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  • [pib] The Urban Learning Internship Programme (TULIP)

    tulip

    More than 25,000 internship opportunities have been advertised under the TULIP programme so far.

    TULIP Program

    • TULIP is a portal jointly developed by the Ministry of HRD, Ministry of Housing & Urban Affairs, and All India Council for Technical Education (AICTE).
    • It helps reap the benefits of India’s demographic dividend as it is poised to have the largest working-age population in the world in the coming years.
    • It helps enhance the value-to-market of India’s graduates and help create a potential talent pool in diverse fields like urban planning, transport engineering, environment, municipal finance etc.
    • It furthers the Government’s endeavors to boost community partnership and government-academia-industry-civil society linkages.

    Why need such a program?

    • India has a substantial pool of technical graduates for whom exposure to real-world project implementation and planning is essential for professional development.
    • General education may not reflect the depth of productive knowledge present in society.
    • Instead of approaching education as ‘doing by learning,’ our societies need to reimagine education as ‘learning by doing.’

     

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  • GI in news: Joynagar Moa

    moa

    The Joynagar Moa, the popular Bengal sweet got 10 year extension for its Geographical Indication (GI) tag.

    Joynagar Moa

    • The moa is a popped-rice ball held together with fresh date-palm jaggery, extracted from the beginning of December till the end of February.
    • Its manufacture is so synonymous with Joynagar, a settlement on the outskirts of Kolkata, that it earned the Geographical Indication tag of Joynagar Moa in 2015.

    How is it made?

    • A moa is made with khoi (puffed rice). The best ones are made with khoi from a rice variety known as kanakchur.
    • It uses cardamom and Bengal’s legendary nolen gur (a liquid jaggery made from date palms and found only in winter).

    Back2Basics: Geographical Indication (GI)

    • A GI is a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin.
    • Nodal Agency: Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry
    • India, as a member of the World Trade Organization (WTO), enacted the Geographical Indications of Goods (Registration and Protection) Act, 1999 w.e.f. September 2003.
    • GIs have been defined under Article 22 (1) of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement.
    • The tag stands valid for 10 years.

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  • Kerala government publishes map for people to seek exemption from ESZ

    The Kerala government has published a forest department map that better reflects the block and plot-wise details of localities that could potentially fall under the Supreme Court-suggested one-km ecologically sensitive buffer zone (ESZ) around forests if imposed.

    What are the Eco-sensitive Zones (ESZs)?

    • Eco-Sensitive Zones (ESZs) or Ecologically Fragile Areas (EFAs) are areas notified by the MoEFCC around Protected Areas, National Parks and Wildlife Sanctuaries.
    • The purpose of declaring ESZs is to create some kind of “shock absorbers” to the protected areas by regulating and managing the activities around such areas.
    • They also act as a transition zone from areas of high protection to areas involving lesser protection.

    How are they demarcated?

    • The Environment (Protection) Act, 1986 does NOT mention the word “Eco-Sensitive Zones”.
    • However, Section 3(2)(v) of the Act, says that Central Government can restrict areas in which any industries, operations or processes or class of industries, operations or processes shall be carried out or shall not, subject to certain safeguards.
    • Besides Rule 5(1) of the Environment (Protection) Rules, 1986 states that central government can prohibit or restrict the location of industries and carrying on certain operations or processes on the basis of certain considerations.
    • The same criteria have been used by the government to declare No Development Zones (NDZs).

    Defining its boundaries

    • An ESZ could go up to 10 kilometres around a protected area as provided in the Wildlife Conservation Strategy, 2002.
    • Moreover, in the case where sensitive corridors, connectivity and ecologically important patches, crucial for landscape linkage, are beyond 10 km width, these should be included in the ESZs.
    • Further, even in the context of a particular Protected Area, the distribution of an area of ESZ and the extent of regulation may not be uniform all around and it could be of variable width and extent.

