The Asian Development Bank (ADB) will boost climate-related lending by up to $7.2 billion following an agreement by the United States and Japan to provide risk guarantees for some existing loans.
This marks the first-ever use of sovereign guarantees for climate finance.
ASIAN DEVELOPMENT BANK
About
ADB was founded in 1966 following the Conference on Asian Economic Cooperation organized by the United Nations Economic Commission for Asia and the Far East.
Headquarters: Located in Manila, Philippines.
Status: Official UN Observer.
Aims and Objectives
Reducing poverty in Asia and the Pacific region.
Provide Program Assistance that provides loans (hard/soft), technical assistance, and grants.
Enhances effectiveness through policy dialogues, advisory services, and co-financing to mobilize additional financial resources.
Goals and Targets
ADB raises funds primarily through bond issues on global capital markets.
The ADB has set a climate finance target of $100 billion from 2019 to 2030. The U.S. will guarantee $1 billion of existing ADB loans, while Japan will underwrite $600 million.
Advantages of the Guarantee Structure:
Expands ADB’s lending capacity.
Lending space will be used over 5 years, while the guarantees will last for 25 years.
Example: A sustainable aviation fuel initiative in Pakistan using cooking oil, with ADB covering about half of the $90 million cost.
Membership
Total Members: 67 countries, with 48 from Asia and the Pacific.
Membership Eligibility: Includes members of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) and non-regional developed countries.
Major Shareholders: Japan and the United States (Each hold 15.607% of shares), China ( 6.444%), India (6.331%), Australia (5.786%).
The Environment Ministry has agreed to a long-standing request from industries to remove the need for environmental clearance and permission to set up operations. This will make it easier for businesses to comply with regulations.
India’s Environmental Policies and Goals
Streamlining Compliance: The government has removed the requirement for ‘white category’ industries to obtain both Environmental Clearance (EC) and Consent to Establish (CTE) {Dual eco clearance}. This decision is expected to reduce the compliance burden on businesses, allowing them to operate more efficiently without duplicative approvals.
Classification of Industries: Industries are categorized into four color-coded groups based on their pollution potential: Red (most polluting), Orange, Green, and White (least polluting).
The recent exemption applies specifically to those in the White category, which includes sectors like solar energy production and fly ash brick manufacturing.
Alignment with National Goals: This move aligns with India’s broader environmental objectives as outlined in the National Action Plan on Climate Change (NAPCC) and commitments made under international agreements like the Paris Agreement.
These include targets for reducing emissions intensity and increasing non-fossil fuel energy sources.
Focus on Sustainable Development: The policy shift reflects a growing emphasis on balancing economic growth with ecological sustainability. It aims to foster an environment conducive to green technologies while still addressing pollution control through existing frameworks.
Note: Dual Eco-Clearance refers to the requirement for certain industries in India to obtain both Environmental Clearance (EC) and Consent to Establish (CTE) before commencing operations, ensuring compliance with environmental regulations.
Impacts of Eliminating Dual Eco-Clearance for Industrial Projects
Reduced Administrative Burden: By eliminating the need for dual clearances, businesses can save time and resources that would otherwise be spent navigating complex regulatory requirements.
Encouragement of Green Industries: The exemption is likely to encourage investment in green technologies and industries that contribute positively to environmental sustainability. This aligns with India’s goal of achieving net-zero emissions by 2070.
Potential Increase in Industrial Activity: With fewer regulatory hurdles, there may be an uptick in industrial activities within the exempted categories, potentially leading to job creation and economic growth in these sectors.
What are other potential risks associated with the new eco-clearance framework?
Environmental Oversight Concerns: Critics argue that easing compliance requirements could lead to lax environmental oversight, increasing the risk of pollution incidents if industries are not adequately monitored.
Inconsistent Implementation: The reliance on state departments for permitting could result in inconsistent application of regulations across different regions, potentially leading to environmental degradation in areas where enforcement is weaker.
