Daily Prelims Notes 11 November 2022

November 11, 2022
Posted by: OptimizeIAS Team
Category: DPN

Daily Prelims Notes

11 November 2022

Table Of Contents

Subject: Economy

Context:

Should retail investors park their money in debt instruments and funds for the medium term, or should they wait for rates to peak?

Details:

Returns on debt funds and instruments like non-convertible debentures (NCDs) are showing signs of improvement due to rise in repo rate, reverse repo rate and Standing Deposit Facility.
- The yield on the benchmark 10-year government bonds is also rising.
Optimal options amidst uncertain interest rate changes-Floating rate funds and low-maturity funds are likely to be sound investments.
- As fixed income yields have improved significantly and are likely to rise further, one can look at funds with maturities up to 3 years, which invest in high-quality papers like government bonds, PSU and bank bonds, AAA rated corporate bonds, credit risk funds, gilt fund and Dynamic bond funds.

Concept:

A debt fund is a mutual fund scheme that invests in fixed income instruments, such as Corporate and Government Bonds, corporate debt securities, and money market instruments etc. that offer capital appreciation.
- Debt funds are also referred to as Income Funds or Bond Funds.
Credit risk funds are debt funds that lend at least 65% of their money to not-so-highly rated companies. The borrowers pay higher interest charges as a way to compensate for their lower credit rating, which translates into a higher risk for the lender due to an increased possibility of default. Although these funds lend mostly for short duration, they are still one of the riskiest in the category.
Gilt funds are debt funds that invest primarily in government securities. These funds have no risk of non-payment of interest or principal amount but get affected by interest rate movements as the Government borrowing typically happens to be for a longer duration.
Dynamic bond funds are debt funds which invest in debt and money market instruments like Government Securities, corporate bonds etc of different durations. These funds are constructed in a way that allows fund managers to use interest rates movements in the economy as an opportunity to generate higher returns.
- If the fund manager expects interest rates to go down in the future, he / she will invest in longer term (longer duration) bonds with a view to earning profits from price appreciation.
- If the fund manager expects interest rates to go up in the future, he / she will invest in shorter term bonds to reduce interest rate risks and also re-invest maturity proceeds of the bonds at higher interest rates in the future.
Debentures are long-term financial instruments which acknowledge a debt obligation towards the issuer. Some debentures have a feature of convertibility into shares after a certain point of time at the discretion of the owner. The debentures which can’t be converted into shares or equities are called non-convertible debentures (or NCDs).
- Non-convertible debentures are used as tools to raise long-term funds by companies through a public issue. To compensate for this drawback of non-convertibility, lenders are usually given a higher rate of return compared to convertible debentures.
- An NCD can either be secured or unsecured.
  - A secured NCD is backed by the issuing company’s assets. This means that the company has to fulfill its debt obligation whatsoever. However, that’s not the case for unsecured NCDs. This makes secured NCDs safer since they have a lower default risk.
Public Sector Undertaking Bonds (PSU Bonds) are the bonds in which the government shareholding is generally more than 51%.
- It is a medium and long-term debt instrument issued by public sector companies.
- PSU Banks, power sector companies, railways, and other organisations issue PSU bonds as they have 51% of the government shareholding with them. These entities could be held by the central or state government.
- PSU Bonds are considered a secure option for investment.
A government bond is a debt instrument issued by the country’s central and state governments to finance their needs while also regulating the money supply.
- At the bond’s maturity date, the government will repay the principal and interest in accordance with the terms of the bond. The Reserve Bank of India supervises the issuance of government bonds.
- Types:
  - Treasury Bills: Treasury bills (also known as T-bills) are short-term government bonds. They are issued with a one-year maturity date. These bonds are issued by the government in three categories: 91 days, 182 days, and 364 days. The difference between the face value and the discounted value is the profit for the investors.
  - Cash Management Bills: These are short-term bonds with a high degree of flexibility. They are issued in response to the government’s funding requirements. They must usually be less than 91 days. It’s similar to treasury bills.
  - Dated Government Securities: This type of bond has variable interest rates. Dated Government securities are so-called because they have a predetermined maturity date. These bonds are auctioned off by the Reserve Bank of India.
  - Fixed-Rate Bonds: These government bonds have a fixed coupon rate for the duration of the bond. In other words, regardless of market rates, the interest rate remains constant for the duration of the investment.
  - Floating Rate Bonds: The interest rate on these bonds fluctuates throughout the investment period. Interest rates are changed at predetermined intervals before the bond is issued.
  - Zero-Coupon Bonds: Bonds with no coupon payments are known as zero-coupon bonds. Profits from these bonds are generated by the difference between the issue price and the redemption value.
  - Capital Index Bonds: These are bonds in which the principal amount is linked to an accepted inflation index. This bond is issued to protect investors’ principal from inflation.
  - Inflation-Indexed Bonds: Inflation-Indexed Bonds (IIBs) are bonds in which the principal and interest payments are linked to an inflation index. The Consumer Price Index (CPI) or the Wholesale Price Index (WPI) may be used to calculate inflation (WPI).
  - Bonds with a Call or Put Option: These bonds have an option that allows the issuer to buy back the bond (call option).
  - Sovereign Gold Bonds (SGBs): The prices of Sovereign Gold Bonds are linked to the price of gold (commodity price). The bond’s nominal value is based on the previous week’s simple average closing price of 99.99% purity gold.

2. National Pension Scheme and related schemes

Subject: Economy

Context:

The Finance minister said that the money in the National Pension Scheme (NPS) belongs to the people and as per law, can’t go back to state governments.

Details:

Certain states have asked the Centre to return the money under NPS for restarting the Old Pension Scheme in their states.