    Activities Permitted and Prohibited

    • Permitted: Ongoing agricultural or horticultural practices, rainwater harvesting, organic farming, use of renewable energy sources, and adoption of green technology for all activities.
    • Prohibited: Commercial mining, saw mills, industries causing pollution (air, water, soil, noise etc), the establishment of major hydroelectric projects (HEP), commercial use of wood, Tourism activities like hot-air balloons over the National Park, discharge of effluents or any solid waste or production of hazardous substances.
    • Under regulation: Felling of trees, the establishment of hotels and resorts, commercial use of natural water, erection of electrical cables, drastic change of agriculture system, e.g. adoption of heavy technology, pesticides etc, widening of roads.

    What is the recent SC judgment that has caused an uproar in Kerala?

    • On June 3, a three-judge bench of the Supreme Court heard a PIL that sought to protect forest lands in the Nilgiris in Tamil Nadu, but was later expanded to cover the entire country.
    • In its judgment, the court while referring to the 2011 guidelines as “reasonable”, directed all states to have a mandatory 1-km ESZ from the demarcated boundaries of every protected area.
    • It also stated that no new permanent structure or mining will be permitted within the ESZ.
    • If the existing ESZ goes beyond 1-km buffer zone or if any statutory instrument prescribes a higher limit, then such extended boundary shall prevail, the court, as per the Live Law report.

    Why are people protesting against it?

    • There is a high density of human population near the notified protected areas.
    • Farmer’s groups and political parties have been demanding that all human settlements be exempt from the ESZ ruling.
    • The total extent of the wildlife sanctuaries in Kerala is eight lakh acres.
    • If one-km of ESZ is demarcated from their boundaries, around 4 lakh acres of human settlements, including farmlands, would come within that purview.

     

    Try this PYQ

    With reference to ‘Eco-Sensitive Zones’, which of the following statements is/are correct?

    1. Eco-Sensitive Zones are the areas that are declared under the Wildlife (Protection) Act, 1972
    2. The purpose of the declaration of Eco-Sensitive Zones is to prohibit all kinds of human activities, in those zones except agriculture.

    Select the correct answer using the code given below:

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

     

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  • Centre rules out an increase in MSP for Cotton

    While cotton farmers in several States have demanded an increase in the minimum support price (MSP) of the crop, the Centre has said that it is watching the cotton production scenario and decide accordingly.

    What is MSP?

    • The MSP assures the farmers of a fixed price for their crops, well above their production costs.
    • MSP, by contrast, is devoid of any legal backing. Access to it, unlike subsidized grains through the PDS, isn’t an entitlement for farmers.
    • They cannot demand it as a matter of right. It is only a government policy that is part of administrative decision-making.
    • The Centre currently fixes MSPs for 23 farm commodities based on the Commission for Agricultural Costs and Prices (CACP) recommendations.

    Fixing of MSPs

    • The CACP considered various factors while recommending the MSP for a commodity, including the cost of cultivation.
    • It also takes into account the supply and demand situation for the commodity; market price trends (domestic and global) and parity vis-à-vis other crops; and implications for consumers (inflation), environment (soil and water use) and terms of trade between agriculture and non-agriculture sectors.

    What changed with the 2018 budget?

    • The Budget for 2018-19 announced that MSPs would henceforth be fixed at 1.5 times of the production costs for crops as a “pre-determined principle”.
    • Simply put, the CACP’s job now was only to estimate production costs for a season and recommend the MSPs by applying the 1.5-times formula.

    How was this production cost arrived at?

    • The CACP projects three kinds of production cost for every crop, both at the state and all-India average levels.
    • ‘A2’ covers all paid-out costs directly incurred by the farmer — in cash and kind — on seeds, fertilizers, pesticides, hired labor, leased-in land, fuel, irrigation, etc.
    • ‘A2+FL’ includes A2 plus an imputed value of unpaid family labor.
    • ‘C2’ is a more comprehensive cost that factors in rentals and interest forgone on owned land and fixed capital assets, on top of A2+FL.

    How much produce can the government procure at MSP?

