1)Chinese Yuan may get reserve currency status:-
- Reserve Currency:- A foreign currency held by central banks and other major financial institutions as a means to pay off international debt obligations, or to influence their domestic exchange rate. A large percentage of commodities, such as gold and oil, are usually priced in the reserve currency, causing other countries to hold this currency to pay for these goods. Holding currency reserves, therefore, minimizes exchange rate risk, as the purchasing nation will not have to exchange their currency for the current reserve currency in order to make the purchase.
- Major Reserve Currency :-
- United States dollar
- Euro
- Pound Sterling
- Japanese Yen
- Swiss Franc
- Canadian Dollar
- Chinese Yuan:-The Chinese yuan or renminbi (RMB) cannot be used as a reserve currency as long as the Chinese government maintains capital controls on the conversion of its currency.Holding the currency would not be attractive to central banks unless China develops a strong open bond market.The Bank for International Settlements estimates that in 2010 around 0.9% of all currency market transactions were carried out in renminbi.
- International Monetary Fund representatives have given China strong signals that the yuan is likely to soon join the fund’s basket of reserve currencies, known as Special Drawing Rights.
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What is a Special Drawing Right?
The fund created the SDR in 1969 to boost global liquidity as the Bretton Woods system of fixed exchange rates unraveled. While the SDR is not technically a currency, it gives IMF member countries who hold it the right to obtain any of the currencies in the basket — currently the dollar, euro, yen and pound — to meet balance-of-payments needs. So the ability to convert SDRs into yuan on demand is crucial. Its value is currently based on weighted rates for the four currencies.
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Why is the IMF likely to approve this?
Global use of the yuan has surged since the IMF rejected SDR inclusion in the last review in 2010. By one measure, the currency became the fourth most-used in global payments with a 2.79 percent share in August, surpassing the yen, according to the Society for Worldwide Interbank Financial Telecommunication, known as Swift.
- Once the Chinese yuan becomes part of the SDR, central-bank reserve managers and institutional investors will automatically want to accumulate yuan-denominated assets.
2) Particulate Matter :-
- News:- Delhi air Pollution has been a major cause of worry for the past years. The issue is compounded as Diwali is around the corner.
What is Particulate Matter (PM):-
Airborne particulate matter, which includes dust,dirt, soot, smoke, and liquid droplets emitted into the air, is small enough to be suspended in the atmosphere. Airborne particulates may be a complex mixture of organic and inorganic substances.They can be characterized by their physical attributes, which influence their transport and deposition, and their chemical composition,which influences their effect on health.
The physical attributes of airborne particulates include mass concentration and size distribution.Ambient levels of mass concentration are measured in micro grams per cubic meter (μg/m3); size attributes are usually measured in aerodynamic diameter
PM10 and PM2.5:-
Particulate matter (PM) exceeding 2.5 microns (μm) in aerodynamic diameter is generally defined as coarse particles, while particles smaller than 2.5 microns (PM2.5) are called fine particles.
Particles interact with various substances in the air to form organic or inorganic chemical compounds. The most common combinations of fine particles are those with sulfates.Additionally,atmospheric reactions of nitrogen oxides produce nitric acid vapor (HNO3) that may accumulate as nitrate particles in both fine and coarse forms.The
most common combination of coarse particles consists of oxides of silicon, aluminum, calcium, and iron.
Total suspended particulates (TSP) includes particles of various sizes. Some proportion of TSP consists of particles too large to enter the human respiratory tract; therefore, TSP is not a good indicator of health-related exposure.
The particles most likely to cause adverse health effects are the fine particulates PM10 and PM2.5 —particles smaller than 10 microns and 2.5 microns in aerodynamic diameter, respectively.
While all particles smaller than 10 microns in diameter can reach the human lungs, the retention rate is largest for the finer particles. PM10 can be jettisoned from body by coughing, sneezing etc but PM2.5 has a deeper penetration hence it is more dangerous.
Black Smoke:-
Black smoke (BS) is a particulate measure that typically contains at least 50% respirable particulates smaller than 4.5 mm in aerodynamic diameter.
Sources of Particulates:-
Some particulates come from natural sources such as evaporated sea spray, wind-borne pollen, dust, and volcanic or other geothermal eruptions. Particulates from natural sources tend to be coarse.
Almost all fine particulates are generated as a result of combustion processes, including the burning of fossil fuels for steam generation, heating and household cooking, agricultural field burning, diesel-fueled engine combustion, and various industrial processes.
Emissions from these anthropogenic sources tend to be in fine fractions. However, some industrial and other processes that produce large amounts of dust, such as cement
manufacturing, mining, stone crushing, and flour milling, tend to generate particles larger than 1 micron and mostly larger than 2.5 microns.
The largest stationary sources of particulate emissions include fossil-fuel-based thermal power plants, metallurgical processes, and cement manufacturing. The physical and chemical composition of particulate emissions is determined by the nature of pollution sources. Most particles emitted by anthropogenic sources are less than 2.5 microns in diameter and include a larger variety of toxic elements than particles emitted by natural sources.
