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  • OGMP and MARS : An innovative opportunity to reduce methane emissions

    opportunity

    Context

    • The Methane Alert and Response System (MARS) initiative was launched by the United Nations Environment Programme (UNEP) at the 27th Conference of Parties (COP27) to the United Nations Framework Convention on Climate Change on November 11, 2022. Is it right to say that India not joining the Oil & Gas Methane Partnership is a missed opportunity?

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    opportunity

    Methane a Toxic greenhouse gas

    • A major greenhouse gas: Methane is the second-most common of the six major greenhouse gases, but is far more dangerous than carbon dioxide in its potential to cause global warming.
    • One of major contributor of GHG emissions: Contribution Accounting for about 17 per cent of the current global greenhouse gas emissions.
    • One of the key reasons behind Temperature rise: Methane is blamed for having caused at least 25 to 30 per cent of temperature rise since the pre-industrial times.
    • Methane largely a Sectoral gas: Unlike carbon dioxide, methane is largely a sectoral gas, and there are only a few sources of emission.
    • Few sources large emissions of methane: The global warming potential of methane is about 80 times that of carbon dioxide. It accounts for a small portion of human-induced greenhouse gas emissions compared to carbon dioxide.

    Did you know? Global Methane pledge

    • The global methane pledge was adopted during COP26.
    • Under it, countries agreed to reduce global methane emissions by 30 per cent by 2030.
    • This will help to limit global warming to 1.5 degrees above pre-industrial levels.
    • into the right hands for emissions mitigation.

    opportunity

    What is Oil and Gas Methane Partnership (OGMP)?

    • A methodology to help companies reduce methane emissions: The Oil and Gas Methane Partnership (OGMP) methodology was created by the Climate and Clean Air Coalition in 2014 as a voluntary initiative to help companies reduce methane emissions in the oil and gas sector.
    • The Oil & Gas Methane Partnership 2.0: OGMP 2.0 is a multi-stakeholder initiative launched by UNEP and the Climate and Clean Air Coalition. The OGMP 2.0 is the only comprehensive, measurement-based reporting framework for the oil and gas industry that improves the accuracy and transparency of methane emissions reporting in the oil and gas sector.
    • Companies joined the partnership: Over 80 companies with assets on five continents, representing a significant share of of the world’s oil and gas production, have joined the Partnership. OGMP 2.0 members also include operators of natural gas transmission and distribution pipelines, gas storage capacity and LNG terminals. The members constitute around 35 per cent of the total global oil and gas production and two-thirds of the total liquefied natural gas flows around the world

    opportunity

    What is Methane Alert and Response System (MARS)?

    • MARS is a part of global efforts to slow climate change by tracking the global warming gas.
    • The system will be the first publicly available global system to connect methane detection to notification processes transparently.
    • The data-to-action platform was set up as part of the UN Environment Programme’s (UNEP) International Methane Emissions Observatory (IMEO) strategy to get policy-relevant data

    How many countries and companies are engaged with the MARS initiative and is India involved?

    • The system was requested by the United States and the European Union but it is in the service of the entire world.
    • There are no Indian companies that have joined the OGMP.

    Conclusion

    • MARS is a satellite-based system to help industries and governments detect and reduce methane emissions. This will help UNEP confirm methane emissions reported by companies and analyze changes over time. India should consider this as an opportunity to cooperate in reducing methane emissions

    Mains question

    Q. Methane is 25 times more potent as a greenhouse gas than carbon dioxide and currently contributes about a quarter of global warming. In light of this, what does it mean to engage with the OGMP and MARS system?

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  • Economic inequality and the relationship between state, citizens and taxation

    inequality

    Context

    • Economic inequality in India impacts every aspect of our everyday lives, despite the country being a welfare state. As we celebrate 75 years of Independence, the poor citizens of India continue to face increased fiscal burden in the form of inflation and higher taxes, with fewer benefits.

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     “No taxation without representation”

    • This slogan played a crucial role in the freedom movements of India and the United States.
    • The statement indicates the relationship between the state, citizens and taxation.

    inequality

    Analysis: Relationship between the state, citizens and taxation

    • A concept of welfare state: The legitimacy of taxation is derived from the welfare done by the government.
    • Government’s role: The Constitution of India envisaged the state’s role as a welfare one. For that, the government is empowered to administer taxes and their transfer.
    • However, in the year of Azadi ka Amrit Mahotsav, ‘transfers’ are being painted as revadi (freebies) and the lives of poor citizens are being burdened by regressive “taxes”
    • Inflation as a hidden tax: Inflation acts as a hidden tax on poor and middle-class citizens. For instance, at the time of the introduction of the central scheme Pradhan Mantri Kisan Samman Nidhi or PM-KISAN, which gave Rs 6,000 cash benefit to farmers, diesel cost Rs 65 per litre. Thus, fuel inflation devours the cash benefit of this scheme
    • Highway taxation in contrast with the idea of a welfare state: The roadways are meant to be available free of cost, being public goods. However, Privatisation and PPP models, such services now demand a fee. In the financial year 2021-2022, the government mopped up Rs 35,000 crore as toll tax. The same is projected to reach Rs 1.34 lakh cr by 2025.
    • The diversion of funds meant for one to other sectors is an implicit fiscal burden: The road cess that was intended to fund the construction of roads is diverted to other projects, while citizens are charged heavy tolls for the roads, adding up to already toll burdened people.
    • The case of municipal tax and user charges: When citizens pay municipal tax, the municipality is supposed to ensure cleanliness and sanitation facilities. But the Ahmedabad Municipal Corporation (AMC) introduced a “User Charge” of Rs 365 per household to make the city clean, which is 15% of the municipal tax amount.
    • Discriminatory practices of the administration: Flawed administrative rules also impose fiscal costs on the poor and middle classes of society. Administration allows cars to be parked on the road with impunity, but if two-wheelers are parked on the road, they get towed.