    • The MSP value of the total production of the 23 crops worked out to around Rs 10.78 lakh crore in 2019-20.
    • Not all this produce, however, is marketed. Farmers retain part of it for self-consumption, the seed for the next season’s sowing, and also for feeding their animals.
    • The marketed surplus ratio for different crops is estimated to range differently for various crops.
    • It ranges from below 50% for ragi and 65-70% for bajra (pearl millet) and jawar (sorghum) to 75% for wheat, 80% for paddy, 85% for sugarcane, 90% for most pulses, and 95%-plus for cotton, soybean, etc.
    • Taking an average of 75% would yield a number of just over Rs 8 lakh crore.
    • This is the MSP value of production that is the marketable surplus — which farmers actually sell.

    Nature of MSP

    • There is currently no statutory backing for these prices, nor any law mandating their enforcement.

    Farmers demand legalization

    • Legal entitlement: There is a demand that MSP based on a C2+50% formula should be made a legal entitlement for all agricultural produce.
    • Private traders’ responsibility: Some say that most of the cost should be borne by private traders, noting that both middlemen and corporate giants are buying commodities at low rates from farmers.
    • Mandatory purchase at MSP: A left-affiliated farm union has suggested a law that simply stipulates that no one — neither the Government nor private players — will be allowed to buy at a rate lower than MSP.
    • Surplus payment by the govt.: Other unions have said that if private buyers fail to purchase their crops, the Government must be prepared to buy out the entire surplus at MSP rates.
    • Expansion of C2: Farm unions are demanding that C2 must also include capital assets and the rentals and interest forgone on owned land as recommended by the National Commission for Farmers.

    Government’s position

    • The PM has announced the formation of a committee to make MSP more transparent, as well as to change crop patterns — often determined by MSP and procurement.
    • The panel will have representatives from farm groups as well as from the State and Central Governments, along with agricultural scientists and economists.

    Back2Basics: Cotton Cultivation in India

    • Cotton, a semi-xerophyte, is grown in tropical & sub-tropical conditions.
    • A minimum temperature of 15C is required for better germination at field conditions.
    • The optimum temperature for vegetative growth is 21-27C & it can tolerate temperature to the extent of 43C but temperature below 21C is detrimental to the crop.
    • Cotton is grown on a variety of soils ranging from well-drained deep alluvial soils in the north to black clayey soils of varying depth in central region and in black and mixed black and red soils in south zone.
    • It is semi-tolerant to salinity and sensitive to water logging and thus prefers well-drained soils.

    Sowing season

    • The sowing season of cotton varies considerably from tract to tract and is generally early (April-May) in northern India.
    • Sowing is delayed as its proceeds down south (monsoon based in southern zone).

     

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  • [pib] Vainu Bappu Observatory

    vainu

    The several stellar discoveries of the 40-inch telescope at the Vainu Bappu Observatory in Kavalur, Tamil Nadu, were highlighted at the celebration of its 50 years of its operation.

    Vainu Bappu Observatory

    • The Vainu Bappu Observatory is an astronomical observatory owned and operated by the Indian Institute of Astrophysics.
    • It is located at Kavalur in the Javadi Hills, near Vaniyambadi in Tirupathur district in Tamil Nadu.
    • The 40-inch telescope was installed in 1972 and started producing important astronomical discoveries soon after.
    • More than a generation of astronomers were trained at this telescope as well.

    Significant feats achieved by VBO

    The telescope set up by Professor Vainu Bappu has played a significant role in astronomy with major discoveries like-

    1. Presence of rings around the planet Uranus,
    2. New satellite of Uranus,
    3. Presence of an atmosphere around Ganymede which is a satellite of Jupiter
    4. Discovery and study of many ‘Be stars’, Lithium depletion in giant stars, optical variability in Blazars, the dynamics of the famous supernova SN 1987A and so on.

     

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  • Dhokra Art of West Bengal

    dhokra

    This newscard is an excerpt from the articles published in TH.

    Do you know?