Ground Level Ozone:-
Ground level or “bad” ozone is not emitted directly into the air, but is created by chemical reactions between oxides of nitrogen (NOx) and volatile organic compounds (VOC) in the presence of sunlight. Emissions from industrial facilities and electric utilities, motor vehicle exhaust, gasoline vapors, and chemical solvents are some of the major sources of NOx and VOC. Breathing ozone can trigger a variety of health problems, particularly for children, the elderly, and people of all ages who have lung diseases such as asthma. Ground level ozone can also have harmful effects on sensitive vegetation and ecosystems.
3)Reforms in FDI:-
Government has brought in FDI related Reforms and liberalisation touching upon 15 major Sectors of the Economy. The salient measures are:
- Limited Liability Partnerships, downstream investment and approval conditions.
- Investment by companies owned and controlled by Non-Resident Indians (NRIs)
- Establishment and transfer of ownership and control of Indian companies
- Agriculture and Animal Husbandry
- Plantation
- Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities
- Defence
- Broadcasting Sector
- Civil Aviation
- Increase of sectoral cap
- Construction development sector
- Cash and Carry Wholesale Trading / Wholesale Trading (including sourcing from MSEs)
- Single Brand Retail Trading and Duty free shops
- Banking-Private Sector; and
- Manufacturing Sector
The Crux of these reforms is to further ease, rationalise and simplify the process of foreign investments in the country and to put more and more FDI proposals on automatic route instead of Government route where time and energy of the investors is wasted.
4)UDAY :-Ujjwal Discom Assurance Yojana
UDAY provides for the financial turnaround and revival of Power Distribution companies (DISCOMs), and importantly also ensures a sustainable permanent solution to the problem.
The weakest link in the value chain is distribution, wherein DISCOMs in the country have accumulated losses of approximately Rs. 3.8 lakh crore and outstanding debt of approximately Rs. 4.3 lakh crore (as on March, 2015)
Financially stressed DISCOMs are not able to supply adequate power at affordable rates, which hampers quality of life and overall economic growth and development. Efforts towards 100% village electrification, 24X7 power supply and clean energy cannot be achieved without performing DISCOMs. Power outages also adversely affect national priorities like “Make in India” and “Digital India”. In addition, default on bank loans by financially stressed DISCOMs has the potential to seriously impact the banking sector and the economy at large.
UDAY assures the rise of vibrant and efficient DISCOMs through a permanent resolution of past as well as potential future issues of the sector. It empowers DISCOMs with the opportunity to break even in the next 2-3 years. This is through four initiatives:-
(i) Improving operational efficiencies of DISCOMs;
(ii) Reduction of cost of power;
(iii) Reduction in interest cost of DISCOMs;
(iv) Enforcing financial discipline on DISCOMs through alignment with State finances
Salient Features of UDAY :-
- States shall take over 75% of DISCOM debt as on 30 September 2015 over two years – 50% of DISCOM debt shall be taken over in 2015-16 and 25% in 2016-17.
- Government of India will not include the debt taken over by the States as per the above scheme in the calculation of fiscal deficit of respective States in the financial years 2015-16 and 2016-17.
- States will issue non-SLR including SDL bonds in the market or directly to the respective banks / Financial Institutions (FIs) holding the DISCOM debt to the appropriate extent.
- DISCOM debt not taken over by the State shall be converted by the Banks / FIs into loans or bonds with interest rate not more than the bank’s base rate plus 0.1%. Alternately, this debt may be fully or partly issued by the DISCOM as State guaranteed DISCOM bonds at the prevailing market rates which shall be equal to or less than bank base rate plus 0.1%.
- States shall take over the future losses of DISCOMs in a graded manner and shall fund them.
- State DISCOMs will comply with the Renewable Purchase Obligation (RPO) outstanding since 1st April, 2012, within a period to be decided in consultation with Ministry of Power.
- States accepting UDAY and performing as per operational milestones will be given additional / priority funding through Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY),Integrated Power Development Scheme (IPDS), Power Sector Development Fund (PSDF) or other such schemes of Ministry of Power and Ministry of New and Renewable Energy
- Such States shall also be supported with additional coal at notified prices and, in case of availability through higher capacity utilization, low cost power from NTPC and other Central Public Sector Undertakings (CPSUs).
- States not meeting operational milestones will be liable to forfeit their claim on IPDS and DDUGJY grants.
- UDAY is optional for all States. However, States are encouraged to take the benefit at the earliest as benefits are dependent on the performance.
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- Lowering Emissions by Accelerating Forest Finance (LEAF) Coalition, a collective of the United States, United Kingdom and Norway governments, came up with a $1 billion fund.
- LEAF is supported by transnational corporations (TNCs) like Unilever plc, Amazon.com, Inc, Nestle, Airbnb, Inc as well as Emergent, a US-based non-profit.
- The world lost more than 10 million hectares of primary tropical forest cover last year, an area roughly the size of Switzerland.
- Ending tropical and subtropical forest loss by 2030 is a crucial part of meeting global climate, biodiversity and sustainable development goals. Protecting tropical forests offers one of the biggest opportunities for climate action in the coming decade.