Concept:

OPS vs NPS:

As per the OPS – discontinued on April 1, 2004 – pension constituted 50 per cent of the last drawn salary of an employee.
This entire amount was paid by the government.
The government replaced this system with the national pension scheme (NPS) or contributory pension scheme for employees who joined on or after April 1, 2004.
- It is regulated under the PFRDA (The Pension Fund Regulatory & Development Authority) Act, 2013.
- NPS is being implemented and regulated by PFRDA in the country.
- National Pension System Trust (NPST) established by PFRDA is the registered owner of all assets under NPS.
- Under it every government employee is allotted a Permanent Retirement Account Number, and has to mandatorily contribute 10% of pay and dearness allowance to the pension fund, which is matched by the government.
  - After the latest amendment, in 2019, the government share of the contribution has been raised to 14% from 10%.
- This money can then be invested by fund managers.
- On retirement, the employee can withdraw 60% of the corpus but is required to invest at least 40% to purchase an annuity from an insurance firm regulated and registered by government authorities. The interest on the annuity is to be provided as a monthly pension to the employee.
- The Centre left it to states to adopt the new system, and the States have the power to roll it back.
- NPS is structured into two tiers:
  - Tier-I account: This is the non-withdrawable permanent retirement account into which the accumulations are deposited and invested as per the option of the subscriber.
  - Tier-II account: This is a voluntary withdrawable account which is allowed only when there is an active Tier I account in the name of the subscriber.
- Beneficiaries:
  - NPS was made available to all Citizens of India from May 2009.
  - Any individual citizen of India (both resident and Non-resident) in the age group of 18-65 years can join NPS.
  - However, OCI (Overseas Citizens of India) and PIO (Person of Indian Origin) card holders and Hindu Undivided Family (HUFs) are not eligible for opening of NPS accounts.

The differences:

The basic difference is that the NPS is a contribution-based pension system unlike the OPS where the entire amount was paid by the government.
In case of OPS benefit due was defined beforehand– 50 per cent of the last drawn salary of an employee while the NPS, the pension benefit is determined by factors such as the amount of contribution made, the age of joining, type of investment, and the income drawn from that investment.
- The minimum payment to retired employees as pension is ₹3,500 in the NPS.
NPS provides a pension fund on retirement which is 60 per cent tax-free on redemption while the rest needs to be invested in annuity which is fully taxable while the Income from OPS is not taxed.

Other related Schemes

Atal Pension Yojana:
- The scheme was launched in May, 2015, with the objective of creating a universal social security system for all Indians, especially the poor, the under-privileged and the workers in the unorganised sector.
- Administered By:-PFRDA through NPS.
- Eligibility: -Any citizen of India can join the APY scheme. The age of the subscriber should be between 18-40 years.
- The contribution levels would vary and would be low if a subscriber joins early and increases if she joins late.
Employees Pension Scheme (EPS):
- It is a social security scheme that was launched in 1995.
- The scheme, provided by EPFO, makes provisions for pensions for the employees in the organized sector after the retirement at the age of 58 years.
- Employees who are members of EPF automatically become members of EPS.
- Both employer and employee contribute 12% of employee’s monthly salary (basic wages plus dearness allowance) to the Employees’ Provident Fund (EPF) scheme.
- EPF scheme is mandatory for employees who draw a basic wage of Rs. 15,000 per month.

3. Municipal Bonds

Subject: Economy

Context:

Listing of municipal bonds in the stock exchanges can pave the way for developing the much-needed secondary market for municipal bonds in India, according to the Reserve Bank of India’s report on municipal finances.

Details of the report:

The revenue generation capacity of municipal corporations is declining over time, dependence on the devolution of taxes and grants from the upper tiers has risen.
The availability and quality of essential services for the urban population in India have consequently remained poor.
The rapid rise in urban population density, calls for better urban infrastructure, and greater flow of financial resources to local governments.
Over-reliance on property tax has constrained exploiting other avenues of funding by MCs, such as trade licences, entertainment taxes, taxes from mobile towers, solid waste user charges, water charges, and value capture financing.
Property tax reform and development of a vibrant municipal bond market can provide a boost to the municipal finances.
- It (urban local bodies) needs to improve collection efficiencies in respect of property tax, user charges, lease rentals, advertisement tax and parking fees
ULBs in India are amongst the weakest globally in terms of fiscal autonomy with elaborate State government controls on their authority to levy taxes and user charges, setting of rates, granting of exemptions, and borrowing of funds as well as on the design, quantum and timing of inter-governmental transfers.
Municipal revenues/expenditures in India have stagnated at around 1 percent of GDP for over a decade. In contrast, for 7.4 per cent of GDP in Brazil and 6 percent of GDP in South Africa.

Concept:

Municipal Bond:

A municipal bond (muni) is a debt security issued by a state, municipality or counties to finance its capital expenditures, including the construction of highways, bridges or schools.
A municipal bond can also be issued by a nonprofit organization, a private-sector corporation, or another public entity using the loan for public projects, such as constructing schools, hospitals, and highways.
Through muni bonds, a municipal corporation raises money from individuals or institutions and promises to pay a specified amount of interest and returns the principal amount on a specific maturity date.
These are mostly exempt from federal taxes and from most state and local taxes, making them especially attractive to people in high income tax brackets.
Types:
- A general obligation bond (GO) is issued by governmental entities and not backed by revenue from a specific project, such as a toll road. Some GO bonds are backed by dedicated property taxes; others are payable from general funds.
- A revenue bond secures principal and interest payments through the issuer or via sales, fuel, hotel occupancy, or other taxes. When a municipality is a conduit issuer of bonds, a third party covers interest and principal payments.
As a fixed-income security, the market price of a municipal bond fluctuates with changes in interest rates:
- When interest rates rise, bond prices decline; when interest rates decline, bond prices rise.
- In addition, a bond with a longer maturity is more susceptible to interest rate changes than a bond with a shorter maturity, causing even greater changes in the municipal bond investor’s income.
Many municipal bonds carry call provisions, allowing the issuer to redeem the bond prior to the maturity date. An issuer typically calls a bond when interest rates drop and reissues municipal bonds at a lower interest rate.
Furthermore, the majority of municipal bonds are illiquid; an investor needing immediate cash has to sell other securities instead.
History of Municipal Bonds Issuance in India:
- Municipal bonds were first issued in India in 1997.
- Between 1997 and 2010, the city corporations of Bengaluru, Ahmedabad and Nashik experimented with bond issues but barely managed to raise Rs. 1,400 crore.
- The poor investor response was due to the fact that these bonds were not tradable and lacked regulatory clarity.
- Securities and Exchange Board of India (SEBI)’s detailed guidelines for the issue and listing of municipal bonds in March 2015, clarified their regulatory status and rendered them safer for investors.
- In 2017, Pune Municipal Corporation had raised Rs. 200 crore through muni bonds at an interest of 7.59% to finance its 24×7 water supply project.