    The dancing girl from Mohenjo-Daro (c. 2300 – 1750 BCE) is not just the most famous piece of art from the Harappan Civilisation, it is also one of the finest examples of metal art from that period.

    dhokra

    But did you know that this world-famous figurine is also the oldest example of a unique metal casting tradition called Dhokra that survives to this day in parts of India?

    Dhokra Art

    • Named after a nomadic tribe called ‘Dhokra Damar’, the art of Dhokra was originally found in the region from Bankura to Dariapur in Bengal, and across the metal-rich regions of Odisha and Madhya Pradesh.
    • Today, it is practiced in the tribal belt across present-day Jharkhand, West Bengal, Odisha, Chhattisgarh and Telangana.
    • The Dhokra artistes first make a clay model out of wax, which is then replaced with molten metal, either brass or bronze, through a lost-wax metal cast.

    What is Dhokra?

    • Dhokra is a metal casted art that uses the ancient lost-wax casting technique.
    • This art is said to be the first of its kind to use a non-ferrous metal like copper and its alloys – brass (a mix of zinc and copper) or bronze (tin and copper) which do not contain iron.
    • It uses the process of annealing, where a metal is heated to very high temperatures and allowed to cool slowly.
    • The casting is done using two kinds of processes – the traditional, hollow-casting method and solid casting. Solid casting is predominant in Telangana, whereas hollow casting is used in Central and Eastern India.

    Symbolism of Dhokra

    • With its roots in ancient civilisations, Dhokra represents a primitive lifestyle and the beliefs of people, going back to the age of hunting.
    • This is why figures of elephants, owls, horses and tortoises are commonly seen in Dhokra art.
    • The elephant symbolises wisdom and masculinity; the horse motion; owl prosperity and death; and the tortoise femininity.
    • In Hindu mythology, these iconic symbols also have stories behind them.
    • The world is imagined to rest on four elephants, standing on the shell of a tortoise.
    • The tortoise, considered as an avatar of Lord Vishnu, carries the world on his back, holding up the earth and the sea.

     

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  • 3 more sites added to UNESCO’s tentative list of World Heritage Sites

    Gujarat’s Vadnagar town, the iconic Sun Temple at Modhera, and the rock cut sculptures of Unakoti in Tripura have been added to the tentative list of UNCESO World Heritage Sites.

    What is UNESCO tentative list?

    • The UNESCO tentative list is an inventory of those properties which each State Party intends to consider for nomination.
    • With these 3 sites, India now has 52 sites on UNESCO Tentative List.

    About the sites

    (1) Sun Temple, Modhera

    unesco

    • The Sun Temple at Modhera is located on the left bank of the river Pushpavati, a tributary of river Rupan in Becharaji taluka of Mehsana district.
    • The temple description states that it is built in Maru-gurjara architectural style, consists of the main temple shrine (garbhagriha), a hall (gadhamandapa), an outer hall or assembly hall (Sabhamandapa or rangamandapa) and a sacred pool (Kunda), which is now called Ramakunda.
    • This east-facing temple is built with bright yellow sandstone.
    • It is the earliest of such temples which set trends in architectural and decorative details, representing the Solanki style at its best.

    (2) Vadnagar

    unesco

    • Vadnagar is a historic town, which had continuous habitation for more than 2,700 years.
    • A multi-layered historic town, the history of Vadnagar stretches back to nearly 8th century BCE.
    • The town still retains a large number of historic buildings that are primarily religious and residential in nature.
    • It has evolved with time and has an early historic fortified settlement, hinterland port, centre for industries of shells and beads, late medieval town, religious centre/temple town, a significant junction on trade routes and mercantile town.
    • Rampart datable to second century BCE, fortification along the lake from third-fourth century CE, findings of Indo-Pacific glass beads and marine shells, palaeo-seismic evidence evidently point towards historical authenticity of the town.

