Chapter 12: ECONOMICS OF ENVIRONMENT

Introduction

Fig 1: Kuznet curve

In the beginning as economy developes and pollution increases due to industrialization and urbanization. In the later stage pollution declines due to structural changes in society from manufacturing to services.

PARIS SUMMIT 2015

$100 billion by 2020 for adaptation and mitigation to be provided by developed countries obligatorily and others voluntarily.

Intended Nationally Determined Contributions were decided to be formed after the Warsaw summit, 2013. India submitted its I.N.D.C in 2015. Submission deadline is 2020 and then after that submit every 5 years and biennial review.INDC may have timeframe for implementation and targets.

Criticisms:

1. INDC may include tagets and implementation time frame but no punitive action if rules not followed.
2. INDC committed so far dont meet the target of reduce GHG's by 55 gigatons.
3. INDC havent mobilized financial resources to meet the targets.
4. No definition of Climate Finance provided. Double counting of loans or grants given by multilateral agencies.
5. Silent on future of clean technology fund and carbon market of kyoto. The clean development mechanism isnt popular and countries pulling out of it.
6. Mitigation isnt the focus of paris summit.

Climate Finance

The types of funds are:

1. Mitigation
2. Adaptation
3. Reducing emission from deforestation and forest degradation.
   
   Green Climate Fund (GCF) is the largest, with pledges amounting to US$10.2 billion. The second largest is the Clean Technology Fund (CTF) with pledges amounting to US$5.3 billion. There is ambiguity about the role of the CTF in the climate finance architecture post-2020. World Bank administers the fund and its focus is on mitigation.
   
   The GCF was established as an operating entity of the financial mechanism of the UNFCCC in 2011 and is expected to be a major channel for climate finance from developed to developing countries.
   
   The highest contribution of US$3 billion has been announced by the USA, followed by Japan (US$1.5 billion), the UK (US$1.2 billion), France (US$1.03 billion) and Germany (US$1.0 billion). Some countries including the USA are yet to sign the pledged amounts.
   
   Global Environment Facility (GEF) was established as a pilot programme for environmental protection. The current project cycle is GEF-6 over the years 2014-18. In 1992, when the Biodiversity and Climate Change Conventions were adopted at Rio de Janeiro, the GEF was adopted as a financial mechanism for helping developing countries meet their financing needs. World bank group is one of its administering agencies.

Green Taxation in India

National Clean Energy Fund receives money from the Clean Environment cess on coal. This cess has been increasing.

National Adaptation Fund for Climate Change is for adaptation measures at national and state levels.Rs 350 crore till 2017 and NABARD is the implementation agency.

Renewable Energy Certificate: All energy users like discoms, captive users and open access consumers have to generate certain portion of their energy from renewable sources or else purchase the certificates. 1 cert = 1 MW.

International Solar Alliance

Launched after Paris summit. The countries with land in tropics i.e. 121 and receiving 300 or more days of sunlight. Seeks to mobilize $1000 billion investment by 2030.  India to host secretariat in Gurugram i.e. Gurgaum and has pledged Rs.100 crore to it.

Biofuel

It is a liquid or gaseous fuel produced from biomass. examples are methanol, ethanol, biodiesel.

Three sources of biofuels:

1. Edible:sugar and starch containing edible crops. But these affect food security.
2. Non edible: Jatropha, castor, pongamia crops used.
3. Algae used to generate fuel.

India's target is 20% blending of ethanol in petrol and diesel by 2017.

Perform, Achieve and Trade

National mission on enhanced energy efficiency is under the eight action plans of National Action Plan on Climate Change 2008. Under the PAT scheme the energy intensive units have been identified and specific targets have been developed for them.

If these units achieve these targets in access then they receive energy saving certificates ESCerts. These can be sold to units that havent been able to achieve their targets. Thus this scheme laid the foundation of a Carbon Market for the first time in India.

Bureau of Energy Efficiency, Ministry of Power is implementing this scheme.

1 ESCert = 1 Metric ton of Oil equivalent. ESCerts can be traded on power exchanges.

Of the many environmental prob­lems facing the country, the problem of deforestation has received the maximum attention from the Govern­ment and the general public but ironically, Government policies on afforestation have attracted the greatest public criticism.

• The 1952 forest policy had failed to stop the depletion of forest wealth over the years, and thus it became imperative to evolve a new policy for of forest conservation. The Ministry of Environment and Forests of the Government of India announced a National forest policy in December 1988. The 1988 Policy acknowledged the importance and primacy of tribals and local communities and provided for a sustainable management approach with maintenance of environmental stability as the prime objective. The important features of this policy are :-




• Role of tribals in forests recognised




1. The new forest policy removes many anti-people statements of earlier documents and recognises the symbiotic relationship between the tribal people and the forests.

2. It seeks to ensure that communities living within and around forest areas, specially the tribals should be able to get their domestic requirement of fuelwood, fodder, minor forest produce and construction timber from forests.

3. The new policy enunciates that all agencies responsible for forest management, including forest development corporations should associate tribals closely in the protection, regeneration and de­velopment of forests.




• Depletion of forest area and the target for green cover




1. The new forest policy assumes that forests have been depleted owing to fuel, fodder and timber needs and transfer of land for non-forest uses and for raising revenue

2. It clearly recognises the failure of the state to preserve forests and control timber smugglers contractors.

3. The new policy reiterates that green cover should be extended to two-thirds of the land area in the hills and mountains and that the total forest area in the country should be raised to 100 million hectares or 33 per cent of the total geographical area in the country.