Long-Term Sustainability Risks: While immediate economic benefits may arise from reduced compliance burdens, there is a concern that neglecting environmental checks could compromise long-term sustainability goals, particularly if industries expand without adequate ecological safeguards.
Way forward:
Strengthen Monitoring Mechanisms for White Category Industries: Establish periodic audits and use digital monitoring tools to ensure compliance, maintaining oversight without imposing excessive regulatory burdens.
Standardize Implementation Across States: Develop clear, consistent guidelines for states to prevent uneven enforcement and ensure that reduced compliance requirements do not compromise environmental standards.
Mains PYQ:
Q Industrial pollution of river water is a significant environmental issue in India. Discuss the various mitigation measures to deal with this problem and also the government’s initiatives in this regard. (UPSC IAS/2024)
With Donald Trump’s win in the U.S. and ongoing conflicts in West Asia, India faces a significant challenge at COP29: it must reduce carbon emissions fairly, sustain economic growth, and attract climate funding for essential investments.
Primary Challenges Facing India’s Renewable Energy Transition
Policy Instability: Frequent changes in policies create uncertainty for investors, hindering long-term planning and investment in renewable energy projects.
Financial Constraints: India requires substantial investment—estimated at about $10 trillion by 2070—for its energy transition, yet access to affordable financing remains a significant barrier.
Infrastructure Limitations: The existing energy infrastructure is often inadequate to support the rapid deployment of renewable technologies, particularly in rural areas where access to clean energy is limited.
Dependence on Fossil Fuels: Coal remains a dominant source of energy, accounting for approximately 73% of total power generation. This reliance complicates the shift towards renewables.
Geographical Disparities: There are uneven resources and infrastructure across regions, affecting the adoption and efficiency of renewable technologies.
Environmental and Social Concerns: Rapid expansion of renewable energy can lead to land use conflicts, impacting agriculture and local ecosystems. Additionally, there are concerns about job losses in traditional energy sectors during the transition.
How India Can Secure Financing for Its Green Transition?
International Collaboration: Engaging with global partners through initiatives like the International Solar Alliance can attract foreign investments and technology transfers.
Innovative Financing Models: Implementing operational expenditure (opex) models rather than capital expenditure (capex) can lower upfront costs for consumers. For example, community solar projects can allow shared ownership and reduce individual financial burdens.
Public-Private Partnerships (PPPs): Encouraging collaborations between government entities and private investors can mobilize resources for large-scale renewable projects while sharing risks.
Targeted Subsidies: Redirecting subsidies from fossil fuels to clean energy technologies can create a more favorable financial environment for renewable investments. This includes enhancing support for green technologies through tax incentives and grants.
Strategies That Can Be Implemented (Way Forward)
Decentralized Energy Systems: Promoting distributed renewable energy sources (like rooftop solar) can empower local communities and reduce dependence on centralized power systems. Innovative business models such as community solar can enhance accessibility.
Digital Integration: Leveraging digital technologies to manage energy distribution more efficiently can optimize resource use and enhance system resilience. Investments in smart meters and AI-driven energy management systems are essential.
Circular Economy Initiatives: Developing a circular economy framework for managing waste from renewable technologies can improve resource efficiency and reduce environmental impacts. This includes recycling materials from solar panels and batteries.
Focus on Supply Chains: Positioning India within global clean energy supply chains rather than adopting protectionist policies can enhance competitiveness and attract investments. Collaborating with other countries on technology development is crucial.
Public Awareness Campaigns: Educating consumers about the benefits of renewable technologies and encouraging adoption through financial incentives can drive demand for green solutions
Mains PYQ:
Q Discuss global warming and mention its effects on the global climate. Explain the control measures to bring down the level of greenhouse gases which cause global warming, in the light of the Kyoto Protocol, 1997. (UPSC IAS/2022)
At the COP29 climate summit in Baku, Azerbaijan, the adoption of Article 6.4 of the Paris Agreement has paved the way for global carbon trading under UN supervision.