    inequality

    Criticism: Discriminatory treatment to rich and poor in the name of welfare state

    • Monetisation of public spaces weakens state- citizen relationship: It is said when people take ownership and responsibility of public spaces, people become citizens. It ought to be remembered that monetisation of public spaces portends to weaken the state-citizen relationship.
    • The nomenclature of government language itself reflects discriminatory approach: When governments provide fiscal help to the poor, it is called revadi, but the same offered to the rich is lucratively termed “incentive”.
    • Subsidised food is advertised while incentives provided to corporates are not well known: Posters for subsidised food to the poor are ubiquitous across India, but no public posters are screaming about the Rs 1.97 lakh crore “incentive” given to the corporate sector under 13 production linked incentive schemes.
    • Flawed mechanism of personal details in the name of transparency: In the name of transparency, the government uploads the personal details of each Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) worker on its website; but the same government does not disclose the names of willful bank defaulters to uphold those ideals of privacy.

    inequality

    Conclusion

    • 73% of the wealth generated in India in 2017 went to the richest 1%, while the poorest half of the population saw only a 1% increase in their wealth. When we celebrate the Azadi Ka Amrit Mahotsav, the need of the hour is to focus must be to make India economically equal and prosperous.

    Mains question

    Q. As we celebrate 75 years of Independence, the poor citizens of India continue to face increased fiscal burden in the form of inflation and higher taxes, with fewer benefits. Critically examine.

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  • 20th Dec 2022 | Prelims Daily with Previous Year Questions

    20th Dec 2022 | Prelims Daily with Previous Year Questions

    [WpProQuiz 1192]

    [WpProQuiz_toplist 1192]

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  • [Burning Issue] Skirmishes at the Line Of Actual Control

    line

    Context

    • Three months after the last round of troop disengagement in eastern Ladakh signaling restoration of peace, soldiers from India and China clashed once again, this time in Arunachal Pradesh.
    • This was contested by Indian troops firmly and resolutely. This face-off led to minor injuries to a few personnel from both sides.
    • In this context, this edition of the burning issue will analyze the LAC standoffs between India and China.

    Line of Actual Control Crisis- The Tawang Episode

    • Soldiers of the two sides clashed in Yangtse, in the upper reaches of the Tawang sector in Arunachal Pradesh on December 9, 2022.
    • PLA troops tried to transgress the LAC in Yangtse area of the Tawang Sector and unilaterally change the status quo.
    • Within Tawang, there are three “agreed areas” of differing Indian and Chinese perceptions of the LAC. Yangtse, which is about 25 km from Tawang town, north of the Lungroo grazing ground, is one of these areas.
    • As a result, it has been the site of regular “physical contact” between the Indian Army and the PLA, especially as the high ground is on the Indian side, giving it a commanding view of the Chinese side.
    • Both sides immediately disengaged from the area. As a follow-up to the incident, the Indian Army commander in the area held a flag meeting with his counterpart to discuss the issue in accordance with structured mechanisms to restore peace and tranquillity.

    Some previous LAC crisis incidents

    • Depsang in Ladakh, 2013: Chinese troops came across the LAC, pitched tents and refused to move for several weeks until New Delhi threatened to cancel the planned visit of Premier Li Keqiang to India. This might have been a diplomatic victory for the Indian government but it also highlighted the inability of the Indian military to bring an end to the standoff or the unwillingness of the government to let the military take the lead in responding.
    • Chumar in Ladakh, Sept 2014 in the middle of Xi Jinping’s first visit to India: Chinese intruded at Chumar, also in Ladakh, in the middle of Chinese President Xi Jinping’s first state visit to India. This was in keeping with a reasonably long tradition of Chinese transgressions during important visits but it was also notable for confronting Indian troops in an area where they enjoyed a degree of military advantage.
    • Doklam in 2017: China provoked India with infrastructure development in a third country in Bhutan’s Doklam territory. This was a case of China trying to browbeat an Indian treaty ally.
    • Transgression across multiple locations in 2020 and Galwan valley clash: The Chinese PLA took advantage of Covid-19 and a lack of Indian military alertness to transgress across multiple locations on the LAC in eastern Ladakh. On June 15, 2020 episode when 20 Indian soldiers were killed and several others were injured in violent clashes with the PLA troops in Ladakh’s Galwan Valley.

    Reasons for these skirmishes

    • Enforce own perception of LAC: The transgressions, patrol clashes, faceoffs and flag meetings to resolve it has been a common feature to dominate or enforce own claim or own perception of LAC China and will continue to be so till the LAC is demarcated.
    • Difficult terrain: Rivers, lakes and snowcaps along the frontier mean the line can shift, bringing soldiers face to face at many points, sparking a confrontation.
    • Competition to build infrastructure: The two nations are also competing to build infrastructure along the border, which is also known as the Line of Actual Control. India’s construction of a new road to a high-altitude air base is seen as one of the main triggers for a deadly 2020 clash with Chinese troops.
    • Promote nationalism and divert attention: Chinese President Xi Jinping may be attempting to stoke nationalistic fervor out of his aggressive nationalistic stance by playing the victim card to divert domestic discontent due to the Zero Covid policy, downslide in the Chinese economy and other reasons.
    • Increase financial cost for India: Unhappy with the fastest-growing economy, a faceoff in winter may activate political debate in democratic India, and the Indian government may be compelled to deploy more troops throughout winters in all sectors, thereby increasing the financial cost for India by LOCisation of LAC.
    • India’s infrastructure development: China enjoyed gross asymmetry in infrastructure development in its favour for too long and is not comfortable with Indian effort to catch up in this regard; hence disruption in development activities along borders suits its design.

