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GS Paper: GS3

  • Why AI’s present and future bring some serious environmental concerns?

    Why in the News? 

    Google is in the news due to its recent annual environment report, which revealed a 13% increase in its emissions footprint for 2023 compared to the previous year.

    Why Emissions are higher?

    • Increased Electricity Consumption: Google reported a 13% increase in its emissions footprint in 2023, primarily due to a 17% rise in electricity consumption in its data centres.
    • Energy-Intensive AI Operations: AI models require significantly more computational power than traditional searches, leading to higher energy consumption. For instance, a single AI query can use 10 to 33 times more energy than a standard Google search.
    • Cooling Demands: The increased workload from AI operations generates more heat, necessitating stronger cooling systems in data centers leading to a high demand of water.

    Indian Scenario

    • Growing Demand for Data Centers: As AI and data center deployment increases in India, the environmental impact, particularly in terms of electricity and water consumption, is expected to rise.
    • Water Resource Strain: Data centers require significant water for cooling. For example, a data center serving OpenAI’s GPT-4 model reportedly consumed 6% of its district’s water supply in Iowa, highlighting there could be potential challenges in water-scarce regions like India.
    • Need for Sustainable Practices: The experts advise the importance of planning AI and data center expansion in India to minimize environmental impacts. Companies must adopt efficient processes to reduce their emissions footprint.

    The initiative taken by Govt to regulate AI

    • National Strategy for Artificial Intelligence: In 2018, NITI Aayog released a discussion paper outlining India’s National Strategy for AI.
    • Draft Personal Data Protection Bill: The Ministry of Electronics and Information Technology (MeitY) released a draft Personal Data Protection Bill in 2019 which had provisions related to data used for AI systems.
    • Ethical AI Principles: In 2021, the Ministry of Electronics and Information Technology (MeitY) released a set of “Ethical AI Principles” as part of India’s AI governance framework
    • Regulatory Sandbox for AI: The Reserve Bank of India (RBI) has created a regulatory sandbox to test AI applications in the financial sector.
    • AI Skilling and Research: The government has launched initiatives like the National AI Portal, AI Hackathons, and AI Research, Analytics and Knowledge Assimilation (AIRAWAT) to promote AI research and skills in the country.

    Alternatives for Government Action (Way Forward) 

    • Promote Energy Efficiency: The government can encourage data centers to adopt energy-efficient technologies and practices. This includes optimizing cooling systems and utilizing renewable energy sources to power operations.
    • Regulatory Framework: Need to implement regulations that require data centres to report their energy and water consumption can help monitor and manage their environmental impact.
    • Investment in Renewable Energy: The government should promote the use of renewable energy sources, such as solar and wind, to power data centers.
    • Research and Development: Government should support R&D in sustainable AI technologies and energy-efficient data processing can help mitigate the environmental impact of AI deployment.
    • Public Awareness Campaigns: The need to educate businesses and the public about the environmental impacts of AI and data centres can foster more sustainable practices and encourage responsible usage of technology.

    Mains PYQ: 

    Q The emergence of the Fourth Industrial Revolution (Digital Revolution) has initiated e-Governance as an integral part of government”. Discuss  (UPSC IAS/2020)

  • How oil spills impact the environment?  

    Why in the news?

    Typhoon Gaemi caused widespread damage in Taiwan, the Philippines, and southeastern China, leading to the sinking of the oil tanker MT Terra Nova in Manila Bay.

    MT Terra Nova Incident

    • The MT Terra Nova, an oil tanker, capsized in Manila Bay due to severe weather conditions caused by Typhoon Gaemi. It was en route to Iloilo, Philippines, when it sank, resulting in one crew member’s death and the rescue of 16 others.
    • The sinking of the MT Terra Nova has raised alarms about a potential oil spill that could become the largest in Philippine history, threatening marine life and coastal ecosystems. The spill has already spread several kilometers, prompting urgent containment efforts.
    • The Philippines’ Coast Guard and other agencies are deploying containment booms and skimmers to mitigate the environmental damage. Booms are used to slow the spread of oil, while skimmers are boats that remove oil from the water surface.

    How Oil Spills impact the environment? 