4. Freddie and Elton kill again: Why the cheetah pair is being tracked so closely

Subject: Environment

Context-

The two Cheetah brothers in Kuno National Park, Freddie and Elton, made their second successful hunt on Wednesday evening, once again killing a Cheetal (spotted deer), forest officials said.

Why is it important?

India’s cheetah reintroduction project is the first time in the world that a large carnivore has been relocated from one continent to another.
The cheetahs are exhibiting normal behaviour which shows they are adapting well and are in the best of health conditions and agility, even after the mandatory quarantine period.
The animals are tracked in the wild using a Very High Frequency (VHF) satellite collar.

Why weren’t they hunting all this while?

After the cheetahs reached India they were kept in quarantine bomas (enclosures) to prevent them from catching infections from other animals and were fed buffalo meat.
They are being released into a larger enclosure in a staggered manner, with Freddie and Elton being the first.
The next cheetah to be released in the large enclosure will be another male, Obaan.
The larger enclosures consist of nine interlinked compartments spread across a 5-sqkm area.
The separate compartments have been created so that a particular animal can easily be removed should the need arise.
The other five cheetahs are Sasha, Siyaya, Savannah, Tbilisi and Asha.
The male cheetahs are aged between 4.5 years and 5.5 years while the five female cheetahs are aged two to five years.

What next-

After adapting to the larger enclosures, they will be released into the 748-sqkm Kuno National Park.
The enclosure has a high prey base but it does not have other large predators.
Its 11.7-km peripheral fence has an electric charge to keep other animals away.
Cheetahs are known to coexist with leopards in Namibia.
In the national park, they will have to survive with 150-odd leopards.

Why Kuno was chosen for the cheetahs-

The last of these animals were killed in 1947.
Cheetahs were declared extinct in India in 1952.
Six sites, which had been assessed in 2010 for the translocation of the Asiatic Lion, were re-assessed in 2020.
Mukundara Hills Tiger Reserve and Shergarh Wildlife Sanctuary, both in Rajasthan, and Gandhi Sagar Wildlife Sanctuary, Kuno National Park, Madhav National Park and Nauradehi Wildlife Sanctuary in Madhya Pradesh.
Kuno was found ready to receive the cheetah immediately as it had been prepared for the Asiatic Lion.
Both animals share the same habitat – semi-arid grasslands and forests that stretch across Gujarat, Rajasthan and Madhya Pradesh.

Will any other site in India get the cheetahs?

Madhya Pradesh forest officials are making efforts to accommodate more in the Nauradehi forest sanctuary in Sagar and Gandhi Sagar Sanctuary in Mandsaur.

5. Jharkhand forms a task force to study the impact of climate commitments

Subject: Environment

Context-

The Jharkhand government has formed a task force to study the impact on the state of commitments made by India at last year’s global climate summit.

More on news-

At the COP26 summit in Glasgow last year, India committed to achieving net-zero carbon emissions by 2070 and set a target of building the capacity to generate 500 GW of non-fossil fuel energy.

About the task force-

The task force, comprising officials from 13 different departments, has been formed to assess the magnitude and nature of the effects of the “accelerated phase-out of coal mines and coal-based industries” on Jharkhand’s economy as well as on the communities that are directly or indirectly dependent on these industries.
The task force is expected to deliver an interim report within 12 months.
The state is endowed with rich coal resources, and a large number of coal-based industries are located in the state.
So it is necessary to study the impact of such commitments on the state and its people and to prepare for a transition towards a green and sustainable model of development.

India’s commitment at the Glasgow summit-

India presented the following five nectar elements (Panchamrit) of India’s climate action-

Reach 500GWNon-fossil energy capacity by 2030.
50 per cent of its energy requirements from renewable energy by 2030.
Reduction of total projected carbon emissions by one billion tonnes from now to 2030.
Reduction of the carbon intensity of the economy by 45 per cent by 2030, over 2005 levels.
Achieving the target of net zero emissions by 2070.

6. Groundwater extraction this year down 6 billion cubic metres from 2020

Subject: Geography

Context-

Annual groundwater extraction for irrigation, domestic and industrial uses has come down by about 6 billion cubic metres (bcm) to 239 bcm in 2022 from 2020, shows the latest groundwater assessment report released by the Ministry of Jal Shakti.

About the Report-

Report title- National Compilation on Dynamic Ground Water Resources Of India, 2022.
Released by Ministry of Jal shakti
Data collected by Central Groundwater Board (CGWB).

What the report says-

The total annual groundwater recharge for the entire country as of 2022 has increased by 1.29 bcm as compared to the last assessment (2020).
The total annual extractable GW resources have also increased by 0.56 bcm.
The annual groundwater extraction for irrigation, domestic and Industrial uses has also decreased by 5.76 bcm during this period.
About 87% of total annual groundwater extraction i.e. 208.49 bcm is for irrigation use.
Only 30.69 bcm is for domestic and industrial use, which is about 13% of the total extraction.
The annual groundwater extraction has seen a decline since 2017 when it came down 249 bcm from a record high of 253 bcm in 2013.
Before 2013, the figure for annual groundwater extraction had seen an upward trend: 231 bcm in 2004, 243 bcm in 2009 and 245 in 2013.
No specific reasons have been given in the report for a sharp decline in the extraction of groundwater for irrigation, domestic and industrial uses during 2022.
The report says these variations are attributed mainly to the refinement of parameters, refinement in well census data and changing groundwater regime.
The annual groundwater recharge was assessed at around 438 bcm in 2022 — up from 436 bcm in 2020 and 432 in 2017.
But this was lower than the 447 bcm annual groundwater recharge assessed in 2013.

