Daily Prelims Notes 16 June 2022
- June 16, 2022
- Posted by: admin1
- Category: DPN
Daily Prelims Notes
16 June 2022
Context: Wetlands help stabilise CO2, GHG concentrations.
Wetlands and Climate change
- Conservation and wise use of wide diversity of inland and coastal wetlands is a powerful climate change response.
- Wetlands assist in stabilisation CO2, CH4, N2O and Green House Gas (GHG) concentrations by minimising climate and land-use mediated GHG releases and by boosting the potential to actively collect CO2 from the atmosphere and sequester carbon.
- The coastal blue carbon soaked by mangroves, salt marshes and seagrasses via photosynthesis and stored in wet anaerobic soils. Peatlands, considered to be one of the world’s largest carbon reserves.
- Wetlands can assist towards India’s emission pledges at the Glasgow summit include net-zero emissions by 2070, reducing carbon emissions by one billion tonnes and reducing the carbon intensity of the economy to less than 45 per cent.
- Several wetlands can also be a net source of GHGs, and emissions are exacerbated by anthropogenic disturbances, particularly pollution and alteration in water
- Wetlands change atlas recently published by the Space Application Center indicates declining natural coastal wetlands (reducing from 3.69 million hectare to 3.62 million hectare in last decade)
- Degradation of wetlands diminishes landscapes capability to absorb and moderate floods, droughts, and storm surges. Floods in the Kashmir Valley in 2014 and Chennai in December 2015 illustrate how wetland degradation can threaten lives.
- Excessive pollutants (Industrial effluents, domestic waste, agricultural runoff etc.) are dumped into wetlands beyond the recycling capacity.
Measures to Protect Wetlands
- Ramsar Sites in India – India has designated 49 Ramsar sites
- Wetlands International
- National Wetlands Conservation Programme (NWCP)
- Environment Ministry supports implementation of management action plans for over 250 wetlands under schemes such as National Plan for Conservation of Aquatic Ecosystems, Mangroves and Coral Reefs, and Integrated Development of Wildlife Habitats.
2. WTO talks on fisheries subsidies
Subject: International Relations
Section: International organization
- The ongoing WTO Ministerial Conference (MC12) in Geneva has been extended by a day – till June 16 – as a consensus on the key is- sues of food security, TRIPS waiver for Covid vaccines and medical tools and a ban on harmful ﬁsheries subsidies, remained elusive.
The 12th Ministerial Conference (MC12) of the World Trade Organization (WTO), at Geneva:
- MC12 has been extended due to disagreements over fisheries subsidies.
- A section of experts have claimed that the June 10 revised draft proposed to be negotiated was unfair and would have an adverse impact on fishers in India and other developing countries.
- The developing countries have wanted discipline in fisheries subsidies by protecting fisher folk, using the provisions of Special and Differential Treatment (S&DT). But the revised text is unbalanced and does not favour the interests of the fishers.
- Negotiations have been progressing according to the Sustainable Development Goal 14.6 mandate in 2017, under the three pillars of illegal, unreported and unregulated (IUU), over fished stocks and overcapacity and over fishing.
- For example, Low income, resource poor and livelihood fishing or fishing-related activities in developing and Least Developing Countries (LDCs) can be done up to 12 nautical miles for two years under the articles of the S&DT in the revised draft. but developing countries wanted exemptions up to 200 nautical miles.
- India has been opposed to the draft text on curbing ﬁsheries subsidies, arguing that it allowed rich countries to retain many of their subsidies, despite the fact that they were the ones who al- lowed their industrial ﬂeets to “exploit and plunder’’ the ocean’s wealth over the past several decades.
- India has demanded a transition period of 25 years for its ﬁshers, stating that policy space was essential for the long- term sustainable growth and prosperity of the country’s low income ﬁshers.
- In agriculture, India and other members of the G33 group of developing nations have insisted that a permanent solution for public stock holding was the top- most priority, but developed nations are not keen on delivering it at MC12.