    Other concerns in India-China Relation

    • Belt Road Initiative: India has objected to this, since its inception on grounds of violating its sovereignty pointing to China Pakistan Economic Corridor.
    • Non-reciprocal steps by China: India’s support to China on global issues has not led to Beijing’s reciprocation for instance. China opposed India’s permanent membership to UN Security Council and entry into NSG.
    • High trade deficit: India faces a trade imbalance heavily in favor of China. In 2017-18, the trade deficit has gone wide to US$62.9 billion in China’s favor.
    • Countering each other: China has expressed concerns about Indian military and economic activities in the disputed South China Sea. The same way India is also concerned about rising Chinese activities in the Indian Ocean.
    • China’s strong strategic bilateral relations with Pakistan and other neighboring countries like Nepal and Myanmar are the cause of concern as these countries act as buffer states.

    Possible solutions to LAC standoffs

    • Be ready for all contingencies: With no de-escalation by the Chinese in sight, India should continue to be ready for all contingencies with similar deployment along LAC, in the coming months/years, including creating some more leverage, if the situation demands so.
    • Prevent LOC-isation of LAC: The Indian aim should be not to concede Chinese attempt to redraw LAC, or LOC-isation of the LAC further.
    • Be proactive in dealing with China: A change in mindset is required, from being reactive to being proactive with additional intelligence, surveillance and offensive capability to demonstrate the capacity to encroach into Chinese sensitive areas, in absence of which China has assumed no threat from India, with the freedom to encroach anywhere, at will.
    • Pass a border defense law similar to China: If the Chinese have passed a Border Defence Law, India too should pass some laws to facilitate emphatic border construction and extend schemes under the Border Infrastructure Management Authority (BIMA) as near as the LAC as is practically feasible.
    • Capacity building: India must continue capacity building in all domains, including the maritime domain, where Chinese vulnerable sea lines of communications can be threatened. Besides ongoing infrastructure development along borders, the scope of the Border Area Management Programme (BAMP) needs to be enhanced.

    What are the options for India to learn from the past and see what lies ahead in India-China relations?

    • Inevitable Race: The prevailing tension on the China-India border is a symptom of the broader strategic competition between the two Asian neighbors.
    • Equal seriousness: Both sides should treat the military escalation along LAC with equal seriousness.
    • Armed coexistence: Even after the resolution of the present standoff in eastern Ladakh, both sides may be in a prolonged period of armed coexistence as a new normal. As the forces on both sides are likely to be relatively balanced, it would be advantageous for both to return to the agreements and understandings from 1993 onward and improve upon them. Clarifying the LAC is a crucial step in this effort.
    • Address trade imbalance: India has flagged the unsustainable trade imbalance at the front and center of the relationship, and this has gone unaddressed. China will need to work on resolving the trade deficit with India. At any rate, decoupling will happen selectively, in the same way, and for the same reasons that China is choosing to decouple from the United States. A balanced trade and economic relationship might lay a solid foundation for future relations, given the size of both economies.
    • Dialogue is necessary: Better understanding of each other’s regional initiatives through open dialogue is important to build trust. The Indo-Pacific vision is as much a developmental necessity for India as the BRI may be to China. Part of building trust must be an open discussion on each other’s intentions in key regions South Asia and the northern Indian Ocean and East Asia and the western Pacific as well as respect for each other’s special positions in the western Pacific and northern Indian Oceans.
    • Protect the core interest: The two sides would need to accommodate the legitimate interests of the other side on key partnerships: China’s with Pakistan and India’s with the United States. These may not be desirable, but in the current circumstances neither will give up its partners, and both India and China could talk through a modus vivendi on the red lines of concern.

    EAM S. Jaishankar’s Suggestion to deal with China

    • The External Affairs Minister suggested “Three Mutuals” and “Eight Broad Propositions” as a way forward for the relationship.
    • Three mutuals
    • Mutual Respect and Mutual Sensitivity to each other concerns and Mutual Interests to cooperate are the “determining factors” for India-China relations to grow.
    • Eight Major propositions
    • Adhering to commitment: The first proposition was that agreements already reached must be adhered to in their entirety, both in letter and in spirit.
    • Respect for LAC: Both sides also needed to strictly observe and respect the LAC, and any attempt to unilaterally change the status quo was completely unacceptable.
    • Maintaining peace and tranquillity: Peace and tranquillity in border areas were the basis for the development of the relationship in other domains. If that was disturbed, he said, the rest of the relationship would be too.
    • Broader partnership: The fourth proposition was that while both remain committed to a multipolar world, they should recognize that a multipolar Asia was one of its essential constituents.
    • Reciprocity: While each state had its interests, concerns and priorities, sensitivities to them could not be one-sided and relations were reciprocal. As rising powers, neither should ignore the other’s set of aspirations.
    • Divergences management: While both sides had made a common cause on development and economic issues and common membership of plurilateral groups was a meeting point, there were divergences when it came to interests and aspirations.
    • Civilizational ties: The last proposition was that as civilizational states, India and China must always take the long view.
    • Cooperation and competition: Even before the events of 2020, the relationship had reflected a duality of cooperation and competition.