Impact of covid-19-

The report says the monitoring of the groundwater resources was affected by the Covid-19 outbreak in the country.
In the years 2020 and 2021, due to the outbreak of Covid-19 throughout the country, the field activities of CGWB including monitoring of water levels have been severely affected.
The water levels could not be monitored for consecutively two pre-monsoon (April/May) seasons in the years 2020 and 2021.
Water levels could not be monitored in some states during November 2020 for the same reason.

Groundwater scenario in India-

India has 16% of the world’s population, but only 4% of its freshwater resources.
Given the existing consumption patterns, including rampant groundwater extraction, estimates suggest that by 2030, India will only have half of the water it needs.
India is by far the largest user of groundwater in the world, accounting for 25% of the global water withdrawals; ~ 45% of the water supply in India’s cities is sourced from groundwater.
The Central Ground Water Board (CGWB) estimates that about 17% of the groundwater blocks across the country are overexploited, where the rate of extraction is more than that of renewal.
According to the CGWB, with 230 BCM (billion cubic metres) of groundwater drawn out each year for irrigating agricultural lands in India, many parts of the country are experiencing rapid depletion of groundwater.
The total estimated groundwater depletion in India is about 122–199 BCM.
The agriculture sector uses 89% of the groundwater for irrigation while 11% is used by the domestic and industrial sectors.
At the State level, in Punjab, Haryana, Rajasthan and Delhi groundwater extraction is more than 100%.

Groundwater resource and Use in India- Fast Facts:

Total usable water resources- 1,123 BCM/year; out of which the share of surface water is 690 BCM/year and that of groundwater is 433 BCM/year
After keeping aside 35 BCM/year for natural discharge, the net annual ground water availability for India is 398 BCM.
Natural discharge occurs as seepage to water bodies or oceans in coastal areas and as transpiration by plants whose roots extend up to the water table.

7. What is the Mangrove Alliance for Climate, which India joined at COP27?

Subject: Environment

Context-

At the 27th Session of Conference of Parties (COP27), this year’s UN climate summit, the Mangrove Alliance for Climate (MAC) was launched with India as a partner.
The move, in line with India’s goal to increase its carbon sink, will see New Delhi collaborating with Sri Lanka, Indonesia and other countries to preserve and restore the mangrove forests in the region.

The MAC-

An initiative led by the United Arab Emirates (UAE) and Indonesia, the Mangrove Alliance for Climate (MAC) includes India, Sri Lanka, Australia, Japan, and Spain.
It aims to educate and spread awareness worldwide on the role of mangroves in curbing global warming and its potential as a solution for climate change.
The intergovernmental alliance works on a voluntary basis which means that there are no real checks and balances to hold members accountable.
The members will also share expertise and support each other in researching, managing and protecting coastal areas.

The current state of the mangroves

Geographical Location:

Mangroves are found only along sheltered coastlines within tropical or subtropical latitudes because they cannot withstand freezing temperatures.
They share the unique capability of growing within reach of the tides in salty soil.

Area Covered

Global Mangrove Cover:
- The total mangrove cover in the world is 1,50,000 sq kms.
- Asia has the largest number of mangroves worldwide.
- South Asia comprises 8% of the world’s mangrove cover.
- India’s contribution is8% total mangrove cover in South Asia.

Mangroves in India:

Coverage:
- According to the India State of Forest Report, 2019, the mangrove cover in India is 4,975 sq km, which is 15% of the country’s total geographical area.
- West Bengal has45% of India’s mangrove cover, followed by Gujarat at 23.66% and A&N Islands at 12.39%.

Largest Mangrove Forest:

Sundarbans in West Bengal is the largest mangrove forest regions in the world. It is listed as a UNESCO World Heritage Site.
- The forest is home to the Royal Bengal tiger, Gangetic dolphins and Estuarine crocodiles.
Bhitarkanika Mangroves: The second largest mangrove forest in India is Bhitarkanika in Odisha created by the two river deltas of River Brahmani and Baitarani.
- It is one of the most significant Ramsar wetlands in India.
Godavari-Krishna Mangroves, Andhra Pradesh: The Godavari-Krishna mangroves extend from Odisha to Tamil Nadu.
- The deltas of the Ganges, Mahanadi, Krishna, Godavari, and Cauvery rivers contain mangrove forests.
- The backwaters in Kerala have a high density of mangrove forests.
- Pichavaram in Tamil Nadu has a vast expanse of water covered with mangrove forests. It is home to many aquatic bird species.

Significance of Mangroves-

Ecologically mangroves are important in maintaining and building the soil, as a reservoir in the tertiary assimilation of waste.
They provide protection against cyclones.
Promotes land accretion, fixation of mud banks, dissipation of winds, tidal and wave energy.
The dense tangle of roots allows the trees to handle the daily rise and fall of tides.
Mangrove forests stabilize the coastline, reducing erosion from storm surges, currents, waves, and tides.
Mangroves improve water quality by absorbing nutrients from runoff that might otherwise cause harmful algal blooms offshore.
Both coral reefs and seagrass beds rely on the water-purifying ability of mangrove forests to keep the water clear and healthy.
Mangroves make up less than 2% of marine environments but account for 10-15% of carbon burial.
Once the leaves and older trees die they fall to the seafloor and take the stored carbon with them to be buried in the soil.
This buried carbon is known as “blue carbon” because it is stored underwater in coastal ecosystems like mangrove forests, seagrass beds and salt marshes.
Supports an incredible diversity of creatures including some species unique to mangrove forests.
They provide habitat and refuge to a wide array of wildlife such as birds, fish, invertebrates, mammals and plants.