3. Carbon sinks
Section: Climate Change
- India’s goal under the Paris Agreement is set at creating an additional 2.5–3 billion tonnes of carbon dioxide equivalent through additional forest and tree cover by 2030.
What are carbon sinks?
- Carbon sinks are places and/or products that sequester and store carbon as organic or inorganic compounds for different periods of time.
- Essentially, anything that absorbs more carbon than it emits into the atmosphere through natural or artificial processes can be considered a carbon sink.
What are natural and artificial carbon sinks?
- Natural carbon sinks can be terrestrial – soil, forests, and grasslands – or aquatic, namely, the ocean. Currently, the oceans are the largest carbon reservoirs in the world.
- Artificial carbon sinks have been proposed to combat the rising levels of carbon in the atmosphere. One such idea is to convert rapidly growing urban areas into carbon sinks by using engineered timber instead of cement, steel, and other such materials.
How do oceans act as carbon sinks?
- The ocean, which is by far the largest carbon reservoir and sink, stores carbon in several different forms.
- The most abundant form is dissolved inorganic carbon (DIC). This entered the seas over millennia through sea water interacting with sediments, land weathering, out gassing from the Earth’s interior (for example, through volcanic vents), and gas exchange with the atmosphere.
- The CO2 usually dissolves in seawater, where it exists as CO2, bicarbonate ions (HCO3–), and carbonate ions (CO3–).
- The intermediate and deep ocean is estimated to be the largest of the five carbon reservoirs in the ocean, the other four being the surface ocean, marine biota, dissolved organic carbon (DOC) and sea surface sediments.
- Oceans also act as carbon sinks due to the actions of biological carbon pumps, which occur mainly in the surface layers of the ocean. Phytoplankton convert CO2 from the air and dissolved CO2 in seawater into biomass through photosynthesis.
How do terrestrial systems act as carbon sinks?
- Terrestrial systems – vegetation, soil, permafrost, and fossil fuel reserves – are important carbon reservoirs, though their carbon stocks are an order of magnitude lower than those of the oceans.
- Plant life fixes CO2 from the atmosphere through photosynthesis and traps carbon in organic molecules that are then stored in these reservoirs.
- In addition to forests, grasslands and peatlands are also considered important terrestrial carbon sinks.
How does India plan to use carbon sinks to offset carbon emissions?
- India’s NDC (nationally determined contributions) goal under the Paris Agreement is set at creating an additional 2.5–3 billion tonnes of CO2e through additional forest and tree cover by 2030.
- According to a 2021 report from TERI (The Energy Research Institute), this will be possible only if India doubles its forest cover by 2030.
- The report highlights the importance of exploring blue carbon initiatives (carbon storage potential in coastal and marine ecosystems), integrated approaches to sustainable forest management, and the agro forestry industry to achieve the NDC goals.
4. Tighter financial conditions may slow down GDP growth
Section: National Income
- Tight, or contractionary monetary policy is a course of action undertaken by a central bank such as the Federal Reserve to slow down overheated economic growth.
- Also to constrict spending in an economy that is seen to be accelerating too quickly, or to curb inflation when it is rising too fast.
- The central bank tightens policy or makes money tight by raising short-term interest rates through policy changes to the discount rate and federal funds rate.
- Boosting interest rates increases the cost of borrowing and effectively reduces its attractiveness.
- Tight monetary policy can also be implemented via selling assets on the central bank’s balance sheet to the market through open market operations (OMO).
Reasons for such policy this time
- Slumping stocks and surging bond yields are rapidly crimping global financial conditions, yet given their effect on dampening economic growth and eventually inflation, the moves might be welcomed by the Federal Reserve and other central banks.
- The recent sell-off in global markets — driven by signs of faster-than-anticipated interest rate rises in the US and Europe — is contributing to a sharp contraction in financial conditions.
- But while the FCI tightening appears alarming, it may not be for central banks, which face inflation at multi-decade highs.