This new development allows UN member countries to trade carbon credits globally.
What is Article 6.4?
Article 6.4 of the Paris Agreement establishes a global carbon market to facilitate carbon credit trading between countries.
It is part of Article 6, which outlines mechanisms for international cooperation in achieving net-zero emissions.
Objective: Enable countries to offset their emissions by investing in emission reduction projects in other countries.
It establishes a global carbon market overseen by a UNFCCC SupervisoryBody.
This body would develop rules, monitors credit issuance, and ensures compliance with international standards.
It allows countries to generate and trade Emission Reduction Credits (ERCs), which represent reductions in CO₂ or equivalent greenhouse gases.
Credits are earned from approved climate projects and can be traded globally.
Through subsections like Article 6.2, countries can use ITMOs (Internationally Transferred Mitigation Outcomes) to meet their NDCs, which are tradeable units representing emissions reductions.
Significance of Article 6.4
Cost-Effective Climate Action: By enabling global carbon markets, Article 6.4 could save an estimated $250 billion annually in implementing climate plans, providing a cost-efficient path to emission reductions.
Support for NDCs: The mechanism helps countries meet their NDC targets under the Paris Agreement, allowing more flexibility and incentivizing investments in green projects worldwide.
Economic Growth and Climate Mitigation: Carbon markets foster investments in clean energy, create jobs in climate-focused sectors, and link economic growth with climate action.
Encourages Sustainable Development: Article 6.4 incentivizes sustainable projects in developing countries, promoting green technology transfer and supporting local economies.
Types of Carbon Credit Projects under Article 6.4
Emission Reduction Projects
Energy Efficiency Improvements: Reducing energy consumption (e.g., efficient lighting, better insulation).
Renewable Energy: Replacing fossil fuels with solar, wind, or hydroelectric power.
Emission Removal Projects
Reforestation and Afforestation: Increasing forest cover to absorb CO₂.
Soil Carbon Sequestration: Storing carbon in soil through agricultural practices.
Carbon Storage Projects
Geological Storage: Storing CO₂ in deep underground formations.
Biochar Production: Locking carbon in biochar, enhancing soil fertility.
Technological Carbon Capture and Storage (CCS)
Direct Air Capture: Capturing CO₂ from the air and storing it underground or using it industrially.
Ocean-Based Solutions: Enhancing ocean CO₂ absorption, such as through algae cultivation.
Issues with Article 6.4
Carbon Offsetting Criticisms: Critics argue that offsetting doesn’t reduce global emissions but shifts responsibility, allowing countries to continue emitting while claiming neutrality.
Carbon Accounting Challenges: Unreliable carbon accounting can lead to “phantom credits,” where emissions reductions are overstated or inaccurately recorded, failing to match actual reductions.
Greenwashing Risks: Some countries and companies may use carbon credits as a form of greenwashing, claiming carbon neutrality while continuing to pollute.
Equity and Climate Justice Concerns: Developing nations, which contribute less to global emissions, are the most vulnerable to climate impacts.
Potential for Reversal Risks: Projects that store carbon in natural reservoirs risk releasing it back into the atmosphere. Some standards allow projects to end monitoring if reversal risk is considered “negligible,” which remains undefined and problematic.
PYQ:
[2011] Regarding “carbon credits”, which one of the following statements is not correct?
(a) The carbon credit system was ratified in conjunction with the Kyoto Protocol.
(b) Carbon credits are awarded to countries or groups that have reduced greenhouse gases below their emission quota.
(c) The goal of the carbon credit system is to limit the increase of carbon dioxide emission.
(d) Carbon credits are traded at a price fixed from time to time by the United Nations Environment Programme.
Savanna elephants have experienced a significant population decline of around 70% across surveyed sites, primarily due to poaching and habitat loss.
Decline in African Elephants Population
Researchers conducted a comprehensive assessment of these species using data from 475 sites in 37 countries between 1964 and 2016.