    Conclusion

    • The two countries are standing at a crossroads, and this might be the final chance to take the path to the coexistence of cooperation and competition. If not, a new phase of antagonistic rivalry may be starting, with the countries sliding into possible confrontation as the strategic periphery of China collides with the strategic backyard of India in the Indian Ocean region.
    • Therefore, China and India should be “Good Neighbors, Good Friends,” as both countries are “important engines of the world economic growth.” By building on that theme, the two countries should “enhance dovetailing of the two countries’ development strategies” to build a “manufacturing partnership.”

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  • What are Carbon Markets and how do they operate? 

    carbon

    The Parliament passed the Energy Conservation (Amendment) Bill, 2022. It amends the Energy Conservation Act, 2001, to empower the Government to establish carbon markets in India and specify a carbon credit trading scheme.

    A quick recap

    • In order to keep global warming within 2°C, ideally no more than 1.5°C, global greenhouse gas (GHG) emissions need to be reduced by 25 to 50% over this decade.
    • Nearly 170 countries have submitted their nationally determined contributions (NDCs) so far as part of the 2015 Paris Agreement, which they have agreed to update every five years.
    • NDCs are climate commitments by countries setting targets to achieve net-zero emissions.
    • India, for instance, is working on a long-term roadmap to achieve its target of net zero emissions by 2070.

    What are Carbon Markets?

    • In order to meet NDCs, one mitigation strategy is becoming popular with several countries— carbon markets.
    • Article 6 of the Paris Agreement provides for the use of international carbon markets by countries to fulfil their NDCs.
    • Carbon markets are essentially a tool for putting a price on carbon emissions— they establish trading systems where carbon credits or allowances can be bought and sold.
    • A carbon credit is a kind of tradable permit that, per United Nations standards, equals one tonne of carbon dioxide removed, reduced, or sequestered from the atmosphere.
    • Carbon allowances or caps, meanwhile, are determined by countries or governments according to their emission reduction targets.

    Popularity of the carbon markets

    • A UN Development Program release this year noted that interest in carbon markets is growing globally.
    • Almost 83% of NDCs submitted by countries mention their intent to make use of international market mechanisms to reduce greenhouse gas emissions.

    What are the types of carbon markets?

    There are broadly two types of carbon markets that exist today— compliance markets and voluntary markets.

    (A) Voluntary Markets

    • They are those in which emitters— corporations, private individuals, and others— buy carbon credits to offset the emission of one tonne of CO 2 or equivalent greenhouse gases.
    • Such carbon credits are created by activities which reduce CO 2 from the air, such as afforestation. In a voluntary market, a corporation looking to compensate for its unavoidable GHG emissions purchases carbon credits from an entity engaged in projects that reduce, remove, capture, or avoid emissions.
    • For Instance, in the aviation sector, airlines may purchase carbon credits to offset the carbon footprints of the flights they operate.
    • In voluntary markets, credits are verified by private firms as per popular standards.
    • There are also traders and online registries where climate projects are listed and certified credits can be bought.

    (B) Compliance Market

    • Compliance markets— set up by policies at the national, regional, and/or international level— are officially regulated.
    • Today, compliance markets mostly operate under a principle called ‘cap-and-trade”, most popular in the European Union (EU).

    Successful example of Carbon Market: EU’s emissions trading system (ETS)

    • Under the EU’s ETS launched in 2005, member countries set a cap or limit for emissions in different sectors, such as power, oil, manufacturing, agriculture, and waste management.
    • This cap is determined as per the climate targets of countries and is lowered successively to reduce emissions.
    • Entities in this sector are issued annual allowances or permits by governments equal to the emissions they can generate.
    • If companies produce emissions beyond the capped amount, they have to purchase additional permit, either through official auctions or from companies.
    • This makes up the ‘trade’ part of cap-and-trade.

    How is carbon price determined?

    • The market price of carbon gets determined by market forces when purchasers and sellers trade in emissions allowances.
    • Notably, companies can also save up excess permits to use later.
    • Through this kind of carbon trading, companies can decide if it is more cost-efficient to employ clean energy technologies or to purchase additional allowances.
    • These markets may promote the reduction of energy use and encourage the shift to cleaner fuels.

    Other such examples

    • China launched the world’s largest ETS in 2021, estimated to cover around one-seventh of the global carbon emissions from the burning of fossil fuels.
    • Markets also operate or are under development in North America, Australia, Japan, South Korea, Switzerland, and New Zealand.

    Significance of Carbon Market

    • The World Bank estimates that trading in carbon credits could reduce the cost of implementing NDCs by more than half — by as much as $250 billion by 2030.
    • Last year, the value of global markets for tradable carbon allowances or permits grew by 164% to a record 760 billion euros ($851 billion).
    • The EU’s ETS contributed the most to this increase, accounting for 90% of the global value at 683 billion euros.
    • As for voluntary carbon markets, their current global value is comparatively smaller at $2 billion.

    What is the progress at UN?

    • The UN international carbon market envisioned in Article 6 of the Paris Agreement is yet to kick off as multilateral discussions are still underway about how the inter-country carbon market will function.
    • Under the proposed market, countries would be able to offset their emissions by buying credits generated by greenhouse gas-reducing projects in other countries.
    • In the past, developing countries, particularly India, China and Brazil, gained significantly from a similar carbon market under the Clean Development Mechanism (CDM) of the Kyoto Protocol, 1997.
    • India registered 1,703 projects under the CDM which is the second highest in the world.
    • But with the 2015 Paris Agreement, the global scenario changed as even developing countries had to set emission reduction targets.

    India’s efforts

    The new Bill empowers the Centre to specify a carbon credits trading scheme.

