23 Jan 2023: UPSC Exam Comprehensive News Analysis

CNA 23 Jan 2023:- Download PDF Here

TABLE OF CONTENTS

A. GS 1 Related
B. GS 2 Related
GOVERNANCE
1. Prison reforms and Criminal Justice System in India
C. GS 3 Related
ECONOMY
1. Gig and Platform Workers Rights
ENVIRONMENT
1. Transition to Clean Energy
2. Great Nicobar Project
D. GS 4 Related
E. Editorials
SOCIAL ISSUES
1. A reminder of the flaws in India’s urbanisation policies
INDIAN CONSTITUTION AND POLITY
1. Changing politics, incompatible Governors
EDUCATION
1. It’s time for India’s universities to join the world
F. Prelims Facts
1. Revised EXIM Data
G. Tidbits
H. UPSC Prelims Practice Questions
I. UPSC Mains Practice Questions
FIP Magazine

Category: ENVIRONMENT

1. Transition to Clean Energy

Syllabus: National Environment Agencies, Legislations and Policies

Mains: Issues with India’s transition to Clean Energy

Context: This article discusses the impact of India’s transition to clean energy on its economy.

Introduction:

  • As per the recent study published in the Global Environmental Change journal, India’s financial sector is highly exposed to the risks of the economy transitioning from being largely dependent on fossil fuel to clean energy.
  • Study analysed how extensive is India’s financial-sector exposure to transition risks and how India’s finance professionals and financial institutions are taking sufficient action to manage those transition risks.

Key Findings:

  • Study revealed that India’s financial sector is much more heavily exposed to low-carbon transition risks than standard borrowing classifications might suggest.Β 
    • For example, assessment of individual loans and bonds finds that three-fifths of lending to the β€˜mining’ sector is for oil and gas extraction, while one-fifth of β€˜manufacturing’ debt is for petroleum refining and related industries.Β 
    • Electricity production( largest source of emissions)Β  accounts for 5.2% of outstanding credit, but only 17.5% of power sector lending is to pureplay renewables.Β 
  • Study also revealsΒ  a shortage of experts in India’s financial institutions who had the expertise to appropriately advise the institutions on such a transition.
    • Fewer than half of the 154 finance professionals surveyed were familiar with environmental issues, including climate change mitigation and adaption, greenhouse gas emissions or transition risks.Β 
  • Only four of the 10 major financial institutions surveyed collect information on environmental, social and governance (ESG) risks, and these firms do not systematically incorporate that data into financial planning.

Trillion dollars needed:

  • India needs financing to the order of at least a trillion dollars to meet its commitments to reach net-zero emissions by 2070 and to source half of its electricity needs from non-fossil fuel sources by 2030.
  • Mapping India’s policy commitments against above lending and investment patterns reveals that India’s financial sector is heavily exposed to potential transition risks.
  • Financial institutions will need to ramp up their capacities relatively quickly as the RBI-led momentum further picks upΒ  to move finance towards sustainable assets and activities.
    • RBI is expected to launch its first-ever five- and 10-year sovereign green bonds worth β‚Ή40 billion.

Few resources for renewables:

  • High-carbon industries such as power generation, chemicals, iron and steel, and aviation β€” account for 10% of outstanding debt to Indian financial institutions. However, these industries are also heavily indebted, and therefore have less financial capacity to respond to shocks and stresses.
  • Coal currently accounts for 44% of India’s primary energy sources and 70% of its power generation.
    • According to the Draft National Electricity Plan, 2022, coal’s share in the electricity generation mix will decrease to 50% by the year 2030, compared to the current contribution of 70%.
  • Financial decisions of Indian banks and institutional investors such as poor lending to pure-play renewables will result in more pollution and more expensive energy supply.Β 
  • Consequently, India has much higher electricity from carbon-sources than the world average, despite its vast potential for cheap solar, wind and small hydropower.Β 
  • India needs to build and strengthen its domestic institutions for climate governance. This will require identifying linkages between development needs and low carbon opportunities.

Read more on India’s Net Zero Plan

Read more on Renewable Energy

Nut Graf:Β  Recent study on impact of India’s transition to clean energy on its economy finds that financial institutions are exposed to high risks due toΒ  limited efforts to identify, measure or manage low-carbon transition risks. It suggests swift action by financiers, regulators and policymakers in emerging and developing economies to ensure an orderly transition to net-zero.

2. Great Nicobar Project

Syllabus: Environmental Pollution & Degradation; Environmental Impact Assessment (EIA)

Mains: Diversion of forest land in Great Nicobar Island, compensatory measures and its associated concerns.

Context: Former civil servants write to President of India on Great Nicobar Project

Key Details:

  • The Constitutional Conduct Group, which includes nearly 100 former civil servants, has written to President Droupadi Murmu protesting the government’s push for a mega-infrastructure project on the Great Nicobar island.
  • The Union Environment Ministry in November 2022 gave an in-principle clearance for the diversion of 130.75 sq. km. of forest in Great Nicobar island for a β‚Ή72,000-crore project that includes a trans-shipment port, an airport, a power plant and a greenfield township.

Read more on Great Nicobar Project

Read the previous CNA here.

CNA 23 Jan 2023:- Download PDF Here

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