Savanna Elephants: Populations declined by about 70% on average at surveyed sites.
Forest Elephants: Populations fell by about 90% on average at surveyed sites.
The total population of African elephants decreased by 77% on average at surveyed sites.
Features of African Elephants:
African elephants are the largest land animals on Earth, known for their size, intelligence, and complex social structures.
They are divided into savanna (bush) elephants (larger, with bigger tusks and open grassland habitat) and forest elephants (smaller, with straighter tusks and dense forest habitats).
Highly intelligent, African elephants display memory, empathy, and intricate social bonds within herds.
20,000 pompano fingerlings were released into the sea off Vizhinjam as part of an artificial reef project aimed at replenishing marine fishery resources and promoting sustainable fishing.
About the Artificial Reef Project in Kerala:
Details
Location
• Covers 42 fishing villages in Thiruvananthapuram district, from Pozhiyoor to Varkala.
Aims and Objectives
• Enhance fish resources along Kerala’s coast.
• Support sustainable fishing and improve fishing community livelihoods.
• Implemented by KSCADC (Kerala State Coastal Area Development Corporation).
• Technical support from CMFRI (Central Marine Fisheries Research Institute).
Future Expansion Plans:
• Phase II: Proposed to cover 96 villages in Kollam, Alappuzha, Ernakulam, and Thrissur districts (₹29.76 crore).
• Phase III: Proposed to cover 96 villages in northern districts (₹25.82 crore).
Significance
• Boosts marine biodiversity.
• Increases fish stocks and supports breeding environments.
• Promotes sustainable fishing practices.
• Enhances livelihoods of local communities.
The study of Corpse Flower’s (Amorphophallus titanum) heat generation and odor emission has revealed how it attracts pollinators through unique adaptations for reproduction.
About theCorpse Flower (Titan Arum):
Details
Scientific Name
Amorphophallus titanum
Habitat
Rainforests of western Sumatra, Indonesia
Features
Grows up to 10-12 feet in height.
Blooms once every 5-10 years; bloom lasts 24-48 hours.
Carrion-feeding insects (flies, beetles) are attracted by smell and heat.
Strong smell of rotting flesh to attract pollinators;
Smells like cheese, garlic, decaying fish, sweaty socks, and feces
Q) Describe the major outcomes of the 26th session of the Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC). What are the commitments made by India in this conference? (UPSC CSE 2021)
Q) Do you think India will meet 50 percent of its energy needs from renewable energy by 2030? Justify your answer. How will the shift of subsidies from fossil fuels to renewables help achieve the above bjective? Explain. (UPSC CSE 2022)
Q) Explain the purpose of the Green Grid Initiative launched at the World Leaders Summit of the COP26 UN Climate Change Conference in Glasgow in November 2021. When was this idea first floated in the International Solar Alliance (ISA)? (UPSC CSE 2021)
Mentor’s Comment:At COP28, 63 countries pledged to reduce cooling emissions by 68% by 2050 through the Global Cooling Pledge. Hence, expanded commitments are necessary at COP29 to enhance participation in global cooling initiatives and strengthen partnerships across sectors.
Today’s editorial emphasizes the critical role of international cooperation in developing sustainable cooling technologies to combat climate change. It underscores the importance of collaboration among nations to develop clean technologies that not only address immediate cooling needs but also contribute to long-term sustainability goals.
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Let’s learn!
Why in the News?
The recent international agreements and initiatives, such as the Wilmington Declaration by the Quad nations and commitments made at COP28 focuses on the urgent need for sustainable cooling technologies in the context of global warming and climate change.