    • Issuance of credit certificates: Under the Bill, the central government or an authorised agency will issue carbon credit certificates to companies or even individuals registered and compliant with the scheme.
    • Tradable carbon credits: These carbon credit certificates will be tradeable in nature. Other persons would be able to buy carbon credit certificates on a voluntary basis.

    Existing mechanisms

    • Notably, two types of tradeable certificates are already issued in India-
    1. Renewable Energy Certificates (RECs) and
    2. Energy Savings Certificates (ESCs)
    • These are issued when companies use renewable energy or save energy, which are also activities which reduce carbon emissions.

    Lacunas of the bill

    • No clear mechanism: The Bill does not provide clarity on the mechanism to be used for the trading of carbon credit certificates— whether it will be like the cap-and-trade schemes or use another method— and who will regulate such trading.
    • Confusion over nodal agency: The right ministry to bring in a scheme of this nature, pointing out that while carbon market schemes in other jurisdictions like the US, UK are framed by their environment ministries, the Indian Bill was tabled by the power ministry instead of the MoEFCC.
    • Ambiguity over existing certificates: The Bill does not specify whether certificates under already existing schemes would also be interchangeable with carbon credit certificates and tradeable for reducing carbon emissions.
    • Overlapping: The question, thus, is whether all these certificates could be exchanged with each other. There are concerns about whether overlapping schemes may dilute the overall impact of carbon trading.

    Challenges to carbon markets

    • Double counting: of greenhouse gas reductions
    • Quality and authenticity: These parameters of climate projects that generate credits to poor market transparency
    • Greenwashing: Companies may buy credits, simply offsetting carbon footprints instead of reducing their overall emissions or investing in clean technologies.
    • Inefficiency: The IMF points out that including high emission-generating sectors under trading schemes to offset their emissions by buying allowances may immensely increase emissions on net.

    Way forward

    • Alignment with NDCs: The UNDP emphasizes that for carbon markets to be successful, emission reductions and removals must be real and aligned with the country’s NDCs.
    • Transparent financing: It says that there must be “transparency in the institutional and financial infrastructure for carbon market transactions”.

     

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  • Global Minimum Tax on big businesses

    tax

    Members of the EU last week agreed in principle to implement a global minimum tax of 15% on big businesses.

    Global Minimum Corporate Tax

    • Major economies are aiming to discourage multinational companies from shifting profits – and tax revenues – to low-tax countries regardless of where their sales are made.
    • Increasingly, income from intangible sources such as drug patents, software, and royalties on intellectual property has migrated to these jurisdictions.
    • This has allowed companies to avoid paying higher taxes in their traditional home countries.

    What is the recent EU agreement?

    • EU members have agreed to implement a minimum tax rate of 15% on big businesses in accordance with Pillar 2 of the global tax agreement framed by the OECD last year.
    • Under the OECD’s plan, governments will be equipped to impose additional taxes in case companies are found to be paying taxes that are considered too low.
    • This is to ensure that big businesses with global operations do not benefit by domiciling themselves in tax havens in order to save on taxes.

    Need for a global minimum tax

    • Corporate tax rates across the world have been dropping over the last few decades as a result of competition between governments to spur economic growth through greater private investments.
    • Large multinational companies have traditionally paid taxes in their home countries even though they did most of their business in foreign countries.
    • The OECD plan tries to give more taxing rights to the governments of countries where large businesses conduct a substantial amount of their business.
    • As a result, large US tech companies may have to pay more taxes to the governments of developing countries.

    History of such taxes

    • Global corporate tax rates have fallen from over 40% in the 1980s to under 25% in 2020.
    • The global tax competition was kick-started by former US President Ronald Reagan and former British PM Margaret Thatcher in the 1980s.
    • The OECD’s tax plan tries to put an end to this “race to the bottom” which has made it harder for governments to shore up the revenues required to fund their rising spending budgets.
    • The minimum tax proposal is particularly relevant at a time when the fiscal state of governments across the world has deteriorated as seen in the worsening of public debt metrics.

    Response to the EU move

    • Some governments, particularly those of traditional tax havens, are likely to disagree and stall the implementation of the OECD’s tax plan.
    • High tax jurisdictions like the EU are more likely to fully adopt the minimum tax plan as it saves them from having to compete against low tax jurisdictions.
    • Low tax jurisdictions, on the other hand, are likely to resist the OECD’s plan unless they are compensated sufficiently in other ways.

    Way forward

    • Supporters of the OECD’s tax plan believe that it will end the global “race to the bottom” and help governments collect the revenues required for social spending.
    • The plan will also help counter rising global inequality by making it tougher for large businesses to pay low taxes by availing the services of tax havens.
    • Critics of the OECD’s proposal, however, see the global minimum tax as a threat.
    • They argue that without tax competition between governments, the world would be taxed a lot more than it is today, thus adversely affecting global economic growth.
    • In other words, these critics believe that it is the threat of tax competition that keeps a check on governments that would otherwise tax their citizens heavily to fund profligate spending programs.

     

     

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  • Historic biodiversity deal gets the nod at COP15 summit in Canada

    biodiversity

    Negotiators reached a historic deal at a UN Convention on Biological Diversity (CBD) conference that would represent the most significant effort to protect the world’s lands and oceans and provide critical financing to save biodiversity in the developing world.

    Key outcomes

    [A] 30×30 Deal

    • Delegates committed to protecting 30% of land and 30% of coastal and marine areas by 2030, fulfilling the deal’s highest-profile goal, known as 30-by-30.
    • Currently, 17% of terrestrial and 10% of marine areas are protected.
    • Indigenous and traditional territories will also count toward this goal, as many countries and campaigners pushed for during the talks.
    • The deal also aspires to restore 30% of degraded lands and waters throughout the decade, up from an earlier aim of 20%.
    • And the world will strive to prevent destroying intact landscapes and areas with a lot of species, bringing those losses “close to zero by 2030”.