    • Immediate Effects on Marine Life: Oil spills disrupt photosynthesis in marine plants and phytoplankton, which are crucial for oxygen production. The toxic exposure from oil can harm fish and other marine animals, particularly those near the surface.
    • Impact on Birds: Oil can coat the feathers of birds, compromising their insulation and leading to hypothermia and drowning.
    • Long-term Ecological Damage: Oil spills can result in bioaccumulation of toxic substances in the food chain, affecting higher-level predators, including humans.
    • Threat to Coastal Ecosystems: Coastal habitats like mangroves, coral reefs, and marshlands are especially vulnerable, as oil can suffocate these environments and kill vital plants and animals. Recovery from spills can take decades, with some species facing extinction.
    • Economic Impact: Communities that rely on fishing and tourism suffer economically due to oil spills, as cleanup efforts are costly and lengthy, diverting resources from other critical areas.

    Major Oil Spills from the Past

    • Exxon Valdez Spill (1989): One of the worst oil spills, it released approximately 11 million gallons of crude oil into Prince William Sound, killing an estimated 250,000 seabirds, 2,800 sea otters, and numerous other marine animals.  
    • Deepwater Horizon Disaster (2010): This incident saw an estimated 210 million gallons of oil spill into the Gulf of Mexico over 87 days.  

    Conclusion: Need to implement advanced containment measures and cleanup technologies to effectively manage oil spills. This includes deploying more sophisticated skimmers and absorbent materials, as well as utilizing drones and remote sensing to monitor the spread of oil and assess environmental damage.

  • India’s illegal coal mining problem      

    Why in the News?

    On July 13, three workers died of asphyxiation inside an illegal coal mine in Gujarat’s Surendranagar district.

    How Prevalent is Illegal Coal Mining in India?

    • Illegal coal mining has led to multiple fatalities, including recent incidents in Gujarat, Jharkhand, and West Bengal, highlighting its prevalence and dangers.
    • There are 10 workers who have died in illegal mining incidents in Gujarat alone this year, showcasing the ongoing risks associated with this activity.
    • Illegal mining is often conducted in abandoned mines or shallow coal seams, particularly in remote areas, where monitoring and enforcement of regulations are weak.

    What are the Legal Frameworks Governing Coal Mining in India?

    • Coal Mines (Nationalisation) Act, 1973: This act nationalized coal mining in India, regulating who can mine coal and under what conditions.
    • Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act): This central legislation governs the mining sector, detailing processes for acquiring mining licenses and regulating mining activities. It empowers state governments to frame rules to prevent illegal mining.
      • While the MMDR Act provides a framework, the enforcement and regulation of illegal mining fall under state jurisdiction.

    Why is the Responsibility for Addressing Illegal Mining Placed on State Governments?

    • Law and Order Issue: Illegal mining is categorized as a law and order problem, which is a subject under the State List of the Constitution, making it the responsibility of state governments to address.
    • Limited Central Authority: The Union government often shifts the responsibility to state authorities, citing the decentralized nature of governance in matters of local enforcement and regulation.

    What Factors Contribute to the Persistence of Illegal Coal Mining?

    • High Demand for Coal: With coal accounting for 55% of India’s energy needs, the high demand often exceeds legal supply leading to illegal mining activities.
    • Poverty and Unemployment: Many coal-rich areas are home to impoverished populations who resort to illegal mining as a source of livelihood due to limited job opportunities.
    • Weak Regulatory Enforcement: Inadequate monitoring and enforcement of mining regulations in remote areas allow illegal mining operations to flourish.
    • Political Patronage: Allegations of political leaders’ involvement in illegal mining operations complicate efforts to curb these activities, as seen in various states.

    What Safety Risks Do Workers Face?

    • Lack of Safety Equipment: Workers often operate without helmets, masks, or other protective gear, significantly increasing their risk of injury or death.
    • Hazardous Working Conditions: Illegal mines are typically unregulated, lacking proper structural support, making them vulnerable to cave-ins, landslides, and explosions.
    • Toxic Gas Exposure: Miners are at risk of asphyxiation from inhaling toxic gases like carbon monoxide, as evidenced by recent fatalities in Gujarat.
      • Continuous exposure to coal dust and hazardous substances can lead to respiratory issues and chronic health conditions, further endangering workers’ health.