Key Initiatives and Collaborations taken by countries:
•Wilmington Declaration: Issued by the Quad nations (Australia, India, Japan, and the U.S.) on September 21, 2024. It focuses on sustainable energy solutions with an emphasis on high-efficiency cooling systems. •Montreal Protocol and Kigali Amendment: The Kigali Amendment, adopted in 2016, aims to phase down hydrofluorocarbons (HFCs), potent greenhouse gases commonly used in refrigeration and air conditioning. Initiatives like the Kigali •Cooling Efficiency Program (K-CEP) provide technical support and capacity building for countries, particularly those in the developing world. •U.S.-India Partnership: India has committed to significant investments in solar and cooling infrastructure in the Indo-Pacific region. Joint plans include expanding manufacturing capacities for energy-efficient air conditioners and ceiling fans.
What were the key Commitments from COP28? •On Energy Transition Goals: Countries committed to double the global average annual rate of energy efficiency improvements by 2030. A goal was set to triple global renewable energy capacity to 11,000 GW by 2030. •On Global Stocktake (GST): The first GST assessed progress towards the Paris Agreement, emphasizing the need for significant reductions in fossil fuel consumption by 2050. • On Loss and Damage Fund: An agreement was reached to establish a Loss and Damage Fund with initial contributions of about $800 million to support vulnerable nations affected by climate change. •On Methane Emissions Reduction: Countries committed to reducing global methane emissions by 30% from 2020 levels by 2030, with new regulations introduced by several nations. While no complete fossil fuels phase-out was agreed upon, discussions included calls for the gradual elimination of inefficient fossil fuel subsidies. •On Sustainable Agriculture Initiatives: Nearly 160 nations signed a declaration to integrate food systems into their Nationally Determined Contributions (NDCs) by 2025. Around $12.8 billion was pledged to the Green Climate Fund to support developing nations in their climate efforts.
Significance of Global Collaborations for Clean Technologies
Accelerating Innovation: Countries can combine their scientific knowledge, leading to faster advancements in clean technologies.
Collaborative efforts can attract funding and resources, speeding up the development of critical solutions.
Addressing Global Challenges: Coordinated responses are essential for tackling climate change effectively, as seen with initiatives like the Global Cooling Pledge.
International partnerships help establish common standards, facilitating trade and effective implementation of technologies.
Economic Growth: Investing in clean technologies creates new industries and job opportunities, driving economic growth.
Supporting Developing Economies: Involving diverse stakeholders ensures that solutions are accessible and meet the needs of vulnerable populations and their capacity building.
What role do emerging markets play in the global cleantech landscape?
Growing Energy Demand: Emerging markets are expected to account for 90% of global energy demand growth by 2035, making them crucial for shaping future energy consumption.
Decarbonization Efforts: These markets contribute about 75% of global carbon emissions, highlighting the need for sustainable practices to achieve climate goals.
Innovation Hubs: Emerging economies are becoming centers for innovation in clean technologies, supported by initiatives that address barriers to investment.
Renewables now make up around 75% of new power generation in emerging markets, presenting significant investment potential for clean energy projects.
International Collaboration: Global cooperation is essential to help these markets transition to clean energy by aligning regulations and sharing best practices.
Transitioning to renewable energy can alleviate energy poverty, providing access to electricity and clean cooking solutions for underserved Nations.
What are the challenges and opportunities associated with financing clean technology initiatives?
1) Challenges:
High Cost of Capital: Clean energy projects in emerging markets often face financing costs that are significantly higher than in developed countries, sometimes up to seven times more expensive, which inflate risk premiums for investors.
Limited Access to Funds: Emerging economies account for two-thirds of the global population but receive only one-fifth of clean energy investments. This disparity creates a funding gap that hinders the transition to sustainable energy systems.
High Reliance on Public Financing: Many clean energy projects in developing countries rely heavily on public sources of finance. However, these sources are often insufficient to meet the growing investment needs, especially post-COVID-19, which has strained public finances further.
Regulatory and Policy Barriers: Uncertain regulatory environments and lengthy procedures for project approvals can deter investment. For example, subsidies favoring fossil fuels and restrictions on foreign investment further complicate financing efforts.