Threats Faced by Mangroves

Commercialisation of Coastal Areas: Aquaculture, coastal development, rice and palm oil farming and industrial activities are rapidly replacing these salt-tolerant trees and the ecosystems they support.
- Mangrove coverage has shrunk by half in the last 40 years. Less than 1% of tropical forests are mangroves.
Shrimp Farms: The emergence of shrimp farms has caused at least 35% of the overall loss of mangrove forests.
Temperature-Related Issues: A fluctuation of ten degrees in a short period of time is enough stress to damage the plant and freezing temperatures for even a few hours can kill some mangrove species.
Soil-Related Issues: The soil where mangroves are rooted poses a challenge for plants as it is severely lacking in oxygen.
Excessive Human Intervention: During past changes in sea level, mangroves were able to move further inland, but in many places, human development is now a barrier that limits how far a mangrove forest can migrate.
- Mangroves also frequently suffer from oil spills.

Conservation of Mangroves

UNESCO Designated Sites: The inclusion of mangroves in Biosphere Reserves, World Heritage sites and UNESCO Global Geoparks contributes to improving the knowledge, management and conservation of mangrove ecosystems throughout the world.
International Society for Mangrove Ecosystem (ISME): The ISME is a non-governmental organization established in 1990 to promote the study of mangroves with the purpose of enhancing their conservation, rational management and sustainable utilization.
Blue Carbon Initiative: The International Blue Carbon Initiative is focused on mitigating climate change through the conservation and restoration of coastal and marine ecosystems.
- It is coordinated by Conservation International (CI), IUCN, and the Intergovernmental Oceanographic Commission-UNESCO (IOC-UNESCO).
International Day for the Conservation of the Mangrove Ecosystem: UNESCO celebrates this day on July 26 with the aim of raising awareness about mangrove ecosystems and promoting their sustainable management and conservation.
Mangroves for the Future Initiative: IUCN and UNDP developed a unique initiative to promote investment in coastal ecosystem conservation called the “Mangroves for the Future (MFF)”.
- The member nations include Bangladesh, Cambodia, India, Indonesia, Maldives, Myanmar, Pakistan, Seychelles, Sri Lanka, Thailand, and Vietnam.
National Mangrove Committee: The Government of India set up a National Mangrove Committee in 1976 which advises the government about the conservation and development of mangroves.

8. What the latest UN science says about climate change

Subject: Environment

Context-

At the COP27 conference in Egypt, delegates have at their disposal decades of research into warming trajectories published by the UN climate science agency to inform their decisions. The Intergovernmental Panel on Climate Change (IPCC) produces reports roughly every five years that represent a global scientific consensus on climate change, its causes and its impact.

The Report-

Last year’s report tackled the main drivers of global warming and the core elements of climate science.
That was followed by two major reports this year – one in February addressing how the world will need to adapt to climate impacts, from rising seas to dwindling wildlife, and another in April on ways to mitigate climate-warming emissions.

Here are some key takeaways-

Humans unequivocally to blame

Previously rare weather extremes are becoming more common, and some regions are more vulnerable than others.
For the first time, there is a call for urgent action to curb methane. Until now, the IPCC had focused on carbon dioxide, the most abundant greenhouse gas.
The report supports the idea of looking into the benefits and drawbacks of geoengineering, or large-scale interventions, such as injecting particles into the atmosphere to block out solar radiation.
The world’s nations, including the wealthiest, needed to start preparing for climate impacts and adapting to a warmer world.

Urgent need to adapt to heatwaves, storms, sea level change

With climate change already causing extreme weather worldwide, the report urged rich and poor countries alike to adapt now to impacts including more frequent heatwaves, stronger storms and higher sea levels.
The report made clear that different regions face different risks, and offered localised projections for what to expect.
Millions of people face poverty and food insecurity in the coming years, as climate change hits crops and water supplies and threatens to disrupt trade and labour markets.
The daunting forecast for the world’s poor reignited calls for a “Loss and Damage” fund through which rich nations would compensate for costs incurred by poor countries from climate-related disasters.

‘Now or never’, individual action matters

The report explored how various emissions scenarios would translate into future temperature rises.
Cities are a big part of the emissions problem but also a source of hope and positive solutions.
The energy transition to renewable sources and clean-burning fuels is moving too slowly.
The report went beyond focusing on fossil fuels and manufacturing to urge strong climate action in agriculture, where farming methods and better forest protection could curb emissions.
It warned that climate change threatens economic growth, and for the first time highlighted the need for action at the individual level, calling on governments to agree on policies to change consumer and transportation habits to encourage less waste.

9. COP27: Dash for natural gas on a scale that threatens 1.5°C goals, says report

Subject: Environment

Context-

The report, titled Massive gas expansion risks overtaking positive climate policies, was released at the 27th Conference of Parties (COP) to the United Nations Framework Convention on Climate Change in Sharm El-Sheikh, Egypt.

Report analysis-

Liquefied Natural Gas (LNG) production projects, including those under construction, proposed or approved between 2021 and 2050, could increase emissions by over 1.9 Gigatonnes of carbon dioxide-equivalent (CO2) per year in 2030.
This estimate is above emission levels estimated by the International Energy Agency (IEA)’s Net Zero by 2050 scenario, the report released by Climate Action Tracker (CAT) stated.
The total global gas use by 2030 must be at least 30 per cent below 2021 levels, according to the 2022 update of the IEA’s Net Zero by 2050: A Roadmap for the Global Energy Sector.
Under current proposals, global LNG consumption could more than double by 2030, reaching 800 million tonnes of LNG per year.
The findings also showed that cumulative emissions from LNG are estimated to be over 40 Gigatonnes of carbon dioxide-equivalent (CO2) higher between 2020 and 2050.
This could consume 10 per cent of the remaining global carbon budget for 1.5˚C warming by 2050.
The world has a remaining budget of about 420 gigatonnes of CO2 for a two-thirds chance of limiting warming to 1.5°C, according to the Intergovernmental Panel on Climate Change (IPCC).
- The remaining carbon budget is the remaining CO2 emissions that can still be emitted while keeping the global average temperature increase due to human activities to a specific limit, which is 5°C.
The Russia-Ukraine war has caused the energy crisis.
- This has taken over the climate crisis.
- The gas industry has taken advantage of that. There is a massive push for gas everywhere.