- Goldman’s rule of thumb is that a persistent 100 bps FCI tightening slows GDP by about one percentage point after a year, in turn slowing inflation by roughly 0.1 percent-age point.
5. GoM to meet to discuss GST rate rationalization, exemptions, Inverted duty structure
Section: Fiscal Policy
- The reasons are inflation concerns and economic uncertainty due to the geopolitical situation.
- Earlier the GoM discussed raising rates on some goods and services to ensure that the revenue neutral rate (RNR) reaches the level it was at the introduction of GST.
Terms of reference
- Terms of reference for the GoM is to “review the current rate structure, including special rates, and recommend rationalization measures”.
- It will also review the current tax slab and recommend changes as may be required.
Present GST Rates
- As on date, there are four main rates under the GST: 5, 12, 18 and 28 per cent.
- Then there are special rates of 0, 0.25, 1 and 3 per cent.
- There is also provision of a cess at the rate between 1 and 25 per cent.
- For services, there are four rates: 5, 12, 18 and 28 per cent, besides a special rate of 0 per cent.
- There have been demands for restructuring the slabs by merging either 12 and 18 or 5 and 12 per cent.
6. Decks cleared for 5G spectrum auctions
- The auctions will kick start on July 26 and a total of 72,097.85 MHz of spectrum with a validity period of 20 years will be put on auction.
- Spectrum in various frequency bands — low (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz), mid (3,300 MHz), and high (26 GHz) — will be up for sale.
TRAI plan for auction
- Telecom Regulatory Authority of India (TRAI), had set a 39 per cent cut in the reserve, or floor, price for the 5G spectrum sale for mobile services.
- Accordingly, the sale value, per the base reserve price, is around Rs 5-lakh crore.
- Telcos had asked for a 90 per cent cut in the reserve price of airwaves from the 2018 levels.
- TRAI on April 11 had recommended a base price of Rs 317 crore a unit for the premium 3.3-3.67 GHz band, Rs 3,297 crore a MHz for the 700 MHz spectrum.
- It is expected that the mid and high band spectrum will be utilized by telecom service providers (TSPs) to roll out 5G technology-based services capable of providing speed and capacities about 10 times higher than the current 4G service.
- For the first time, there is no mandatory requirement for upfront payment by the successful bidders.
- Payments for the spectrum can be made in 20 equated annual instalments to be paid in advance at the start of each year.
- This is expected to ease cash flow requirements and lower the cost of doing business.
- The bidders will be given the option of surrendering the spectrum after 10 years with no future liabilities on the balance instalments.
- The spectrum auction will be benefited by the recent telecom sector reforms, such as zero spectrum usage charges (SUC).
SUC currently varies between 3 and 5 percent of the adjusted gross revenue (AGR). depending on the year of acquisition and the zero percent SUC will be a welcome relief to operators and enable a faster 5G roll-out.
7. The FATF and Pakistan’s position on its ‘grey list’
Subject: International Relations
Section: International organization
Context: Ahead of the plenary session of the Financial Action Task Force from June 14 to 17, Pakistan is hoping to get its name removed from the FATF’s ‘grey list’
What is Financial Action Task Force?
- It is an international watchdog for financial crimes such as money laundering and terror financing
- It was established at the G7 Summit of 1989 in Paris to address loopholes in the global financial system
- In the aftermath of the 9/11 terror attack on the U.S., FATF also added terror financing as a main focus area
- Later broadened to include restricting the funding of weapons of mass destruction.
- The FATF currently has 39 members.
- The decision-making body of the FATF, known as its plenary, meets thrice a year
What will FATF do?
- It sets standards or recommendations for countries to achieve in order to plug the holes in their financial systems and make them less vulnerable to illegal financial activities
- It conducts regular peer-reviewed evaluations called Mutual Evaluations (ME) of countries to check their performance on standards prescribed by it
- The reviews are carried out by FATF and FATF-Style Regional Bodies (FSRBs), which then release Mutual Evaluation Reports (MERs).
- For the countries that don’t perform well on certain standards, time-bound action plans are drawn up
What are FATF’s ‘grey’ and ‘black’ lists?