    (3) Unakoti

    unesco

    • Located in the northeastern region of Tripura, Unakoti is known as an ancient holy place associated with Shaiva worship.
    • It is famously known as the ‘Angkor Wat of the North-East’
    • The structures of the rock-cut sculptures are gigantic and have distinct mongoloid features and display almost the same mystical charm as the spellbinding figures in the Angkor Wat temple of Cambodia.

    Back2Basics: UNESCO World Heritage Sites

    • A World Heritage Site is a landmark or area, selected by the UN Educational, Scientific and Cultural Organization (UNESCO) for having cultural, historical, scientific or other forms of significance, which is legally protected by international treaties.
    • The sites are judged to be important for the collective and preservative interests of humanity.
    • To be selected, a WHS must be an already-classified landmark, unique in some respect as a geographically and historically identifiable place having special cultural or physical significance (such as an ancient ruin or historical structure, building, city, complex, desert, forest, island, lake, monument, mountain, or wilderness area).
    • It may signify a remarkable accomplishment of humanity, and serve as evidence of our intellectual history on the planet.
    • The sites are intended for practical conservation for posterity, which otherwise would be subject to risk from human or animal trespassing, unmonitored/uncontrolled/unrestricted access, or threat from local administrative negligence.
    • The list is maintained by the international World Heritage Program administered by the UNESCO World Heritage Committee, composed of 21 “states parties” that are elected by their General Assembly.

    UNESCO World Heritage Committee

    • The World Heritage Committee selects the sites to be listed as UNESCO World Heritage Sites, including the World Heritage List and the List of World Heritage in Danger.
    • It monitors the state of conservation of the World Heritage properties, defines the use of the World Heritage Fund and allocates financial assistance upon requests from States Parties.
    • It is composed of 21 states parties that are elected by the General Assembly of States Parties for a four-year term.
    • India is NOT a member of this Committee.

     

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  • What is Winter Solstice?

    solstice

    Today, December 21, is Winter Solstice, the shortest day of the year in the Northern Hemisphere. In the Southern Hemisphere, conversely, it was Summer Solstice, the year’s longest day.

    What is Winter Solstice?

    • The winter solstice, also called the hibernal solstice, occurs when either of Earth’s poles reaches its maximum tilt away from the Sun.
    • This happens twice yearly, once in each hemisphere.

    What are Solstices?

    • Solstices occur because Earth’s axis of rotation is tilted about 23.4 degrees relative to Earth’s orbit around the sun.
    • This tilt drives our planet’s seasons, as the Northern and Southern Hemispheres get unequal amounts of sunlight over the course of a year.
    • From March to September, the Northern Hemisphere is tilted more toward the sun, driving its spring and summer.
    • From September to March, the Northern Hemisphere is tilted away, so it feels like autumn and winter.
    • The Southern Hemisphere’s seasons are reversed.
    • On two moments each year—what are called solstices—Earth’s axis is tilted most closely toward the sun.

    Impact on day-time

    • The hemisphere tilted most toward our home star sees its longest day, while the hemisphere tilted away from the sun sees its longest night.
    • During the Northern Hemisphere’s summer solstice—which always falls around June 21—the Southern Hemisphere gets its winter solstice.
    • Likewise, during the Northern Hemisphere’s winter solstice—which always falls around December 22—the Southern Hemisphere gets its summer solstice.

    Impact of the tilted axis

    • The Northern Hemisphere spends half the year tilted in the direction of the Sun, getting direct sunlight during long summer days.
    • During the other half of the year, it tilts away from the Sun, and the days are shorter.
    • Winter Solstice, December 21, is the day when the North Pole is most tilted away from the Sun.
    • The tilt is also responsible for the different seasons that we see on Earth.
    • The side facing the Sun experiences day, which changes to night as Earth continues to spin on its axis.

    Un-impacted regions

    • On the Equator, day and night are equal. The closer one moves towards the poles, the more extreme the variation.
    • During summer in either hemisphere, that pole is tilted towards the Sun and the polar region receives 24 hours of daylight for months.
    • Likewise, during winter, the region is in total darkness for months.