African gas reserves-

Europe, Africa, the United States, Australia, Canada and the Middle East are expected to expand exports.
- Europe is expected to see significant increases in imports, while India, southeast Asia, and east Asia have plans to expand import capacity.
There is a renewed interest in Africa’s fossil energy reserves given the energy crisis.
It now has 905 proposed fossil gas plants.
- Nigeria, Egypt, Senegal and Mozambique are pushing to accelerate fossil gas production.
The African Development Bank will be co-financing an LNG plant in Mozambique.
Fossil gas projects are attractive to many African nations facing a debt crisis.

What is Natural Gas?

Natural gas is a fossil energy source that formed deep beneath the earth’s surface. Natural gas contains different compounds. The largest component of natural gas is methane, a compound with one carbon atom and four hydrogen atoms (CH4).

What is Liquified Natural Gas (LNG)?

Liquefied natural gas (LNG) is natural gas that has been cooled to a liquid state, at about -260° Fahrenheit, for shipping and storage.
The volume of natural gas in its liquid state is about 600 times smaller than its volume in its gaseous state.
This process makes it possible to transport natural gas to places where pipelines do not reach.

Importance of Gas:

Energy efficient: Natural gas produces more energy than any of the fossil fuels in terms of calorific value.
Cleaner fuel: Natural gas is a superior fuel as compared with coal and other liquid fuels; being an environment-friendly, safer and cheaper fuel.
Emission commitments: India made a commitment to COP-21 Paris Convention in December 2015 that by 2030, it would reduce carbon emission by 33%-35% of 2005 levels.
Diverse applications: Natural gas can be used as domestic kitchen fuel, fuel for the transport sector as well as a fuel for fertilizer industries and commercial units.

10. COP27: African countries launch ‘game-changing’ carbon credits initiative

Subject: Environment

African Carbon Markets Initiative (ACMI)-

A new initiative putting carbon credits up for sale in African countries was launched during the 27th Conference of Parties (COP27) to the United Nations Framework Convention on Climate Change in Sharm El-Sheikh, Egypt.
African Carbon Markets Initiative (ACMI) aims to rally the world towards more ambitious climate action, expand the continent’s participation in voluntary carbon markets and create jobs while protecting biodiversity.
Carbon markets can unlock billions in climate finance needed to support the economies of African countries.
The leaders announced their ambitions to grow the African voluntary carbon markets at the launch by producing 300 million carbon credits every year by 2030 and 1.5 billion credits annually by 2050.
This can unlock $6 billion (Rs 49,041 crore) in income and support over 30 million jobs.
Major carbon credit buyers and financiers, like Exchange Trading Group and Standard Chartered, have announced ambitious plans to set up an advance market commitment (AMC) for high-integrity African carbon credits.
Nigeria is committed to carbon credits because the sector will soon become a major industry and benefit citizens.

Concerns in the ACMI-

Concerns and doubts about real frontline victims like ordinary African farmers benefiting from the initiative.
ACMI needs political goodwill and the support of technical experts to adopt international best practices from the leading European carbon market.
ACMI needs to collaborate with other regional carbon market platforms and global integrity initiatives like the Voluntary Carbon Markets Integrity Initiative.
Calls for regulation of voluntary markets, which are often unchecked.
Stringent policies are needed to check on social safeguards to avoid human rights abuses and ‘greenwashing’ loopholes that some corporations exploit to masquerade as eco-friendly without reducing requisite emissions.

What is carbon credit-

A carbon credit is a special permit that gives the user or buyer express rights to emit a given amount of carbon dioxide or other greenhouse gases.
Carbon credits trading is one of the many technical interventions used to reduce the amount or concentration of greenhouse gases in the atmosphere.
Carbon credits are based on the “cap-and-trade” model that was used to reduce sulfur pollution in the 1990s.
One carbon credit is equal to one metric ton of carbon dioxide, or in some markets, carbon dioxide equivalent gases (CO2-eq).
Negotiators at the Glasgow COP26 climate change summit in November 2021 agreed to create a global carbon credit offset trading market.
The Kyoto Protocol provides for three mechanisms that enable countries, or operators in developed countries, to acquire greenhouse gas reduction credits:

Under Joint Implementation (JI), a developed country with relatively high costs of domestic greenhouse reduction would set up a project in another developed country.
Under the Clean Development Mechanism (CDM), a developed country can “sponsor” a greenhouse gas reduction project in a developing country where the cost of greenhouse gas reduction project activities is usually much lower, but the atmospheric effect is globally equivalent. The developed country would be given credits for meeting its emission reduction targets, while the developing country would receive capital investment and clean technology or beneficial change in land use.
Under International Emissions Trading (IET), countries can trade in the international carbon credit market to cover their shortfall in Assigned Amount Units (AAUs). Countries with surplus units can sell them to countries that are exceeding their emission targets under Annex B of the Kyoto Protocol.

Carbon Markets:

A carbon market turns emission reductions and removals into tradeable assets, thus creating incentives to reduce emissions or improve energy efficiency. The carbon markets can be compliance and voluntary.
Carbon trading started formally in 1997 under the United Nations’ Kyoto Protocol on climate change which had more than 150 nation signatories.
Parties with commitments under the agreement agreed to limit or reduce their greenhouse gas emissions between 2008 – 2012 to 5.4% which was well below the levels of 1990.
Emissions trading, as set out in the Kyoto Protocol, allowed countries to sell the excess capacity of emission units to countries that had levels well over their targets.
Several countries like Kenya, Malawi, Gabon, Nigeria and Togo announced their commitment to scaling voluntary carbon markets at COP27.

11. COP27: The forgotten sustainable development goals

Subject: Environment

Context-

At Sharm El-Sheikh, while the spotlight is firmly on the 27th Conference of Parties (COP27) to the United Nations Framework Convention on Climate Change, a pavilion hosted by the United Nations is getting considerable attention for spotlighting the UN Sustainable Development Goals (SDGs).