    [B] Money for nature

    • Signatories aim to ensure $200 billion per year is channeled to conservation initiatives, from public and private sources.
    • Wealthier countries should contribute at least $20 billion of this every year by 2025, and at least $30 billion a year by 2030.
    • This appeared to be the Democratic Republic of Congo’s main source of objection to the package.

    [C] Big companies report impacts on biodiversity

    • Companies should analyse and report how their operations affect and are affected by biodiversity issues.
    • The parties agreed to large companies and financial institutions being subject to “requirements” to make disclosures regarding their operations, supply chains and portfolios.
    • This reporting is intended to progressively promote biodiversity, reduce the risks posed to business by the natural world, and encourage sustainable production.

    [D] Harmful subsidies

    • Countries committed to identify subsidies that deplete biodiversity by 2025, and then eliminate, phase out or reform them.
    • They agreed to slash those incentives by at least $500 billion a year by 2030, and increase incentives that are positive for conservation.

    [E] Pollution and pesticides

    • One of the deal’s more controversial targets sought to reduce the use of pesticides by up to two-thirds.
    • But the final language to emerge focuses on the risks associated with pesticides and highly hazardous chemicals instead, pledging to reduce those threats by “at least half”, and instead focusing on other forms of pest management.
    • Overall, the Kunming-Montreal agreement will focus on reducing the negative impacts of pollution to levels that are not considered harmful to nature, but the text provides no quantifiable target here.

    [F] Monitoring and reporting progress

    • All the agreed aims will be supported by processes to monitor progress in the future, in a bid to prevent this agreement meeting the same fate as similar targets that were agreed in Aichi, Japan, in 2010, and never met.
    • National action plans will be set and reviewed, following a similar format used for greenhouse gas emissions under U.N.-led efforts to curb climate change.
    • Some observers objected to the lack of a deadline for countries to submit these plans.

    Back2Basics: Convention on Biological Diversity (CBD)

    • The CBD (wef 1993) known informally as the Biodiversity Convention, is a multilateral treaty.
    • The convention has three main goals:
    1. the conservation of biodiversity
    2. the sustainable use of its components
    3. the fair and equitable sharing of benefits arising from genetic resources
    • Its objective is to develop national strategies for the conservation and sustainable use of biological diversity, and it is often seen as the key document regarding sustainable development.
    • It has two supplementary agreements, the Cartagena Protocol and Nagoya Protocol.

    (1) Cartagena Protocol

    • It is an international treaty governing the movements of living modified organisms (LMOs) resulting from modern biotechnology from one country to another.

    (2) Nagoya Protocol

    • It deals with Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization (ABS).

     

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  • In news: Bihar Hooch Tragedy and Alcohol Ban

    alcohol

    The official death toll from the latest hooch tragedy in “dry” Bihar has mounted to 38. Bihar has completely prohibited alcohol.

    Alcohol Ban in India

    • India has a long history of banning alcohol, with prohibition a part of the Directive Principles of State Policy in the Constitution and also among the key Gandhian principles.
    • Gandhi wrote, “Alcohol makes a man forget himself and while its effects last, he becomes utterly incapable of doing anything useful. Those who take to drinking, ruin themselves and ruin their people.”

    How the Indian constitution views alcohol?

    • One of the DPSP mentions that “in particular, the State shall endeavour to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health.”
    • While DPSPs are not in themselves legally enforceable, they set goals that the state should aspire towards to establish conditions under which citizens can lead a good life.
    • According to the Seventh Schedule, alcohol is a state subject, i.e. state legislatures have the right and responsibility to draft laws regarding it.
    • This includes “the production, manufacture, possession, transport, purchase and sale of intoxicating liquors.
    • Thus, laws regarding alcohol differ from state to state, falling in the whole spectrum between prohibition and private sale.

    Why do all states not have prohibition?

    Ans. Huge Liquor Revenues

    • While the Constitution sets prohibition on alcohol as a goal, for most states, it is very difficult to declare a ban on alcohol.
    • This is primarily because liquor revenues are not easy to ignore and have consistently contributed a large share of state governments’ revenue.
    • For instance, in Maharashtra, state liquor revenues amounted to Rs 11,000 crore in April 2020 (during the nationwide Covid lockdown), compared with Rs 17,000 crore in March.
    • The state government attributed much of this drop to the closure of liquor stores, later categorising them as an essential service, in part due to the industry’s contribution to tax revenues.
    • The day liquor stores were reopened, the Maharashtra government collected Rs 11 crore revenue from liquor sales in a single day.

    States with complete ban

    • All states have some regulations with regards to alcohol consumption and sale (like age requirements or dry days).
    • Currently, there are five states with total prohibition and some more with partial prohibition:

    (1) Bihar

    • Both the sale and prohibition of liquor was completely banned by the Nitish Kumar government back in 2016, in keeping with a promise made to the women of Bihar ahead of the Assembly polls.
    • Severe punishments were imposed on those found to be flouting the ban, including heavy fines and prison sentences.
    • Earlier this year, the Bihar government passed an amendment to its prohibition laws, which dials down on punishment to first-time “drinkers” and lets them get away with a fine rather than face arrest.
    • This was done to unclog Bihar’s already overcrowded jails and focus the government’s attention on sellers and distributors rather than consumers of liquor.