    Celebrations associated with the Winter Solstice

    • For centuries, this day has had a special place in several communities due to its astronomical significance and is celebrated in many ways across the world.
    • Jewish people call the Winter Solstice ‘Tekufat Tevet’, which marks the start of winter.
    • Ancient Egyptians celebrated the birth of Horus, the son of Isis (divine mother goddess) for 12 days during mid-winter.
    • In China, the day is celebrated by families coming together for a special meal.
    • In the Persian region, it is celebrated as Yalda or Shab-e-Yalda. The festival marks the last day of the Persian month of Azar and is seen as the victory of light over darkness.
    • Families celebrate Yalda late into the night with special foods such as ajeel nuts, pomegranates and watermelon, and recite works of the 14th-century Sufi poet Hafiz Shirazi.

    In Vedic tradition

    • In Vedic tradition, the northern movement of the Earth on the celestial sphere is implicitly acknowledged in the Surya Siddhanta.
    • It outlines the Uttarayana (the period between Makar Sankranti and Karka Sankranti). Hence, Winter Solstice is the first day of Uttarayana.

     

    Try this MCQ:

    Q. On 21st June, the Sun

    (a) Does not set below the horizon at the Arctic Circle

    (b) Does not set below the horizon at Antarctic Circle

    (c) Shines vertically overhead at noon on the Equator

    (d) Shines vertically overhead at the Tropic of Capricorn

     

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  • Credit Ratings Agency and their Significance

    credit

    Fitch Ratings on December 20, 2022, retained its rating for India at ‘BBB’-with a stable outlook.

    What does BBB mean?

    • A ‘BBB’ rating indicates that expectations of default risk are currently low.
    • The capacity for payment of financial commitments is considered adequate, but adverse business or economic conditions are more likely to impair this capacity.

    What is a Rating Agency?

    • Rating agencies assess the creditworthiness or potential of an equity, debt or country.
    • Their reports are read by investors to make an informed decision on whether or not to invest in a particular country or companies in that geography.
    • They assess if a country, equity or debt is financially stable and whether it at a low/high default risk.
    • In simpler terms, these reports help investors gauge if they would get a return on their investment.

    What do they do?

    credit

    • The agencies periodically re-evaluate previously assigned ratings after new developments geopolitical events or a significant economic announcement by the concerned entity.
    • Their reports are sold and published in financial and daily newspapers.

    What grading pattern do they follow?

    • The three prominent ratings agencies, viz., Standard & Poor’s, Moody’s and Fitch subscribe to largely similar grading patterns.
    • Standard & Poor’s accord their highest grade, that is, AAA, to countries, equity or debt with the exceedingly high capacity to meet their financial commitments.
    • Its grading slab includes letters A, B and C with an addition a single or double letter denoting a higher grade.
    • Moody’s separates ratings into short and long-term definitions. Its longer-term grading ranges from Aaa to C, with Aaa being the highest.
    • Fitch, too, rates from AAA to D, with D being the lowest. It follows the same succession scheme as Moody’s and Fitch.

    Criticism of rating agencies

    • Popular ratings agencies publicly reveal their methodology, which is based on macroeconomic data publicly made available by a country, to lend credibility to their inferences.
    • However, credit rating agencies were subjected to severe criticism for allegedly spurring the financial crisis in the United States, which began in 2017.
    • The agencies underestimated the credit risk associated with structured credit products and failed to adjust their ratings quickly enough to deteriorating market conditions.
    • They were charged for methodological errors and conflict of interest on multiple counts.

    Do countries pay attention to ratings agencies?

    • Lowered rating of a country can potentially cause panic selling or offloading of investment by a foreign investor.
    • In 2013, the European Union opted for regulating the agencies.
    • Over reliance on credit ratings may reduce incentives for investor to develop their own capacity for credit risk assessment.
    • Ratings Agencies in the EU are now permitted to issue ratings for a country only thrice a year, and after close of trade in the entire Union.

     

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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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