About the SDGs-

Sustainable development is defined as the development which meets the needs of the present without compromising the ability of future generations to meet their own needs.
- This most widely accepted definition of Sustainable Development was given by the Brundtland Commission in its report Our Common Future (1987).
The 17 SDGs (169 targets & 304 indicators) are comprehensive, spanning four broad areas — human rights, labour, environment and anti-corruption.
It replaces the Millennium Development Goals as the post-2015 development agenda.
The Rio+20 summit (2012) in Rio de Janeiro produced the SDGs, which are non-binding documents.

Assessment of these Goals-

Over the last nine years, nearly 15,000 companies worldwide have begun regularly reporting their progress toward the SDGs through participation in the United Nations Global Compact (UNGC), a network of 71 national secretariats and a central international directorate.
In the recent study of SDG reporting practices among Swedish companies and small-medium enterprises (SMEs), it is found that SDGs on gender equality, responsible production and consumption, climate action and economic growth were regularly reported on.
Organisations rarely report on goals that deal with hunger and poverty eradication as well as life below water.

Why do some SDGs attract substantially less attention and resources from companies?

Reporting on a few SDGs is inconvenient or it may result in bad public relations.
Reporting depends on how companies assess the relevance of an SDG for their business strategy or the SDG’s relevance in relation to its importance to their stakeholders.
This shows how companies disclose comprehensive information about the impact of their work.
The institutional priorities of the UN itself.
The HeForShe campaign, the leading campaign for UN Women, was launched the same year as the SDGs- 2015.
The HeForShe campaign material actively mentioned SDG 5 (gender equality).
It’s easy to surmise that the UN’s focus on gender equity may have caused more organisations to pay attention to this particular SDG.
Another reason is cultural priorities. Organisations align annual reports with state regulations, initiatives and cultural practices.
- For example, the nation of Denmark, where extreme forms of poverty and hunger do not affect the population. So, one might expect fewer companies to report on these SDGs.
- To combat this issue, Denmark launched a national project in 2020 to determine how the SDGs could be recalibrated to comprehensively fit a Danish context, with a report called ’Make Global Goals Our Goals’.
- This report attempts to translate the 17 SDGs into 197 Danish indicators. As a result, SDG 1, which focuses on ending extreme poverty, has been translated into a series of indicators meant to target ending poverty to relative poverty and building systems for poverty prevention and resilience, so one can now expect to see more reporting on the subject in Denmark.

Ensuring more comprehensive reporting on SDGs–

Reporting on the SDGs will continue to be uneven.
The UNGC, governments and NGOs can ensure that these goals are more comprehensively reported on.
- Companies should explain data collection, data sources and limitations of their research. They should explain who their core stakeholders are and how their priorities and needs were collected and interpreted.
Organisations should be expected to report on every SDG.

If an SDG does not apply to that organisation, they should explain the reasons in their reports.

12. Pashmina wool

Context :

News: Obsolete testing technique leading to ‘false positive’ for presence of banned Shahtoosh guard hair, say traders

Wildlife Institute of India, Dehradun, which employs Light Microscopy technique looks for the presence of Shahtoosh. Other modern techniques include ‘Scanning Electron Miscrospcopic’ technique and DNA tests, However only Light Microscopy technique is used by WII.

CITES (Convention on International Trade in Endangered Species of Wild Fauna & Flora) included the Tibetan Antelope in 1979 leading to prohibition in sale and trade of Shahtoosh shawls and scarves.

BIS for Pashmina

India contributes only about 1% of the world’s Pashmina, but the Pashmina produced in India is considered the best of the lot and occupies a unique position.
In 2019, the Bureau of Indian Standards (BIS) published an Indian Standard for identification, marking and labelling of Pashmina products to certify their purity.
In 2021, the BIS released a revised report titled ‘Identification, Labelling and Marking of Pashmina Products’ that mandated directions for incorporating qualitative and quantitative identification of Shahtoosh guard hair.

Pashmina shawls

Pashmina is obtained from breeds of mountain goats ( capra hircus) found in the Changthang Plateau in Tibet and parts of Ladakh, in the Himalayan region of India.

The word pashm means “wool” in Persian, but in Kashmir, pashm referred to the raw unspun wool of domesticated Changthangi goats. In common parlance today, pashmina may refer either to the material or to the variant of the Kashmir shawl that is made from it.

Shahtoosh, on the other hand, is the fine undercoat fibre obtained from the Tibetan Antelope, known locally as ‘Chiru’, a species living mainly in the northern parts of the Changthang Plateau in Tibet. As they offer high levels of smoothness and warmth, Shahtoosh shawls became a highly expensive commodity.

About Kashmiri Shawls:

Shawls are produced by two techniques, loom woven or kani shawls and the needle embroidered or sozni shawls.
The basic fabric is of the three types – Shah Tush, Pashmina and Raffal.
Shah Tush (King of wool) passes through a ring and is also known as Ring shawl. It comes from a rare Tibetan antelope living at a height of over 14000 ft in the wilds of the Himalayas.
Pashmina is known world over as cashmere wool, it comes from a special goat (Capra hircus) living at an altitude of 12000 to 14000 ft.
Raffal is spun out of merino wool tops and is a popular type of shawl.

Chiru (Tibetan Antelope)

It lives at a 3,250-5,500-metre elevation in high altitude plains and montane valleys comprising of alpine and desert steppe and pasture, distinguished by low vegetation cover and productivity.
This antelope is considered to be close to goat family.
Predators such as wolf, lynx, snow leopard, and red fox are predators of chirus and their young calves.

Protection Status:

‘Near Threatened’ in IUCN Red List.
It has been enlisted in Schedule I of Wildlife Protection Act, 1972.
To enhance its protection, its prime habitats have been declared as Wildlife Sanctuaries Karakorma Wildlife Sanctuary and Changthang Cold Desert Wildlife Sanctuary.

What is CITES?

CITES (the Convention on International Trade in Endangered Species of Wild Fauna and Flora) is an international agreement between governments. Its aim is to ensure that international trade in specimens of wild animals and plants does not threaten the survival of the species.