    Conclusion: Need to implement advanced surveillance technologies, such as drones and satellite imaging, to monitor and detect illegal mining activities in real-time. This can improve the efficiency of enforcement agencies in identifying and responding to illegal operations swiftly.

  • NASA’s Cassini-Huygens Mission

    Why in the News?

    • US space agency NASA’s Cassini-Huygens spacecraft launched in October 1997.
      • Using Cassini’s radar data, scientists from Cornell University have discovered new information about the liquid ocean on Titan, Saturn’s largest moon.

    Observations made about Titan

    • Titan is composed of hydrocarbons – organic chemicals consisting of carbon and hydrogen.
    • The astronomers have reportedly located calm seas of methane with a slow tidal current.

    About Cassini-Huygens Mission

    • The Cassini-Huygens mission was a collaborative project between NASA, the European Space Agency (ESA), and the Italian Space Agency (ASI) to explore Saturn and its moons.
    • The spacecraft was named after astronomers Giovanni Cassini and Christian Huygens.
    • The mission consisted of the Cassini orbiter and the Huygens probe.
    • It was launched on October 15, 1997.
    • It ended its mission on September 15, 2017 by plunging into Saturn’s atmosphere.

    Key Achievements:

    • Saturn Exploration:
      • Detailed study of Saturn’s atmosphere, rings, and magnetosphere.
      • Discovered new rings and observed the complex structure of the existing ones.
    • Moons of Saturn:
      • Titan Exploration: Huygens probe successfully landed on Titan, Saturn’s largest moon, on January 14, 2005, providing the first direct exploration of Titan’s surface and atmosphere.
      • Enceladus Discoveries: Found water-ice plumes erupting from Enceladus, indicating a subsurface ocean that could potentially harbor life.
    • Other Moons: Provided detailed images and data on other moons like Lapetus, Rhea, Dione, and Tethys.
    • Technological Milestones:
      • Demonstrated the success of long-duration missions in deep space.
      • Advanced the understanding of spacecraft navigation and operation in complex planetary environments.

    PYQ:

    [2014] Which of the following pairs is/are correctly matched?

    Spacecraft Purpose
    1. Cassini-Huygens Orbiting the Venus and transmitting data to the Earth
    2. Messenger Mapping and investigating the Mercury
    3. Voyager 1 and 2 Exploring the outer solar system

    Select the correct answer using the code given below:

    (a) 1 only
    (b) 2 and 3 only
    (c) 1 and 3 only
    (d) 1, 2 and 3

  • A big step towards the transformation of various sectors  

    Why in the news?

    The 2024-25 Budget is a progressive proposal featuring several commendable initiatives aimed at boosting India’s economic growth and advancing social progress.

    Prioritized areas in the recent Budget 2024-25

    • Job Creation and Skilling: The budget allocates ₹1.48 lakh crore towards job creation, employment, and skilling, emphasizing the importance of developing a skilled workforce to support India’s service sector. This shift from a focus on manufacturing to skilling reflects a strategic move towards building a service-oriented economy.
    • Energy Transformation: There is significant investments are directed towards energy transformation initiatives, including solar panel manufacturing and nuclear energy development. The budget allocates ₹89,287 crore to crucial sectors, indicating a commitment to sustainable energy solutions.
    • Healthcare Initiatives: The budget includes measures to enhance healthcare access, such as customs duty exemptions on life-saving cancer medications and components for advanced medical equipment.
    • Technology and Innovation: A framework with nine priorities is introduced to leverage advanced technology and foster collaboration between the government and private sector, promoting growth and innovation across various sectors.
      • For example: The budget allocates ₹1 lakh crore specifically for research and innovation, accompanied by a 50-year interest-free loan.

    What does the budget say on Accessibility and Affordability?    

    • Customs Duty Exemptions on drugs: The budget exempts customs duties on three essential cancer medications, making them more affordable and accessible to patients. This move addresses the high costs associated with cancer treatments, which often pose significant barriers to access.
    • Support for Medical Equipment: Customs duties are also waived for components of X-ray tubes and digital detectors, which are crucial for advanced medical technologies.
    • Alignment with Domestic Capacity: The budget emphasizes aligning customs duties with domestic capacity under the phased manufacturing program, fostering a conducive environment for startups and encouraging local manufacturing.