    (2) Gujarat

    • Gujarat has had prohibition since it came into existence as a state in 1960.
    • In the 62 years since prohibition has been around in Gujarat, the Act has seen several amendments.
    • Notably, in 2009, then CM introduced the death penalty for sellers/producers if their spurious alcohol caused deaths.
    • However, Gujarat has provisions for special alcohol licences for hospitality establishments as well as individuals.

    (3) Lakshadweep

    • The Union Territory bans both the consumption and sale of alcohol keeping in mind the culture and sentiments of its predominantly Muslim population.
    • However, the island of Bangram has a resort with a bar which is allowed to legally serve liquor.

    (4) Mizoram

    • In 2019, Mizoram became a “dry state” once again after the new government reintroduced prohibition that was repealed in 2015.
    • Previously, Mizoram had seen prohibition for 18 years.
    • The Mizo National Front (MNF) government had prohibition as one of its most important pre-poll promises.
    • Here, the loss of revenue is much less than the loss of human life and suffering. Larger societal benefit is considered more vital.
    • Only military personnel and those with “medical needs” are allowed to consume alcohol.

    (5) Nagaland

    • Nagaland introduced total prohibition in 1989 due to “moral and social” reasons, for the greater good of its citizens.
    • However, in recent times, the Naga government has mulled partially lifting prohibition due to various reasons.

    Partial prohibitions in some states

    • Some states with partial prohibition are Karnataka, which specifically banned country-made arrack in 2007.
    • In Maharashtra, the districts of Wardha and Gadhricholi have banned on production and sale of liquor.
    • In Manipur, districts of Bishnupur, Imphal East, Imphal West and Thoubal have prohibition.
    • In 2014, then CM Oomen Chandy announced that Kerala would implement prohibition in a phased manner.
    • However, the state has since gone back on this promise.

    Reason behind Bihar tragedy: Alcohol Ban

    • Critics have claimed that one of the reasons behind the tragedy is the state’s prohibition policy.
    • An official ban on alcohol leads to a thriving underground economy where such spurious alcohol is produced and sold.

    Does prohibition really work?

    • Creates no deterrence: There is evidence to show that, prohibition creates opportunities for a thriving underground economy that distributes liquor, outside the regulatory framework of the state.
    • Rise of mafias: This creates its own problems, from strengthening organized crime groups (or mafias) to the distribution of spurious liquor.
    • No evidence of progress: In the case of Bihar, a year after prohibition was enforced, there was a spike in substance abuse.
    • Anti-poor: In the case of Bihar, a majority of cases registered under its prohibition laws are on the less privileged.

    Limited benefits

    • Prevented crime against women: Various studies have provided evidence linking alcohol with domestic abuse or domestic violence. In India, prohibition has often been framed as a “women’s rights” issue.
    • Prevented domestic violence: Prohibition might have some limited benefits as well. Various studies have provided evidence linking alcohol with domestic abuse or domestic violence.

     

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  • In news: Goa Liberation Day

    goa

    The President of India tweeted her greetings to the nation on December 19, marking Goa Liberation Day, which is celebrated annually to mark the success of ‘Operation Vijay’ undertaken by the Indian armed forces to defeat Portuguese colonial forces and liberate Goa in 1961.

    What is the news?

    • Goa was liberated 15 years after India attained freedom.
    • Last year PM Modi accused Nehru as guilty of leaving satyagrahis in the dismay, refusing to send the Indian Army to liberate Goa, even after 25 of them were shot dead by the Portuguese Army.

    Goa’s Colonization: A backgrounder

    • Goa became a Portuguese colony in 1510, when Admiral Afonso de Albuquerque defeated the forces of the sultan of Bjiapur, Yusuf Adil Shah.
    • The next four and a half centuries saw one of Asia’s longest colonial encounters — Goa found itself at the intersection of competing regional and global powers.
    • It received a religious and cultural ferment that lead eventually to the germination of a distinct Goan identity that continues to be a source of contestation even today.
    • By the turn of the twentieth century, Goa had started to witness an upsurge of nationalist sentiment opposed to Portugal’s colonial rule, in sync with the anti-British nationalist movement.

    Beginning of freedom movement

    • Tristao de Braganza Cunha, celebrated as the father of Goan nationalism, founded the Goa National Congress at the Calcutta session of the Indian National Congress in 1928.
    • In 1946, the socialist leader Ram Manohar Lohia led a historic rally in Goa that gave a call for civil liberties and freedom, and eventual integration with India.
    • This event became a watershed moment in Goa’s freedom struggle.
    • At the same time, there was a thinking that civil liberties could not be won by peaceful methods, and a more aggressive armed struggle was needed.
    • This was the view of the Azad Gomantak Dal (AGD), whose co-founder Prabhakar Sinari is one of the few freedom fighters still living today.
    • Finally, Goa was liberated on December 19, 1961 by swift Indian military action that lasted less than two days.

    Recognition of Goa

    • The Supreme Court of India recognized the validity of the annexation and rejected the continued applicability of the law of occupation.
    • In a treaty with retroactive effect, Portugal recognized Indian sovereignty in 1974.
    • Under the jus cogens rule, forceful annexations including the annexation of Goa are held as illegal since they have taken place after the UN Charter came into force.

    Why was Goa left un-colonized?

    As India moved towards independence, however, it became clear that Goa would not be free any time soon, because of a variety of complex factors.

