Changes in Global Atomic Policy
The 2005 Nobel Peace Prize was awarded jointly to the International Atomic Energy Agency (IAEA) and Mohamed El Baradei in lieu of their work in preventing military use of nuclear energy and for their efforts towards the safest possible standards of the use of nuclear for peaceful purposes.
The United Nations (UN) is aware that the UN came to fore at the dawn of the nuclear age late into the 1940s. The environment and atomic policy of the UN as such was greatly shaped by this fact.
On July 7, 2017, many member states meeting in New York in a UN Conference signed into the Treaty on the Prohibition of Nuclear Weapons, which represents the first legal instrument multilaterally binding member states for nuclear disarmament in the last 20 years. The vote consisted of 122 ayes in favour of the treaty and only 1 nay by the Netherlands against the treaty.
The treaty covers a wide range of nuclear weaponization activities including the developing, testing, production, manufacture, acquisition, possession and stockpiling of nuclear armaments as well as the issuing of threats to use nuclear armaments (UN News Centre, 2017). Although the UN’s previous Non-Proliferation Treaty (NPT) of 1968 included 191 signatories, many countries like North Korea continue to attempt to transcend limitations imposed by the NPT.
IAEA’s Engagement with the Environment and Atomic Policy of the UN
The IAEA and its relationship with the UN is critical in light of the non-proliferation of nuclear weapons, which follows a general agreement entered into by the two bodies in 1957 such that the IAEA is to work in conformity with the policies of the UN. This greatly helps the IAEA in achieving its goal of worldwide nuclear disarmament by working in a partnership with organizations connected to the UN’s system.
This also helps the IAEA in encouraging the peaceful use of nuclear energy in accordance with the legal regime provided by the UN. In this the IAEA partners with various agencies within the UN including the United Nations Environment Programme. Some of these partnerships include partnerships with the World Health Organization (WHO) in cancer control and treatment, which is a major consequence of exposure to lethal radiation, and the United Nations Industrial Development Organization (UNIDO) in moving towards a green economy with cleaner nuclear production and disposal.
The IAEA’s involvement with the United Nations Environment Programme (UNEP) is critical, and both have a stated aim to co-operate on issues such as the UN’s environmental policy, nuclear waste management, nuclear resource efficiency and climate change. Both have a role in shaping the environment and atomic policy of the UN. The co-operation between the UNEP and the IAEA began in 1974, when both entered into a project based on the IAEA’s Laboratory for Marine Radioactivity Studies located in Monaco.
The IAEA and the UNEP entered into a Practical Arrangement in 2014 that looked to govern collaboration between the two bodies. The focus of the Practical Arrangement was to foster co-operation specifically in terms of climate change, management of ecosystems, efficient and sustainable use of resources, hazardous waste disposal and in influencing environmental policy.
In the collaboration framework provided in this Practical Arrangement, both bodies are to work together to support members to the UNEP and member states of the IAEA to provide support in developing scientific capabilities, meet environmental challenges, achieving resource sustainability and deal with the variability caused by climate change (IAEA, 2017).
The IAEA’s overall legal framework for safety requirements in the peaceful use of nuclear energy is met by the only legal policy to implement safety standards in managing radioactive wastes internationally – the Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management.
The Joint Convention seeks to achieve nuclear safety through an international collaborative approach based on the sharing of expertise on radioactive wastes and spent fuel management. The Convention fixes international safety standards and measures to ensure nuclear safety based on agreements between stakeholders and it strives to achieve national arrangements in individual countries based on the standards agreed upon in the convention.
The Convention also includes clauses that facilitate individual countries with improper infrastructures to receive international assistance in case of a lack of resources. The Convention applies both to countries with nuclear power programmes and those using radiation sources for industrial and commercial purposes (IAEA, 2011). The UNEP thus forms part of the IAEA’s collaborative approach that aims to build consensus on issues of nuclear safety.
Under the NPT of 1968, the IAEA conducts on-site inspections of nuclear materials in countries to ensure nuclear safety. Other than this, the UN also has the legal document of the UN Conference on Disarmament, which was adopted in 1996 to promote nuclear disarmament. In addition the UN also has the Committee on the Peaceful Uses of Outer Space for the curbing the use of nuclear armaments in outer space and the UN Scientific Committee on the Effects of Nuclear Radiation to report on safety standards on the effects of exposure to nuclear radiation worldwide. The UN also has the Convention on the Physical Protection of Nuclear Material, 1980 to protect nuclear material from falling into the wrong hands (UN, 2017).