- Tropical forests are massive carbon sinks and by investing in their protection, public and private players are likely to stock up on their carbon credits.
- The LEAF coalition initiative is a step towards concretising the aims and objectives of the Reducing Emissions from Deforestation and Forest Degradation (REDD+) mechanism.
- REDD+ was created by the United Nations Framework Convention on Climate Change (UNFCCC). It monetised the value of carbon locked up in the tropical forests of most developing countries, thereby propelling these countries to help mitigate climate change.
- It is a unique initiative as it seeks to help developing countries in battling the double-edged sword of development versus ecological commitment.
- The initiative comes at a crucial time. The tropics have lost close to 12.2 million hectares (mha) of tree cover last year according to global estimates released by Global Forest Watch.
- Of this, a loss of 4.2 mha occurred within humid tropical primary forests alone. It should come as no surprise that most of these lost forests were located in the developing countries of Latin America, Africa and South Asia.
- Brazil has fared dismally on the parameter of ‘annual primary forest loss’ among all countries. It has lost 1.7 mha of primary forests that are rich storehouse of carbon. India’s estimated loss in 2020 stands at 20.8 kilo hectares.
- Between 2002-2020, Brazil’s total area of humid primary forest reduced by 7.7 per cent while India’s reduced by 3.4 per cent.
- Although the loss in India is not as drastic as in Brazil, its position is nevertheless precarious. For India, this loss is equivalent to 951 metric tonnes worth carbon dioxide emissions released in the atmosphere.
- It is important to draw comparisons between Brazil and India as both countries have adopted a rather lackadaisical attitude towards deforestation-induced climate change. The Brazilian government hardly did anything to control the massive fires that gutted the Amazon rainforest in 2019.
- It is mostly around May that forest fires peak in India. However, this year India, witnessed massive forest fires in early March in states like Odisha, Uttarakhand, Madhya Pradesh and Mizoram among others.
- The European Union’s Copernicus Atmospheric Monitoring Service claimed that 0.2 metric tonnes of carbon was emitted in the Uttarakhand forest fires.
- Implementation of the LEAF Coalition plan will help pump in fresh rigour among developing countries like India, that are reluctant to recognise the contributions of their forest dwelling populations in mitigating climate change.
- With the deadline for proposal submission fast approaching, India needs to act swiftly on a revised strategy.
- Although India has pledged to carry out its REDD+ commitments, it is impossible to do so without seeking knowledge from its forest dwelling population.
Context:-
At the recently concluded Leaders’ Summit on Climate in April 2021, Lowering Emissions by Accelerating Forest Finance (LEAF) Coalition, a collective of the United States, United Kingdom and Norway governments, came up with a $1 billion fund plan that shall be offered to countries committed to arrest the decline of their tropical forests by 2030.
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]What is LEAF Coalition?
Why LEAF Coalition?
Brazil & India
According to the UN-REDD programme, after the energy sector, deforestation accounts for massive carbon emissions — close to 11 per cent — in the atmosphere. Rapid urbanisation and commercialisation of forest produce are the main causes behind rampant deforestation across tropical forests.
Tribes, Forests and Government
Disregarding climate change as a valid excuse for the fires, Indian government officials were quick to lay the blame for deforestation on activities of forest dwellers and even labelled them “mischievous elements” and “unwanted elements”.
Policy makers around the world have emphasised the role of indigenous tribes and local communities in checking deforestation. These communities depend on forests for their survival as well as livelihood. Hence, they understand the need to protect forests. However, by posing legitimate environmental concerns as obstacles to real development, governments of developing countries swiftly avoid protection of forests and rights of forest dwellers.
For instance, the Government of India has not been forthcoming in recognising the socio-economic, civil, political or even cultural rights of forest dwellers. According to data from the Union Ministry of Tribal Affairs in December, 2020 over 55 per cent of this population has still not been granted either individual or community ownership of their lands.
To make matters worse, the government has undertaken systematic and sustained measures to render the landmark Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 ineffective in its implementation. The Act had sought to legitimise claims of forest dwellers on occupied forest land.
Various government decisions have seriously undermined the position of indigenous people within India. These include proposing amendments to the obsolete Indian Forest Act, 1927 that give forest officials the power to take away forest dwellers’ rights and to even use firearms with impunity.
There is also the Supreme Court’s order of February, 2019 directing state governments to evict illegal encroachers of forest land or millions of forest dwellers inhabiting forests since generations as a measure to conserve wildlife. Finally, there is the lack of data on novel coronavirus disease (COVID-19) deaths among the forest dwelling population;
Tardy administration, insufficient supervision, apathetic attitude and a lack of political intent defeat the cause of forest dwelling populations in India, thereby directly affecting efforts at arresting deforestation.
Way Forward
Tuntiak Katan, a global indigenous leader from Ecuador and general coordinator of the Global Alliance of Territorial Communities, aptly indicated the next steps at the Climate Summit:
“The first step is recognition of land rights. The second step is the recognition of the contributions of local communities and indigenous communities, meaning the contributions of indigenous peoples.We also need recognition of traditional knowledge practices in order to fight climate change”
Perhaps India can begin by taking the first step.