    On Prioritizing Inclusivity and Fiscal Prudence

    • Women’s Workforce Participation: The budget focuses on boosting women’s participation in the economy through targeted initiatives such as hostels, creches, and skilling programs.
      • According to a report by McKinsey, India can increase its 2025 GDP, estimated at $4.83 trillion, by 16%-60% simply by enabling women to participate in the economy on par with men
    • Research and Development: With India spending only 0.7% of its GDP on research, the budget encourages private sector collaboration with the government to increase investments in R&D. This collaboration is vital for fostering innovation and ensuring sustainable economic growth.
    • Public-Private Partnerships: The budget promotes public-private partnerships to enhance healthcare delivery and infrastructure, reflecting a commitment to inclusivity and collaboration in achieving economic and social goals.

    Conclusion: The government should expand the scope of skilling programs to cover a wider range of sectors and skill levels while ensuring the workforce is equipped to meet the evolving demands of the service-oriented economy.

  • ICMR develops CRISPR Cas-based TB Detection Kit

    Why in the News?

    The Indian Council of Medical Research (ICMR) Regional Medical Research Centre for North East has developed the “world’s cheapest CRISPR Cas-based TB testing system”.

    Back2Basics: CRISPR-Cas9 Technology

    • CRISPR-Cas9 stands for Clustered Regularly Interspaced Short Palindromic Repeats and CRISPR-associated protein 9.
    • It is a technology that allows geneticists and researchers to edit parts of the genome by altering sections of the DNA sequence.
    • Emmanuelle Charpentier and Jennifer Doudna’s work on CRISPR-Cas9 as a ‘molecular scissor’ earned them the 2020 Nobel Prize in chemistry.
    • The system consists of two key components:
    1. Cas9: This is the enzyme that acts like a pair of molecular scissors. It is responsible for cutting the DNA strand at a specific location, allowing for the removal, addition, or alteration of DNA at that site.
    2. Guide RNA (gRNA): This is a piece of RNA that is designed to find and bind to a specific sequence of DNA that matches its code. The gRNA guides the Cas9 enzyme to the exact spot in the genome where an edit is desired.
    • Mechanism:
      • The process begins with the design of a gRNA that matches the DNA sequence where an edit is needed.
      • Once inside the cell, the Cas9 enzyme and the gRNA form a complex that can identify and bind to the target DNA sequence.
      • The Cas9 then cuts the DNA at this location.
      • After the DNA is cut, the cell’s natural repair mechanisms can be harnessed to add or remove genetic material, or to make specific changes to the DNA.
    • Applications: Used for gene editing to correct genetic disorders, develop targeted cancer therapies, enhance diagnostics for infectious diseases, and create personalized medicine approaches.

    About the New TB Detection System

    • The system can detect TB bacteria using DNA from a patient’s saliva at a very low cost.
      • Specific DNA sequences unique to Mycobacterium tuberculosis (the bacteria causing TB) are identified.
    • It can identify the bacteria in preliminary stages and test over 1,500 samples simultaneously within approximately two hours.
    • The technology is simple enough to be used in primary health centres in villages.

    TB Situation in India:

    • TB kills an estimated 480,000 Indians annually, or over 1,400 patients every day.
    • India has more than a million ‘missing’ TB cases each year, which remain undiagnosed or inadequately diagnosed and treated in the private sector.

    National Goals for Elimination of TB: 

    • Pradhan Mantri TB Mukt Bharat Abhiyan (2022): It is stipulated to meet the goal of ending the TB epidemic by 2025 from the country, five years ahead of the Sustainable Development Goals (SDG) for 2030.
    • Nikshay Poshan Yojana (2018): Launched in 2018, this scheme provides nutritional support to TB patients. Under this scheme, TB patients receive a direct benefit transfer (DBT) of Rs. 500 per month to purchase food.

    PYQ:

    [2019] What is Cas9 Protein that is often mentioned in news?

    (a) A molecular scissors used in targeted gene editing

    (b) A biosensor used in the accurate detection of pathogens in patients

    (c) A gene that makes plants pest-resistant

    (d) A herbicidal substance synthesized in genetically modified crops

    [2014] Can overuse and free availability of antibiotics without Doctor’s prescription, be contributors to the emergence of drug-resistant diseases in India? What are the available mechanisms for monitoring and control? Critically discuss the various issues involved.

