher Global Warming Potential (GWP). The Global Warming Potential (GWP) of a greenhouse gas is its ability to trap extra heat in the atmosphere over time relative to carbon dioxide (CO2).
• Methane is one of the most potent greenhouse gases and is responsible for a third of current warming from human activities. Some of the major sources of methane emissions include animal husbandry, landfill waste and oil and gas production.
• The US and the EU have announced a global partnership to cut emissions of the greenhouse gas methane by 2030. The Global Methane Pledge aims to slash methane emissions by 30% by 2030 compared with 2020 levels.
• Nearly 90 countries have pledged support to this U.S. and EU-led effort. The Global Methane Pledge, first announced in September, now covers emissions from two-thirds of the global economy. While Brazil, one of the five biggest emitters of methane, has signed up, three other large emitter nations — China, Russia and India — have not signed up.

India on Climate Finance at the COP26

• India said that climate finance cannot continue at the levels decided in 2009, and emphasised that it should be at least $1 trillion to meet the goals of addressing climate change.
• Speaking at the Ministerial meeting of Like-Minded Developing Countries (LMDC) at the 26th international climate conference under way in Glasgow, India also called upon the LMDC countries to work closely to protect their interests.
• India said that climate finance should be at least $1 trillion to meet the goals of addressing climate change and there should be a system to monitor climate finance as we have for monitoring mitigation.

Meeting of Like-Minded Developing Countries (LMDC)

• Speaking at the Ministerial meeting of Like-Minded Developing Countries (LMDC) at the 26th international climate conference, Indian Union Environment Minister called upon the LMDC countries to work closely to protect the common interests of the Global South in the ongoing climate negotiations.
• Indian Environment Minister pointed out that the climate finance targets cannot continue at the levels decided in 2009, and emphasised that it should be at least $1 trillion. He also called for a system to monitor climate finance.
• The Minister requested the LMDC members to join hands with India to support the global initiatives it has pioneered, including the International Solar Alliance (ISA), Coalition for Disaster Resilient Infrastructure (CDRI) and the Leadership Group for Industry Transition (LeadIT).
• LeadIT is launched by India and Sweden along with the World Economic Forum with the support of the Stockholm Environment Institute in 2019 during the United Nations Secretary-General Climate Action Summit. Currently, the Group has a membership of 13 countries and 15 companies, including Dalmia Cement, Mahindra Group and SpiceJet from India, committed towards low carbon industry transition.

-Source: The Hindu

CoP26 summit: ‘Infrastructure for Resilient Island States’

Context:

India launched the Initiative for the Resilient Island States (IRIS) for developing infrastructure of small island nations, saying that it gives a new hope, a new confidence and satisfaction of doing something for the most vulnerable countries.

Relevance:

GS-III: Environment and Ecology (Conservation of the Environment, International Treaties and Agreements), GS-II: International Relations (India’s neighbors, Foreign Policies affecting India’s Interests)

Dimensions of the Article:

1. Infrastructure for Resilient Island States (IRIS)
2. Coalition for Disaster Resilient Infrastructure (CDRI)

Infrastructure for Resilient Island States (IRIS)

• India has launched the Infrastructure for Resilient Island States (IRIS) initiative for developing the infrastructure of small island nations.
• IRIS initiative becomes critical given that these small island nations remain the most vulnerable countries facing the biggest threat from climate change. They face an existential threat due to climate change.
• The IRIS is a part of the Coalition for Disaster Resilient Infrastructure (CDRI) initiative. The Coalition for Disaster Resilient Infrastructure (CDRI) is a multi-stakeholder global partnership of national governments, UN agencies and programmes, multilateral development banks and financing mechanisms, the private sector, and knowledge institutions, launched at the UN Climate Action Summit of 2019. It aims to promote the resilience of new and existing infrastructure systems to climate and disaster risks in support of sustainable development.
• The new initiative is the result of cooperation between India, the U.K. and Australia and included the participation of leaders of small island nations such as Fiji, Jamaica and Mauritius.
• The initiative would involve setting up norms and standards for resilient infrastructure in small island states and coastal areas. IRIS would focus on building capacity, having pilot projects in small island developing states. The promotion of quality infrastructure in the Small Island States will benefit both lives and livelihoods in such states.
• India’s space agency ISRO will build a special data window for the small island nations to provide them timely information about cyclones, coral-reef monitoring, coast-line monitoring through satellite.
• The initiative will make it easy for SIDS to mobilise technology, finance and necessary information faster and more effectively.

Coalition for Disaster Resilient Infrastructure (CDRI)

• The Coalition for Disaster Resilient Infrastructure (CDRI) is an international coalition of countries, United Nations (UN) agencies, multilateral development banks, the private sector, and academic institutions, that aims to promote disaster-resiliant infrastructure.
• Its objective is to promote research and knowledge sharing in the fields of infrastructure risk management, standards, financing, and recovery mechanisms.
• CDRI’s initial focus is on developing disaster-resilience in ecological, social, and economic infrastructure.
• It aims to achieve substantial changes in member countries’ policy frameworks and future infrastructure investments, along with a major decrease in the economic losses suffered due to disasters.