While the words ‘grey’ and ‘black’ list do not exist in the official FATF lexicon, they designate countries that need to work on complying with FATF directives and those who are non-compliant, respectively
- The grey countries are designated as jurisdictions under increased monitoring.
- Currently, 23 countries including Pakistan are on the grey list
- It means countries designated as ‘high-risk jurisdictions subject to call for action. In the most serious cases, members are told to apply counter-measures such as sanctions on the listed countries.
- Currently, North Korea and Iran are on the black list
What is the impact of the countries that are in the FATF lists?
- It makes hard for countries to get aid from organisations like the International Monetary Fund (IMF), Asian Development Bank (ADB), and the European Union.
- It may also affect capital inflows, foreign direct investments, and portfolio flows
8. Telangana records the highest retail inflation in May Kerala the lowest
Subject: International Relations
Section: International organization
Context: Telangana leads the clutch of 11 States that have higher retail inflation than the national headline number for May, while Kerala recorded the lowest.
What is inflation?
It is a general increase in the prices of goods and services in an economy. It decreases the purchasing power of the money
What is inflation targeting?
- Section 45-ZA of the RBI Act, 1934 requires that the Central Government shall, in consultation with the Reserve Bank of India (RBI), determine the inflation target in terms of consumer price index (CPI), once in every five years
- In India, the inflation target is at 4 per cent (with the upper tolerance level of 6 per cent and the lower tolerance level of 2 per cent
Consumer Price Index (CPI) Vs Wholesale Price Index (WPI):
- CPI is a price index, the price of a weighted average market basket of consumer goods and services purchased by households
- The CPI-based inflation data is compiled by the Ministry of Statistics and Programme Implementation (or MoSPI)
- The base year for CPI is 2012
- CPI does take into account the change in prices of services
Composition of Consumer Price Index:
|Component||Weight (in %)|
|Food and beverages||45.86|
|Pan, tobacco and intoxicants||2.38|
|Clothing and footwear||6.53|
|Fuel and light||6.84|
Wholesale Price Index:
- A wholesale price index (WPI) is an index that measures and tracks the changes in the price of goods in the stages before the retail level
- WPI-based inflation data is compiled by Department for Promotion of Industry and Internal Trade (or DPIIT).
- The base year of All-India WPI has been revised from 2004-05 to 2011-12 in 2017
- WPI does not take into account the change in prices of services
Composition of Wholesale Price Index:
|Component||Weight (in %)|
|Fuel & Power||13.15|
|Definition||Amounts to the average change in prices of commodities at the wholesale level.||Indicates the average change in the prices of commodities at the retail level.|
|Publishing office||Office of Economic Advisor (Ministry of Commerce & Industry||National Statistical Office|
|Commodities||Goods Only||Goods and Services both|
|Inflation Measurement||First stage of a transaction||Final stage of a transaction|
|Prices paid by||Manufactures and wholesalers||Consumers|
|Types of Commodities covered||Manufacturing inputs and intermediate goods like minerals, machinery basic metals, etc||Education, communication transportation, recreation, apparel, foods and beverages, housing and medical care|
Note: Base Year to be revised
9. The controversy around the Northern Ireland Protocol
Subject: International relations
Section: International news
Context: The UK government has announced plans to introduce a law which will override the Brexit deal it signed on Northern Ireland
What is Northern Ireland Protocol?
- The Northern Ireland Protocol – agreed with the European Union (EU) in 2019 – has been a source of tension since it came into force at the start of 2021.
- Special trading arrangements were needed for Northern Ireland after the UK voted for Brexit in 2016 (Brexit is the name given to the United Kingdom’s departure from the European Union)
- This is because it’s the only part of the UK with a land border with an EU country – the Republic of Ireland.
- Before Brexit, it was easy to transport goods across this border because both sides had the same EU trade rules. No checks or paperwork were necessary.