  • In news: Gandhi Sagar Sanctuary

    Why in the News?

    • The Gandhi Sagar sanctuary in Madhya Pradesh is the preferred location for the next batch of cheetah’s relocation plan.
      • However, Banni in the Rann of Kutch, Gujarat is also being prepared to house some of them.

    Cheetah Reintroduction in India:

    • In India, cheetahs disappeared in the early 1950s due to hunting and the loss of their habitat.
    • The ‘Action Plan for Reintroduction of Cheetah in India /Project Cheetah (2022)’ aims to bring cheetahs from African countries to various national parks.
    • It is spearheaded by the National Tiger Conservation Authority (NTCA).
    • Recently, cheetahs from Namibia were reintroduced in Kuno National Park, Madhya Pradesh.
    • Cheetah are listed as VULNERABLE by the IUCN; Schedule II of the Wild Life (Protection) Act, 1972.
    • Kuno NP and Gandhi Sagar has an ideal habitat parallel to Maasai Mara (a National Park) in Kenya, suitable for cheetahs.

    About Gandhi Sagar Wildlife Sanctuary

    • It is located in western Madhya Pradesh and covers an area of 368.62 sq km.
    • It is a flat rocky plateau characterized by shallow topsoil and exposed sheetrock.
    • It is divided by the Chambal River, with the Gandhi Sagar dam and reservoir within its boundaries.
    • Flora and Fauna:
      • Flora: The sanctuary features a savannah ecosystem with open grasslands interspersed with dry deciduous trees. Riverine valleys within the sanctuary support evergreen vegetation.
      • Fauna: The sanctuary is home to a diverse range of wildlife, including species like leopards, sloth bears, striped hyenas, grey wolves, golden jackals, jungle cats, Indian foxes, and marsh crocodiles.

    About Banni Grasslands:

    • The Banni Grassland is located in the Kutch district of Gujarat, covering around 3,847 square km.
    • The climate is arid and semi-arid, with extremely hot summers (temperatures above 45°C) and mild winters (12°C to 25°C), receiving 300-400 mm of annual rainfall mainly during the monsoon.
      • Flora: Grasses such as Dichanthium, Sporobolus, and Cenchrus species, with salt-tolerant plants, shrubs, and trees like Acacia and the invasive Prosopis juliflora.
      • Fauna: Indian wolf, hyena, chinkara, Great Indian Bustard, flamingos, and various raptors, reptiles, and invertebrates.
    • It is inhabited by pastoral communities like the Maldharis, who rely on livestock grazing (cattle, buffalo, and sheep) for their livelihood.
    • Agriculture is limited due to arid conditions, with some areas used for salt production.

    PYQ:

    [2024]  Consider the following statements:

    1. Lions do not have a particular breeding season.

    2. Unlike most other big cats, cheetahs do not roar.

    3. Unlike male lions, male leopards do not proclaim their territory by scent marking.

    Which of the statements given above are correct?

    (a) 1 and 2 only

    (b) 2 and 3 only

    (c) 1 and 3 only

    (d) 1, 2 and 3

    [2012]  Consider the following: (2012)

    1. Black-necked crane
    2. Cheetah
    3. Flying squirrel
    4. Snow leopard

    Which of the above are naturally found in India?

    (a) 1, 2 and 3 only
    (b) 1, 3 and 4 only
    (c) 2 and 4 only
    (d) 1, 2, 3 and 4

  • Key takeaways from the 2023-24 Economic Survey   

    Why in the News?

    The 2023-24 Economic Survey highlights realistic challenges for India’s growth, projecting GDP growth at 6.5%-7% for FY 2024-25 despite 8% growth in FY 2023-24.

    What are the major five issues with the Indian Economy?  