CITES was conceptualised in 1963 at a meeting of the (IUCN) International Union For Conservation Of Nature.
It came into force in 1975 and consists of 183 member-countries till date that abide by CITES regulations by implementing legislation within their own borders to enforce those regulations.
Located in Geneva, Switzerland, the CITES is administered by the United Nations under its UNEP (United Nations Environment Programme) Wing.
The Convention of Parties to CITES is the supreme decision-making body of the Convention and comprises all its Parties.

Wildlife Crime Control Bureau (WCCB)

Considering the seriousness of organised Wildlife Crime and illegal trade of wildlife parts and products, the Wildlife Crime Control Bureau was created in 2007 under the provisions of the Wildlife Protection Act 1972.
Wildlife Crime Control Bureau is designated nodal agency for CITES related enforcement.
WCCB is a statutory multi-disciplinary body under the MoEF&CC.
The Bureau has its five regional offices at Delhi (headquarters), Kolkata, Mumbai, Chennai and Jabalpur; and
five border units at Ramanathapuram, Gorakhpur, Motihari, Nathula and Moreh.
Under the Wild Life (Protection) Act, 1972, WCCB is mandated to collect and collate intelligence related to organized wildlife crime;
disseminate the same to State and other enforcement agencies so as to apprehend the criminals;
to establish a centralized wildlife crime data bank;
co-ordinate actions by various agencies in connection with the enforcement of the provisions of the Act;
assist international organizations & foreign authorities to facilitate wildlife crime control;
capacity building of the wildlife crime enforcement agencies;
assist State Governments to ensure success in prosecutions related to wildlife crimes; and
advise the Government of India on issues relating to wildlife crimes.

It also assists and advises the Customs authorities in inspection of the consignments of flora & fauna as per the provisions of Wild Life Protection Act, CITES and EXIM Policy governing such an item.

13. Aadhaar update

Subject: Polity

Context: Aadhaar update

About Aadhaar

Aadhaar is a 12-digit unique identity number that can be obtained voluntarily by the citizens of India and resident foreign nationals who have spent over 182 days in twelve months immediately preceding the date of application for enrolment, based on their biometric and demographic data.

The data is collected by the Unique Identification Authority of India (UIDAI), a statutory authority established in January 2009 by the Government of India, under the jurisdiction of the Ministry of Electronics and Information Technology, following the provisions of the Aadhaar (Targeted Delivery of Financial and other Subsidies, benefits and services) Act, 2016.

Aadhaar is the world’s largest biometric ID system. World Bank Chief Economist Paul Romer described Aadhaar as “the most sophisticated ID programme in the world“. Considered a proof of residence and not a proof of citizenship, Aadhaar does not itself grant any rights to domicile in India. In June 2017, the Home Ministry clarified that Aadhaar is not a valid identification document for Indians travelling to Nepal and Bhutan.

The Centre on amended Aadhaar regulations

Aadhaar number holders may, on completion of every 10 years from the date of enrolment for Aadhaar, update their supporting documents in Aadhaar, at least once, by submitting proof of identity and proof of address documents
Updating is voluntary and not mandatory.

14. ASEAN-India and East-Asia summits

Context:

Vice President Jagdeep Dhankhar will represent India at the 19th ASEAN-India and the 17th East Asia summits.

What is Association of Southeast Asian Nations (ASEAN):

It is a regional grouping that promotes economic, political, and security cooperation.
It was established in August 1967 in Bangkok, Thailand with the signing of the Bangkok Declaration by the founding fathers of ASEAN, namely Indonesia, Malaysia, Philippines, Singapore and Thailand.
ASEAN comprises ten Southeast Asian states Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
Its chairmanship rotates annually, based on the alphabetical order of the English names of Member States.
ASEAN countries have a total population of 650 million people and a combined Gross Domestic Product of USD 2.8 trillion.
ASEAN is India’s 4th largest trading partner with about USD 86.9 billion in trade.
The 19th ASEAN-India summit will be held in the Cambodian capital of Phnom Penh.
2022 is being celebrated as a “Friendship Year” to mark the 30 years of relationship.

What is East-Asia Summit:

The concept of East Asia Grouping was first promoted in 1991 by the then Malaysian Prime Minister, Mahathir bin Mohamad.
Established in 2005, it is the Indo-Pacific’s premier forum for strategic dialogue.
Apart from the 10 Association of Southeast Asian Nations member states, the East Asia Summit includes India, China, Japan, the Republic of Korea, Australia, New Zealand, the United States and Russia.
ASEAN leads the forum, and the chair position rotates between the ASEAN Member States annually.
India is one of the founding members of the East Asia Summit.
The 17th East Asia summit will be held in the Cambodian capital of Phnom Penh.
There are six priority areas of regional cooperation within the framework of the East Asia Summit. These are:
- Environment and Energy.
- Education
- Finance
- Global Health Issues and Pandemic Diseases.
- Natural Disaster Management.
- ASEAN Connectivity.

15. Pil to grant Ram setu the national heritage tag

Subject: Environment

Context:

Rajya Sabha MP Subramanian Swamy, had filed the petition, to grant Ram setu the national heritage tag in response against the Centre’s Sethusamudram Canal project, initiated when the UPA-1 was in power at the Centre.

What is Sethusamudram Canal project:

The project envisaged creation of a 83-km-long deep water channel, linking Mannar with Palk Strait, by dredging and removing the limestone shoals that formed part of the Ram Setu.
It would have reduced travel time between the eastern and western coasts of India as ships would no longer have to circle Sri Lanka to travel between the Bay of Bengal and Arabian Sea.
The SC had stayed the work for the project in 2007.

What is Ram Setu:

It is also known as Adam’s Bridge.
It is a 48-km chain of limestone shoals between Rameswaram on India’s southeast coast and Mannar Island near Sri Lanka’s northwest coast.
The structure has significance in both Hindu and Muslim mythology
- Hindus believe this is the bridge which was built by Lord Ram and his army to cross to Lanka and fight Ravan.
- As per Islamic legend, Adam used this bridge to reach Adam’s Peak in Sri Lanka, where he stood on one foot for 1,000 years in repentance.
Scientists believe Ram Setu is a natural structure formed due to tectonic movements and sand getting trapped in corals.