4. This was same as the policy of 1952.




• Discouragement to forest-based industries.




1. According to the new forest policy, forest-based indus­ tries must get their raw materials from wood raised through farm forestry.

2. Besides no forest based enter­prises—except at the village or cottage level — should be set up in the future, unless it is first cleared, after a careful study of the availability of raw materials.

3. The new forest policy asserts that forest-based industries will, no longer, be allowed to plunder the country's forests. The practice of supplying forest pro­duce to industry at concessional rates would cease forthwith.

4. The new policy, states categorically that forest land will not be made available for lease to industry. The wood based industries are now advised to motivate farmers to grow trees by supplying them with seedlings, credit, technical advice and other measures.




• End the system of private forest contractors.




1. The new forest policy advocates an end to the system of contractors working the forests. The contractors will be replaced by institutions such as tribal cooperatives, gov­ ernment corporations, etc.

2. It is a well-known fact that private contractors have exploited ruthlessly the simple and ignorant forest-dwellers. But the tribal development co-operatives and other official agencies had also failed miserably and have also become sources of exploitation.

3. Even then, the new forest policy advocates the distribution of minor forest produce through state-run depot




• Forest land not to be diverted to non-forest uses.




1. The forest department used to assign forest land to individuals or non-government agencies for the purpose of reforestation.

2. But it is a cognisable offence to put forest land into "non-forest uses" which have been defined as "cultivation of tea, coffee, spices, rubber, palms, oil-bearing plants, horti-cultural crops or medicinal plants."

3. The Government has generally suggested alterna­ tives to industrial timber, railway sleepers and fuelwood.

4. The new policy also suggests that India should import timber from other countries.

• The target and the strategy of the 1988 policy were exactly the same as those fixed by the 1952 policy.




• The period of 36 years between 1952 and 1988 had witnessed such ruthless destruction of forests in the country that, instead of the forest cover being raised to 33 per cent of the total geographical area, it had been reduced to 12 per cent by 1988.




• Although the 1952 forest policy allowed forest dwellers and the poor people living near the forests to use minor forest produce. In practice, however, the forest officials did not permit them to collect fuelwood and the use of minor forest produce.




• At the same time, industrial and commercial re­quirements for timber and raw materials were national needs and were subsidised by the State.




• Industry was supplied with cheap timber and raw materials; and the State could raise revenue from the sale of timber and other forest produce.




• The forest department officials were happy with the regular bribes they received for permitting illegal felling of trees.




• It was because of this industrial orientation that the felling of trees for industrial and commercial purposes became extensive and the pace of deforestation got intensified after Independence.




• Even though it talks about the symbiotic relationship between the forest dwellers and forests. The forest department is expected to supply denuded forest land to forest dwellers for the purpose of regeneration and to build community resources depleted by indiscriminate felling.




• However the tribals and other forest dwellers are not allowed to grow fruit trees, medicinal plants or even fodder and fuel wood all of which they need for survival — because these come under the definition of "non-forest uses".




• On the other hand, industries could acquire forest land for growing exclusively industrial species, as they were considered forest plantations




• The 1988 Forest Policy is also bound to fail in the face of uncontrolled expansion of population and regular encroachments on forest land — the ruling party invariably regularises such encroach­ ments at the time of general elections — mindless costruction of multi-purpose irrigation dams destroy prime forests, extension of mining and construction townships and above all illegal felling of trees; all the directly result in rapid deforestation and all the processes are likely to continue unchecked.

Q.What is Rio+20 Conference, often mentioned in the news? (UPSC CSAT 2015)

• It is the United nations Conference on Sustainable Development




• It is a Ministerial Meeting of the World Trade Organization




• It is a Conference of the Inter-governmental Panel on Climate Change




• It is a Conference of the Member Countries of the Convention on Biological Diversity

Ans . A

1. The United Nations Conference on Sustainable Development (UNCSD), also known as Rio 2012, Rio+20, or Earth Summit 2012 was the third international conference on sustainable development aimed at reconciling the economic and environmental goals of the global community.

2. Hosted by Brazil in Rio de Janeiro from 13 to 22 June 2012, Rio+20 was a 20-year follow-up to the 1992 Earth Summit / United Nations Conference on Environment and Development (UNCED).

Q.Which of the following statements regarding ‘Green Climate Fund’ is/are correct?
1. It is intended to assist the developing countries in adaptation and mitigation practices to counter climate change.
2. It is founded under the aegis of UNEP, OECD, Asian Development Bank and World Bank
Select the correct answer using the code given below. (UPSC CSAT 2015)

• 1 only




• 2 only




• Both 1 and 2




• Neither 1 nor 2

Ans . A

1. The Green Climate Fund (GCF) is a fund within the framework of the UNFCCC founded as a mechanism to redistribute money from the developed to the developing world, in order to assist the developing countries in adaptation and mitigation practices to counter climate change.

2. The Green Climate Fund was designated as an operating entity of the financial mechanism of the UNFCCC, in accordance with Article 11 of the Convention. Arrangements will be concluded between the Conference of the Parties (COP) and the Fund to ensure that it is accountable to, and functions under the guidance of, the COP.

3. The Fund is governed and supervised by a Board that will have full responsibility for funding decisions and that receives the guidance of the COP.

Quiz

Score more than 80% marks and move ahead else stay back and read again!