    • No immediate war: Then PM Nehru felt that if he launched a military operation (like in Hyderabad) to oust the colonial rulers, his image as a global leader of peace would be impacted.
    • Trauma of Partition: The trauma of Partition and the massive rupture that followed, coupled with the war with Pakistan, kept the Government of India from opening another front.
    • Internationalization of the issue: This might have led the international community to get involved.
    • No demand from within: It was Gandhi’s opinion that a lot of groundwork was still needed to raise the consciousness of the people, and the diverse political voices emerging within be brought under a common umbrella.

    Nehruvian dilemma

    • India’s global image: Nehru was headed in shaping India’s position in the comity of nations.
    • Trying peaceful options: He was trying to exhaust all options available to him given the circumstances that India was emerging from.
    • Portuguese obsession: Portugal had changed its constitution in 1951 to claim Goa not as a colonial possession, but as an overseas province.
    • Portugal in NATO: The move was apparently aimed at making Goa a part of the newly formed North Atlantic Treaty Organisation (NATO) military alliance. Hence the collective security clause of the treaty would be triggered.
    • Weak indigenous push: Nehru saw it prudent to pursue bilateral diplomatic measures with Portugal to negotiate a peaceful transfer while, at the same time, a more ‘overt’ indigenous push for liberation.

    Why did Nehru wait until December 1961 to launch a full-scale military offensive?

    India could no longer be seen to delay the liberation of Goa because:

    • Portuguese offensive against Satyagrahis: The firing incident also provoked a sharp response from the Government of India, which snapped diplomatic and consular ties with Portugal in 1955.
    • India as torchbearer of de-colonization: India got itself firmly established as a leader of the Non Aligned World and Afro-Asian Unity, with decolonization and anti-imperialism as the pillars of its policy.
    • Criticisms from African nations: An Indian Council of Africa seminar on Portuguese colonies organized in 1961 heard strong views from African as this was hampering their own struggles against the ruthless regime.
    • Weakening Colonialism: The delegates were certain that the Portuguese empire would collapse the day Goa was liberated.

     

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  • UK’s Rwanda asylum seeker deportation plan is lawful, court rules

    rwanda

    Britain’s plan to send migrants to Rwanda is lawful, London’s High Court ruled, in a victory for PM Rishi Sunak who has made a high-stakes political promise to tackle the record number of migrant arrivals.

    Immigrant’s crisis in UK

    • Since 2018, there has been a marked rise in the number of refugees and asylum seekers that undertake dangerous crossings between Calais in France and Dover in England.
    • Most such migrants and asylum seekers hail from war-torn countries like Sudan, Afghanistan, and Yemen, or developing countries like Iran and Iraq.
    • The Britain that has adopted a hardline stance on illegal immigration, these crossings constitute an immigration crisis.
    • The Nationality and Borders Bill, 2021, which is still under consideration in the UK, allows the British government to strip anyone’s citizenship without notice under “exceptional circumstances”.
    • The Rwanda deal is the operationalization of one objective in the Bill which is to deter illegal entry into the United Kingdom.

    What is the Rwanda Deal?

    • The UK and Rwanda Migration and Economic Development Partnership or the Rwanda Deal is a Memorandum of Understanding (MoU) signed between the two governments.
    • Under this deal, Rwanda will commit to taking in asylum seekers who arrive in the UK on or after January 1, 2022, using illegally facilitated and unlawful cross border migration.
    • Rwanda will function as the holding centre where asylum applicants will wait while the Rwandan government makes decisions about their asylum and resettlement petitions in Rwanda.
    • Rwanda will, on its part, accommodate anyone who is not a minor and does not have a criminal record.

    Rationale of the deal

    • The deal aims to combat “people smugglers”, who often charge exorbitant prices from vulnerable migrants to put them on unseaworthy boats from France to England that often lead to mass drownings.
    • The UK contends that this solution to the migrant issue is humane and meant to target the gangs that run these illegal crossings.

    What will the scheme cost the UK?

    • The UK will pay Rwanda £120 million as part of an “economic transformation and integration fund” and will also bear the operational costs along with an, as yet undetermined, amount for each migrant.
    • Currently, the UK pays £4.7 million per day to accommodate approximately 25,000 asylum seekers.
    • At the end of 2021, this amounted to £430 million annually with a projected increase of £100 million in 2022.
    • The Rwanda Deal is predicted to reduce these costs by outsourcing the hosting of such migrants to a third country.

    Will the Rwanda Deal solve the problem of illegal immigration?

    • This deal will be implemented in a matter of weeks unless it is challenged and stayed by British courts.
    • While Boris Johnson’s government is undoubtedly bracing for such legal challenges, it remains unclear if the Rwanda Deal will solve the problem of unlawful crossings.
    • Evidence from similar experiences indicates that such policies do not fully combat “people smuggling”.

    Criticisms of the deal

    • There are dangers of transferring refugees and asylum seekers to third countries without sufficient safeguards.
    • The refugees are traded like commodities and transferred abroad for processing.
    • Such arrangements simply shift asylum responsibilities, evade international obligations, and are contrary to the letter and spirit of the Refugee Convention.
    • Rwanda also has a known track record of extrajudicial killings, suspicious deaths in custody, unlawful or arbitrary detention, torture, and abusive prosecutions, particularly targeting critics and dissidents.

    Do any other countries send asylum seekers overseas?

    • Yes, several other countries — including Australia, Israel and Denmark — have been sending asylum seekers overseas.
    • Australia has been making full use of offshore detention centres since 2001.
    • Israel, too, chose to deal with a growing influx of asylum seekers and illegal immigrants from places like Sudan and Eritrea by striking deals with third countries.
    • Those rejected for asylum were given the choice of returning to their home country or accepting $3,500 and a plane ticket to one of the third countries.
    • They faced the threat of arrest if they chose to remain in Israel.

     

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