    • Weak Demand: In India, an unfavourable environment for FDI growth is due to high interest rates in developed countries, which increases the cost and opportunity cost of investment in India.
    • Dependence on China: Due to over-reliance on China for imports, particularly in key sectors like renewable energy, limits India’s manufacturing capabilities and increases vulnerability to geopolitical tensions.
    • Tepid Private Investment: Despite tax cuts aimed at stimulating capital formation, the corporate sector has not significantly increased investment, leading to a lack of job creation and economic dynamism.
    • Employment Challenges: The need to generate approximately 78.5 lakh jobs annually in the non-farm sector until 2030 to accommodate the growing workforce, coupled with insufficient data on job creation, complicates labour market analysis.
    • Infrastructure Deficiencies: Inadequate infrastructure, such as roads, railways, and sanitation, continues to hinder economic development and efficiency, requiring substantial investment and reform to improve productivity.

    What are the suggestions given in the Economic Survey? 

    • Private Sector’s Role in Job Creation: The corporate sector should take responsibility for creating jobs, as it is in their enlightened self-interest.
    • Embracing Healthy Lifestyle: Indian businesses should learn from India’s traditional lifestyle, food, and recipes to live healthily and in harmony with nature.
    • Focusing on Agriculture: The farm sector can generate higher value addition, boost farmers’ income, create opportunities for food processing and exports, and make the sector attractive to urban youth.
    • Removing Regulatory Bottlenecks: Licensing, inspection, and compliance requirements imposed by various levels of government are an onerous burden on businesses, especially MSMEs.
    • Improving Data Quality: The lack of availability of timely data on the absolute number of jobs created in various sectors precludes an objective analysis of the labour market situation.

    Way forward: 

    • Enhance Infrastructure Development: Need to prioritize investments in essential infrastructure such as roads, railways, and sanitation to boost economic efficiency and productivity.
    • Strengthen Data Collection and Analysis: The government should develop robust mechanisms for timely and accurate data collection on employment and other key economic indicators.

    Mains PYQ: 

    Q Do you agree with the view that steady GDP growth and low inflation have left the Indian economy in good shape? Give reasons in support of your arguments. (2019)

  • Defence funds decline, BRO gets backing 

    Why in the News?

    Union Finance Minister Nirmala Sitharaman has allocated ₹6.22 lakh crore for the Defence Ministry for 2024-25, matching the amount presented in the interim Budget in February.

    Budgetary allocation for different sectors 

    • Border Roads Organisation (BRO): The BRO received a significant increase in funding, with an allocation of ₹6,500 crore, aimed at improving border infrastructure and promoting socio-economic development in border areas.
    • Indian Coast Guard: The allocation for the Indian Coast Guard is ₹7,651.8 crore, which is 6% lower than the revised estimates for FY24. Of this, ₹3,500 crore is designated for capital expenditure to enhance maritime capabilities.
    • Innovation in Defence: An additional ₹400 crore has been allocated for innovation in defence through the Acing Development of Innovative Technologies with iDEX (ADITI) scheme, aimed at engaging startups and MSMEs in developing indigenous defence technologies.
    • Overall Allocation Breakdown: The allocation for the Defence Ministry includes 27.66% for capital expenditure, 14.82% for revenue expenditure, 30.66% for pay and allowances, 22.7% for defence pensions, and 4.17% for civil organizations under the Defence Ministry.

    Marginal Capex Push

    • Slight increase in capital expenditure: The budget reflects a marginal increase in capital expenditure, focusing on strengthening the capabilities of the armed forces and enhancing domestic procurement.
    • Strategic infrastructure development: The increased allocation to the BRO and the Coast Guard indicates a strategic push towards improving infrastructure in border areas and maritime security, though the overall capital push remains modest.
    • Focus on Indigenous solutions: The emphasis on domestic capital procurement and innovation through the iDEX scheme aims to bolster self-reliance in defence technology, fostering a more robust Indigenous defence industry.
    • Long-term strategic goals: The allocations are aligned with long-term strategic goals, including enhancing operational preparedness and infrastructure development in sensitive regions, although the overall growth in capital expenditure may be viewed as conservative.
    • Balancing defence needs with budget constraints: While the budget seeks to address critical defence needs, the slight reduction in the overall percentage of the budget allocated to defence suggests a balancing act between defence priorities and other pressing social and economic needs.