- After Brexit, a new system was needed because the EU has strict food rules and requires border checks when certain goods – such as milk and eggs – arrive from non-EU countries
- The UK and the EU agreed that protecting the 1998 Northern Ireland peace deal – the Good Friday Agreement– was an absolute priority. So, both sides signed the Northern Ireland Protocol as part of the Brexit withdrawal agreement, which is now part of international law
What is Good Friday Agreement?
- The Belfast Agreement is also known as the Good Friday Agreement, because it was reached on Good Friday, 10 April 1998. It was an agreement between the British and Irish governments, and most of the political parties in Northern Ireland, on how Northern Ireland should be governed.
- The aim was establish a new, devolved government for Northern Ireland in which unionists and nationalists would share power.
How does the protocol work?
- Instead of checking goods at the Irish border, the protocol agreed that any inspections and document checks would be conducted between Northern Ireland and Great Britain (England, Scotland and Wales). These take place at Northern Ireland’s ports.
- It was also agreed Northern Ireland would keep following EU rules on product standards.
What does the UK want to change?
- Under the Brexit deal, certain goods have to be checked when they enter Northern Ireland from Great Britian
The Current process:
- The goods are checked at ports in Northern Ireland on Arrival
- They can then be moved into the Republic of Ireland once checked
The UK’s new plan :
- the Northern Ireland Protocol Bill, which would enable the U.K. to override provisions of the Brexit deal that concern trading arrangements in Northern Ireland — the Northern Ireland Protocol (NIP)
- Under the new bill, The goods are split into two different lanes
- Goods destined only for Northern Ireland go into the Green Lane and are not checked
- Goods destined for Ireland and the EU go into the Red Lane and checks are carried out
What has been the reaction to the proposed Bill?
- The Bill has triggered strong push back from MPs belonging to Mr. Johnson’s own party, from Irish legislators, and from EU officials
- All of them have pointed out that the legislation would violate international law, damage the U.K.’s reputation as a trade partner, and spark a trade war with the EU.
10. Insacog to look at genomic surveillance data for reasons behind breakthrough infections
Covid genome sequencing facility the Indian SARS-CoV-2 Genomics Consortium (Insacog), will review data to look intoreasons for “breakthrough” infectionsand also check on thepossibility of virus sub-lineagesor new variants.
People who have had an Omicron infection in January are still susceptible to other sub-variants of omicron that are now emerging across the globe, in particular BA.4 and BA.5 that led to a fifth wave of cases in South Africa and is now spreading in Europe.
People who get infected with Covid-19 even after getting a vaccine shot are known as “breakthrough cases”, implying that the infection has broken through the protection provided by the vaccine.
- Officials said India now has BA.4 and BA.5 strains, in addition to the BA.2 variant, which has a slightly higher transmissibility compared to the other Omicron sub-lineages.
- Viruses like SARS-CoV-2 continuously evolve as changes in the genetic code (caused by genetic mutations or viral recombination) occur during replication of the genome.
What is a lineage?
A lineage is a genetically closely related group of virus variants derived from a common ancestor.
What is variant?
A variant has one or more mutations that differentiate it from other variants of the SARS-CoV-2 viruses.
Different classes of SARS-CoV-2 variants:
- Alpha (B.1.1.7 and Q lineages)
- Beta (B.1.351 and descendent lineages)
- Gamma (P.1 and descendent lineages)
- Delta (B.1.617.2 and AY lineages)
- Epsilon (B.1.427 and B.1.429)
- Eta (B.1.525)
- Iota (B.1.526)
- Kappa (B.1.617.1)
- Mu (B.1.621, B.1.621.1)
- Zeta (P.2)
- Omicron (B.1.1.529, BA.1, BA.1.1, BA.2, BA.3, BA.4 and BA.5 lineages)
- Insacog is jointly initiated by the Ministry of Health and the Department of Biotechnology (DBT) with the Council for Scientific and Industrial Research (CSIR) and the Indian Council of Medical Research (ICMR).The review assumes significance in the backdrop of rising Covid cases in the country.