2) Opportunities:
Growing Demand for Clean Energy: The increasing global focus on sustainability and the urgent need to reduce carbon emissions create a favorable environment for investing in clean technologies. Emerging markets are positioned to lead this transition by leveraging their renewable resources.
Innovative Financing Models: Blended finance approaches, which combine public and private funding, can help mitigate risks and attract investment in clean technologies. Development Finance Institutions (DFIs) can play a crucial role by providing guarantees or risk capital.
Technological Advancements: Advances in clean technology are reducing costs and improving efficiency, making it easier to attract investment.
For example, technologies like solar PV and wind power are becoming more financially viable, encouraging investment from both domestic and international sources.
Carbon Markets: The establishment of domestic carbon markets provides new revenue streams for clean energy projects, enhancing their financial viability. This can attract both local and international investors looking for sustainable investment opportunities.
International Collaboration: Global partnerships can facilitate knowledge sharing and provide access to capital for clean technology initiatives.
For example, initiatives like the World Economic Forum‘s efforts to mobilize investment in emerging economies highlight the importance of collaborative approaches
Way Forward: While financing clean technology initiatives faces notable challenges, particularly in emerging markets. Addressing the barriers effectively could unlock substantial investments needed for a successful transition to clean energy systems globally. COP29 must build on the momentum of COP28 by expanding cooling commitments.
Since 1977, the South Lhonak Lake, a glacial lake in Sikkim has expanded significantly, growing from 17 hectares to 167 hectares by 2023.
Formation of Glacial Lakes:
When a glacier melts and retreats, the hollow left behind often fills with water, creating a glacial lake.
The rocky moraine at the glacier’s end can act as a natural dam, holding the water to form the lake.
Glacial lakes act as hydrological buffers, regulating water flow from melting ice, which can sometimes pose challenges to downstream communities.
Glacial lakes often have a vivid blue color, similar to swimming pools, due to the scattering of light by fine rock particles (rock flour) in the water.
There are several types of glacial lakes, each formed by specific processes and glacier dynamics:
Moraine-Dammed Lakes: Formed when moraine debris piles up at the end of a glacier and traps meltwater behind it. These are common and pose risks of outburst flooding.
Kettle Lakes: This was created when a chunk of glacier ice is buried in the moraine and eventually melts, leaving a depression filled with water.
Cirque Lakes: Formed in circular basins (cirques) carved by glaciers at high elevations. These lakes are often small and located at the glacier’s original head.
Pro-glacial Lakes: Situated in front of the glacier, between the ice and the moraine dam. These lakes are sometimes formed when the glacier’s snout melts and deposits water in the valley.
Tarn Lakes: Formed in depressions left behind in the cirques or basins after the glacier has completely melted.
Major Glacial Lakes in India
India’s Himalayan region is home to numerous glacial lakes, each with unique characteristics:
Gurudongmar Lake (Sikkim): One of the highest lakes in the world at 5,430 meters above sea level, fed by glacial melt and known for its religious significance.
Chandra Taal (Himachal Pradesh): A stunning crescent-shaped lake in the Lahaul-Spiti region at 4,300 meters. It is surrounded by snow-capped mountains and fed by glacier melt.
Samiti Lake (Sikkim): Located along the trek to Kanchenjunga and known for its clear blue waters and reflective quality.
Satopanth Tal (Uttarakhand): Found in the Garhwal Himalayas, this lake lies close to Satopanth Glacier and is considered sacred by locals.
South Lhonak Lake (Sikkim): A growing lake fed by three glaciers, expanding rapidly due to climate change and posing risks of glacial lake outburst floods.
PYQ:
[2019] Consider the following pairs:
Glacier: River
Bandarpunch: Yamuna
Bara Shigri: Chenab
Milam: Mandakini
Siachen: Nubra
Zemu: Manas
Which of the pairs given above are correctly matched?
(a) 1, 2 and 4 only
(b) 1, 3 and 4 only
(c) 2 and 5 only
(d) 3 and 5 only