    Way forward: 

    • Enhance Focus on Indigenous Production: The government should further promote indigenous production capabilities by increasing investments in research and development, and by providing incentives for domestic manufacturers to produce advanced defence technologies.
    • Strengthen Infrastructure Development: The need for continued emphasis on infrastructure projects, particularly in border areas, should be prioritized to enhance national security and socio-economic development, ensuring that allocations are effectively utilized for maximum impact.

  • What is a Climate Finance Taxonomy, announced by FM Sitharaman?

    Why in the News?

    • The 2024 Union Budget, presented by Finance Minister, includes developing a taxonomy for climate finance.
      • The aim is to enhance the availability of capital for climate adaptation and mitigation.

    What is a Climate Finance Taxonomy?

    • A climate finance taxonomy is a classification system that identifies which economic activities can be marketed as sustainable investments.
    • It serves as a guide for investors and financial institutions to direct capital towards projects that contribute to climate adaptation and mitigation, aligning with broader environmental goals.

    Significance of a Climate Finance Taxonomy

    • Net-Zero Economy: With global temperatures rising and the adverse effects of climate change worsening, countries need to transition to a net-zero economy.
    • Alignment with Transition Pathways: Taxonomies help ascertain if economic activities are aligned with credible, science-based transition pathways.
    • Deployment of Climate Capital: They provide an impetus for the deployment of climate capital by directing investments towards sustainable projects.
    • Reduction of Greenwashing Risks: Taxonomies help reduce the risks of greenwashing by providing clear criteria for what constitutes a sustainable investment.

    Why does India need a Green Taxonomy?

    • According to the IFC, India needs an estimated $10.1 trillion to achieve net-zero by 2070.
    • Public investments alone can’t match this goal, calling for standardization in investments.

    Benefits for India

    • For India, a taxonomy could attract more climate funds from international sources.
    • Currently, green finance flows in India are falling short of the country’s needs, accounting for only around 3% of total FDI inflows, according to the Landscape of Green Finance in India 2022 report by the Climate Policy Initiative.
    • A lack of clarity on what constitutes sustainable activity is a significant reason for the low green finance flows. A taxonomy would address this issue.

    India’s Climate Commitments:

    • India aims to achieve a net-zero economy by 2070.
    • The country has pledged to reduce the emissions intensity of its GDP by 45% by 2030, compared to the 2005 level.
    • India has also committed to achieving about 50% of its cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030.

    Steps taken by India:

    • In January 2021, India established a task force on sustainable finance under the Department of Economic Affairs, Ministry of Finance.
      • The task force’s objectives include creating a framework for sustainable finance, establishing pillars for a sustainable finance roadmap, suggesting a draft taxonomy of sustainable activities, and creating a framework of risk assessment by the financial sector.
    • In April 2021, the RBI joined the Central Banks and Supervisors Network for Greening the Financial System (NGFS) as a member.
    • RBI is also a member of a task force on climate-related financial risks set up by the Basel Committee on Banking Supervision and the International Platform on Sustainable Finance.

    Potential for Green Investments in India

      • According to a report by the International Finance Corporation (IFC), India has a climate-smart investment potential of $3.1 trillion from 2018 to 2030.
      • The largest investment opportunity lies in the electric vehicle segment, with a potential of $667 billion as India aims to electrify all new vehicles by 2030.
    • The renewable energy sector also presents a substantial investment opportunity, estimated at $403.7 billion.

    International Adoption of Taxonomies

    • Many countries have either started developing or have finalized their taxonomies.
    • Countries with developed taxonomies include South Africa, Colombia, South Korea, Thailand, Singapore, Canada, and Mexico.
    • The European Union has also developed its own taxonomy.

    PYQ:

    [2016] With reference to the Agreement at the UNFCCC Meeting in Paris in 2015, which of the following statements is/are correct?

    1. The Agreement was signed by all the member countries of the UN, and it will go into effect in 2017.
    2. The Agreement aims to limit the greenhouse gas emissions so that the rise in average global temperature by the end of this century does not exceed 2ºC or even 1.5ºC above pre-industrial levels.
    3. Developed countries acknowledged their historical responsibility in global warming and committed to donate $ 1000 billion a year from 2020 to help developing countries to cope with climate change.

    Select the correct answer using the code given below:

    (a) 1 and 3 only
    (b) 2 only
    (c) 2 and 3 only
    (d) 1, 2 and 3