- It is a repository of labs tasked with monitoring the coronavirus variants.
- This is a network of 28 national laboratories — jointly set up by the Health Ministry, the Department of Biotechnology (DBT), the Council of Scientific and Industrial Research (CSIR) and the Indian Council of Medical Research — has been sequencing samples collected from all over the country since the emergence of alpha variant (B.1.1.7) in the UK.
- INSACOG is a multi-laboratory, multi-agency, Pan-India network to monitor genomic variations in the SARS-CoV-2 by a sentinel sequencing effort
11. Centre’s policy on methanol as alternative fuel soon
Subject: Science and Technology
- Methanol is a low carbon, hydrogen carrier fuel produced from high ash coal, agricultural residue, CO2 from thermal power plants and natural gas. It is the best pathway for meeting India’s commitment to COP 21.
- NITI Aayog’s ‘Methanol Economy’ programme is aimed at reducing India’s oil import bill, greenhouse gas (GHG) emissions, and converting coal reserves and municipal solid waste into methanol.
- According to the NITI-Aayog, methanol derived from coal is the most economically viable option for India in view of the abundant reserves it has. It is available at a relatively cheaper than natural gas and crude oil, which are imported.
- Methanol is cost-effective compared with other sources such as ethanol and pointed out a study by NITI-Aayog comparing ethanol, methanol and gasoline.
- Although slightly lower in energy content than petrol and diesel, methanol can replace both these fuels in the transport sector (road, rail and marine), energy sector (comprising DG sets, boilers, process heating modules, tractors and commercial vehicles) and retail cooking (replacing LPG [partially], kerosene and wood charcoal). Blending of 15% methanol in gasoline can result in at least 15% reduction in the import of gasoline / crude oil. In addition, this would bring down GHG emissions by 20% in terms of particulate matter, NOx, and SOx, thereby improving the urban air quality.
- Methanol Economy will also create close to 5 million jobs through methanol production/application and distribution services. Additionally, Rs 6000 crore can be saved annually by blending 20% DME (Di-methyl Ether, a derivative of methanol) in LPG. This will help the consumer in saving between Rs 50-100 per cylinder.
- The Bureau of Indian Standards has notified 20% DME blending with LPG, and a notification for M-15, M-85, M-100 blends has been issued by the Ministry of Road, Transport and Highways. Test standards and plans for the M-15 blend are being evolved in consultation with the Indian Oil Corporation Limited, Automotive Research Association of India and Society of Indian Automobile Manufacturers. In the railway sector, RDSO is working towards blending methanol in the range of 5-20% through direct fuel injection in locomotives.
- On 5 October 2018, Assam Petrochemicals launched Asia’s first canister-based methanol cooking fuel programme. This initiative is an extension of our Hon’ble Prime Minister’s vision of reducing the import of crude oil and striving towards the provision of a clean, cost-effective and pollution-free cooking medium. Methanol stoves can result in at least 20% savings for households. After the success of the pilot, the methanol cooking programme was scaled up to 1,00,000 households in the States of Uttar Pradesh, Maharashtra, Gujarat, Telangana, Andhra Pradesh, Goa, Karnataka, Jharkhand and Manipur.
- Methanol Institute, which has the world’s largest producers and distributors as its members, has been in the country since 2016 working with, besides Niti Aayog,the Ministries of Petroleum and Natural Gas, Renewable Energy and Road Transport and Highways
- This fuel is generally produced by steam-reforming natural gas to create a synthesis gas. Feeding this synthesis gas into a reactor with a catalyst produces methanol and water vapor. Various feed stocks can produce methanol, but natural gas is currently the most economical.
- Methanol can be an alternative to conventional transportation fuels. The benefits of methanol include:
- Lower production costs—Methanol is cheap to produce relative to other alternative fuels.
- Improved safety—Methanol has a lower risk of flammability compared to gasoline.
- Increased energy security—Methanol can be manufactured from a variety of domestic carbon-based feed stocks, such as biomass, natural gas, and coal.