U.S., China ratify Paris climate deal
The move by the world’s two biggest polluters is a major step forward for the 180-nation accord, which sets ambitious goals for capping global warming and funnelling trillions of dollars to poor countries facing climate catastrophe.
Two biggest pollutors
China is responsible for almost a quarter of the world’s emissions, with the U.S. in second place on around 15 per cent, so their participation is crucial.
The Paris pact calls for capping global warming at well below two degrees Celsius (3.6 degrees Fahrenheit), and 1.5 C (2.7 F) if possible, compared with pre-industrial levels.
Individual commitments
Under the Paris accord, China has pledged to cut its carbon emissions per unit of GDP by 60-65 per cent from 2005 levels by 2030 and increase non-fossil fuel sources in primary energy consumption to about 20 per cent. In its Paris commitment, the U.S. promised to cut its own emissions 26-28 per cent below 2005 levels by 2025.
Giant panda no longer endangered, experts say
The International Union for Conservation of Nature said in a report that the panda is now classified as a “vulnerable” instead of “endangered” species, reflecting its growing numbers in the wild in southern China. It said the wild panda population jumped to 1,864 in 2014 from 1,596 in 2004, the result of work by Chinese agencies to enforce poaching bans and expand forest reserves.
The report warned, however, that although better forest protection has helped increase panda numbers, climate change is predicted to eliminate more than 35 per cent of its natural bamboo habitat in the next 80 years, potentially leading to another decline.
CSCs may assemble LED lamps to boost rural economy:-
Looking at tapping the 2.29 lakh Common Service Centers (CSCs) in the country to boost rural economy, the government plans to enable assembly and manufacturing of LED lights at these centers.
CSCs can be a great system for generating revenues and employment in rural India. Making LEDs is not tough…all these will be bought by Energy Efficiency Services Ltd (EESL),
20 nations for global forum to address excess steel capacity
Major steel producers China, India and Japan along with other G20 nations have called for increased sharing of information as well as more cooperation by forming a global forum to address the issue of excess steel capacity.
The development assumes significance in the backdrop of the problem caused in international markets due to excess steel capacity amidst softening of prices, which eroded sales and profits of firms across countries, especially at a time when the global economy recovery is weak. The forum facilitates increased information sharing and cooperation.
This move also assumes significance as it comes in the backdrop of nations such as the U.S. imposing heavy duties on imports of cheap steel from countries such as China.
The decision was announced by G20 leaders recently. G20 leaders recognised the “structural problems, including excess capacity” in some industries, exacerbated by a weak global economic recovery and depressed market demand that have caused a negative impact on trade and workers.
The leaders also recognised that “subsidies and other types of support from government or government-sponsored institutions” can cause market distortions and contribute to global excess capacity and therefore require attention.
Indian Perspective :-
India, the world’s third largest steel producer, too is facing a spate of cheap imports from China, Japan and Korea.This has hit the sales and profits of domestic steel producers and also impacted their liquidity, which in turn has affected their capacity to repay loans and meet interest payment deadlines having a cascading effect on the number of non performing assets (NPAs) with the banks.
Steel sector in India accounts for the highest number of NPAs with the banks.
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Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.
This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.
It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.
The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.
Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.
India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.
More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.
An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.
India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.
Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.
And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.
A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.
We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.
We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.
In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.