The UNEP does not consider nuclear power as a renewable source of energy, with its principal problem with nuclear power being the disposal of radioactive wastes. The UNEP fears environmental contamination by nuclear waste such as spent nuclear waste pools of water. Nuclear power and fuel also pose security threats, which can immensely increase contamination risks. The UNEP is also opposed to nuclear power plants being built near populated areas and the dependence of certain countries such as France and Japan on nuclear power.
The UNEP also feels that nuclear power plants are outside the reach of underdeveloped countries, imposing an unfair balance of trade for the poorer nations (UNEP, 2016). The UNEP stands for strict safety standards for nuclear power plants and views nuclear waste as a source for severe forms of contamination and pollution.
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Petrol in India is cheaper than in countries like Hong Kong, Germany and the UK but costlier than in China, Brazil, Japan, the US, Russia, Pakistan and Sri Lanka, a Bank of Baroda Economics Research report showed.
Rising fuel prices in India have led to considerable debate on which government, state or central, should be lowering their taxes to keep prices under control.
The rise in fuel prices is mainly due to the global price of crude oil (raw material for making petrol and diesel) going up. Further, a stronger dollar has added to the cost of crude oil.
Amongst comparable countries (per capita wise), prices in India are higher than those in Vietnam, Kenya, Ukraine, Bangladesh, Nepal, Pakistan, Sri Lanka, and Venezuela. Countries that are major oil producers have much lower prices.
In the report, the Philippines has a comparable petrol price but has a per capita income higher than India by over 50 per cent.
Countries which have a lower per capita income like Kenya, Bangladesh, Nepal, Pakistan, and Venezuela have much lower prices of petrol and hence are impacted less than India.
“Therefore there is still a strong case for the government to consider lowering the taxes on fuel to protect the interest of the people,” the report argued.
India is the world’s third-biggest oil consuming and importing nation. It imports 85 per cent of its oil needs and so prices retail fuel at import parity rates.
With the global surge in energy prices, the cost of producing petrol, diesel and other petroleum products also went up for oil companies in India.
They raised petrol and diesel prices by Rs 10 a litre in just over a fortnight beginning March 22 but hit a pause button soon after as the move faced criticism and the opposition parties asked the government to cut taxes instead.
India imports most of its oil from a group of countries called the ‘OPEC +’ (i.e, Iran, Iraq, Saudi Arabia, Venezuela, Kuwait, United Arab Emirates, Russia, etc), which produces 40% of the world’s crude oil.
As they have the power to dictate fuel supply and prices, their decision of limiting the global supply reduces supply in India, thus raising prices
The government charges about 167% tax (excise) on petrol and 129% on diesel as compared to US (20%), UK (62%), Italy and Germany (65%).
The abominable excise duty is 2/3rd of the cost, and the base price, dealer commission and freight form the rest.
Here is an approximate break-up (in Rs):
a)Base Price | 39 |
b)Freight | 0.34 |
c) Price Charged to Dealers = (a+b) | 39.34 |
d) Excise Duty | 40.17 |
e) Dealer Commission | 4.68 |
f) VAT | 25.35 |
g) Retail Selling Price | 109.54 |
Looked closely, much of the cost of petrol and diesel is due to higher tax rate by govt, specifically excise duty.
So the question is why government is not reducing the prices ?
India, being a developing country, it does require gigantic amount of funding for its infrastructure projects as well as welfare schemes.
However, we as a society is yet to be tax-compliant. Many people evade the direct tax and that’s the reason why govt’s hands are tied. Govt. needs the money to fund various programs and at the same time it is not generating enough revenue from direct taxes.
That’s the reason why, govt is bumping up its revenue through higher indirect taxes such as GST or excise duty as in the case of petrol and diesel.
Direct taxes are progressive as it taxes according to an individuals’ income however indirect tax such as excise duty or GST are regressive in the sense that the poorest of the poor and richest of the rich have to pay the same amount.
Does not matter, if you are an auto-driver or owner of a Mercedes, end of the day both pay the same price for petrol/diesel-that’s why it is regressive in nature.
But unlike direct tax where tax evasion is rampant, indirect tax can not be evaded due to their very nature and as long as huge no of Indians keep evading direct taxes, indirect tax such as excise duty will be difficult for the govt to reduce, because it may reduce the revenue and hamper may programs of the govt.