-Source: The Hindu

CoP26 summit: One Sun One World One Grid

Context:

One Sun One World One Grid group — and was announced at COP26 by summit host United Kingdom’s Prime Minister and Indian Prime Minister

Relevance:

GS-III: Environment and Ecology (Conservation of the Environment, International Treaties and Agreements), GS-II: International Relations (India’s neighbors, Foreign Policies affecting India’s Interests), GS-III: Industry and Infrastructure (Solar Energy, Renewable Energy), GS-III: Science and Technology (Indigenization of Technology)

Dimensions of the Article:

1. One Sun One World One Grid (OSOWOG)
2. How would the OSOWOG work?

One Sun One World One Grid (OSOWOG)

• The One Sun One World One Grid (OSOWOG) aims to connect energy grids across borders to facilitate a faster transition to the use of renewable energy.
• India had first proposed connecting solar energy supply across borders at the International Solar Alliance in 2018 to allow parts of the world with excess renewable power to send power to other countries.
• The proposal is aimed at addressing the issue of reliability of supply from solar power plants, which do not generate electricity after the sun has set.
• OSOWOG is also aimed at addressing the issue of high cost of energy storage.
• The new Global Green Grids Initiative One Sun One World One Grid (GGI-OSOWOG) is an evolution of the International Solar Alliance’s OSOWOG multilateral drive to foster interconnected solar energy infrastructure at a global scale.
• India, Bhutan, Bangladesh, Myanmar and Nepal already share transmission capacity for energy transfer across borders which can be expanded further and utilised for the transfer of solar power between these countries.

How would the OSOWOG work?

• This initiative aims to tap solar energy and have it travel seamlessly across borders. The initiative will work towards accelerating the making of large solar power stations and wind farms in the best locations, linked together by continental-scale grids crossing national borders.
• The sun offers a huge source of energy for mankind. All the energy humanity uses in a year is equal to the energy that reaches the earth from the sun in a single hour.
• Given that the sun never sets and that half the planet is always receiving sunlight, there is the potential to harness solar energy continuously across the globe and trade this energy across borders to ensure adequate energy supply to meet the needs of everyone on earth.
• A transnational grid would allow countries to source solar power from regions where it is daytime to meet their green energy needs even when their own installed solar capacity is not generating energy.
• This initiative will bring together an international coalition of national governments, financial organisations, and power system operators.

OSOWOG can help to:

1. prevent dangerous climate change
2. meet the targets of the Paris Agreement
3. accelerate the clean energy transition
4. achieve the Sustainable Development Goals
5. stimulate green investments
6. create millions of good jobs

What are the challenges to the OSOWOG project?

• The project is seen as an Indian endeavour for world leadership but under Covid-19 uncertainties, the geopolitical implications of projects like OSOWOG are hard to decipher.
• The mechanism of cost-sharing will be challenging, given the varied priorities of participating countries depending on their socio-economic orders.
• In India, the major issue of renewable energy developers is to deal with different state governments and hence, different laws and regulations.
• The transmission of power across vast distances would require large capital investment to set up long transmission lines.
• Experts have pointed out that transmission across great distances can potentially be very expensive.
• There is a difference in voltage, frequency and specifications of the grid in most regions. Maintaining grid stability with just renewable generation would be technically difficult.

-Source: The Hindu

RBI issues revised PCA framework for banks

Context:

The RBI has issued a revised Prompt Corrective Action (PCA) framework which will be effective from January 1, 2022.

Relevance:

GS-III: Indian Economy (Growth and Development of Indian Economy, Banking, NPAs)

Dimensions of the Article:

1. What is Prompt Corrective Action Framework (PCA)?
2. More about Prompt Corrective Action (PCA)

What is Prompt Corrective Action Framework (PCA)?

• Prompt Corrective Action (PCA) Framework is a framework under which banks with weak financial metrics are put under watch by the RBI.
• The RBI introduced the PCA framework in 2002 as a structured early-intervention mechanism for banks that become undercapitalised due to poor asset quality, or vulnerable due to loss of profitability.
• It aims to check the problem of Non-Performing Assets (NPAs) in the Indian banking sector.
• The framework was reviewed in 2017 based on the recommendations of the working group of the Financial Stability and Development Council on Resolution Regimes for Financial Institutions in India and the Financial Sector Legislative Reforms Commission.
• PCA is intended to help alert the regulator as well as investors and depositors if a bank is heading for trouble.
• The idea is to head off problems before they attain crisis proportions.
• Essentially PCA helps RBI monitor key performance indicators of banks, and taking corrective measures, to restore the financial health of a bank.
• The PCA framework is applicable only to commercial banks (Separate framework for RRBs) and not extended to co-operative banks, non-banking financial companies (NBFCs).

More about Prompt Corrective Action (PCA)

• RBI’s Risk thresholds that invite corrective action from the central bank are created based on parameters such as:
  1. Capital to Risk weighted Asset Ratio (CRAR)/Capital Sufficiency
  2. Net Non-Performing Assets (NPA)
  3. Return on Assets (RoA)/Profitability
  4. Leverage ratio
• Different Risk thresholds ac as trigger points for a bank (like CRAR of 9%, 6%, 3% and Net NPAs between 10 to 15% ) and the RBI will initiate certain structured and discretionary actions for the bank.
  1. RBI giving strict warning, conducting deeper audit & supervision.
  2. Restricting bank’s directors’ salaries and dividend distribution to its investors.
  3. Restricting bank’s branch expansion & lending operations.
  4. Forcing merger / shutdown of a weak bank (under Banking regulation Act 1949).

-Source: The Hindu