Editorials/Opinions Analysis For UPSC 11 March 2023
- Climate as the EU’s greatest trade weapon
- Countries Reach an Agreement to Protect Marine Life Offshore
Climate as the EU’s greatest trade weapon
In accordance with the EU’s new regulation, “Carbon Border Adjustment Mechanism,” the EU will begin collecting a carbon tax on each consignment of these products on January 1, 2026. (CBAM).
GS Paper-2: Effect of Policies and Politics of Developed and Developing Countries on India’s Interests.
Discuss the effects of the EU’s new “Carbon Border Adjustment Mechanism” (CBAM) regulation on the Indian and global economies. (250 words)
- CBAM may result in average taxes on iron, steel, and aluminium products ranging from 20 to 35 percent, which is significantly higher than the average 2.3% bound tariffs for manufacturers agreed upon by the EU at the WTO.
- From October 1 of this year, India’s exports of cement, iron, steel, aluminium, fertiliser, and hydrogen to the European Union (EU) will be subject to increased scrutiny. CBAM will gradually cover new products, and by 2034, it will be imposed on all goods exported to the EU.
Emissions Trading System (EU ETS)
- By 2030, the EU wants to reduce carbon emissions by 55% compared to 1990 levels, and by 2050, it wants to achieve carbon neutrality.
- The EU’s tool for achieving these objectives is the Emissions Trading System (EU ETS).
- The EU-ETS caps the amount of greenhouse gas emissions that can be released from each installation, and it monitors emissions from over 10,000 power plants, oil refineries, iron, steel, aluminium, cement, paper, glass, and civil aviation factories.
European Emission Allowance (EUA)
- The EUA, a type of licence or permit that permits one tonne of CO2 emission, is how the ETS system is operated.
- The number of annual EUAs granted to each participating firm is restricted.
- They must purchase EUAs through the ETS auction if their emissions are higher than the EUA allowance.
- To reduce emissions, the EU-ETS system gradually lowers the cap.
- By investing in better technologies, fossil fuel substitutes, and energy efficiency, the companies should reduce their emissions.
- Thus, the EU-ETS is a cap-and-trade system that relies on market forces to reduce emissions. The carbon price that the system enables the market to set has an impact on investment decisions.
Concerns related to CABM
- Any emission reduction target imposed on such firms will lead to EU firms moving to less expensive locations like China or India.
- Issue of Carbon Leakages.
- Carbon leakage is the term used to describe the phenomenon of businesses in the polluting sector moving from high-cost to low-cost nations.
- Carbon leakage is more likely due to the EU’s rising carbon prices, which will increase from €30 per tonne of CO2 in December 2020 to €100 in February 2023.
- The most polluting industries, such as steel and aluminium, are given free emissions allowances, or EUAs, to cover all of their emissions, despite the fact that the EU ETS covers many industrial sectors for emission reduction.
- International trade disruption: By 2034, high CBAM taxes on all goods will cause a disruption in global trade. Many other nations, including the US, UK, Canada, and others, may soon adopt similar regulations.
- Because they engage in the most manufacturing that is carbon-intensive, developing nations will suffer the most.
- Global value chains driven by developed nations have ensured that cleaner production occurs in developed nations while the polluting portion of production occurs in developing nations.
- Minimal impact on the environment: Because CBAM has no plans to cut back on consumption, CBAM will have a minimal environmental impact.
- Breach of the fundamental tenets of the Paris Agreement: The CBAM goes against the fundamental tenet of the Paris Agreement, which is the concept of common but differentiated responsibilities (CBDR).
- It forces developed countries’ environmental standards on developing nations.
- In a joint statement released in April 2021 under the title CBAM, Brazil, Russia, India, China, and South Africa criticised the UNFCCC’s principle of “common but differentiated responsibilities and respective capabilities” as discriminatory and in violation of equity principles.
- Placing more responsibility on developing nations:
- Rather than providing aid, the EU will now use the CBAM mechanism to collect money from developing countries. The EU will use this money as a financial resource rather than to help developing countries implement policies to combat climate change.
Impact on India
- The metal industry in India will face a sizable challenge as a result of CBAM.
- The EU received 27% of India’s $8.2 billion in CY 2022 exports of iron ore pellets, iron, steel, and aluminium products.
- Given that the EU is a significant trading partner and receives 17% of India’s exports, there may be pressure on India’s exports to the EU once CBAM applies to all goods.
- Setting up a task force to get industry and administrative ministries ready for the CBAM challenge is a step in the right direction for India.
- Considering CBAM’s effects when negotiating an FTA with the UK and the EU. Even if the two countries decide to have zero tariffs under the FTA, CBAM will make sure that Indian goods will pay extremely high CBAM duties when EU goods enter India with zero tariffs.
Countries Reach an Agreement to Protect Marine Life Offshore
After two weeks of negotiations in New York, the United Nations has for the first time adopted a single treaty to safeguard biodiversity in the high seas.
GS Paper-3: Environment; Climate Change; Marine Life
A victory for multilateralism and global efforts to halt the destructive trends threatening ocean health for the present and future generations is the recently adopted UN High Seas Treaty. Discuss. (250 Words)
- The treaty was negotiated in accordance with the 1982 United Nations Convention on the Laws of the Sea (UNCLOS), which sets forth the rights of nations in relation to marine resources.
- However, previous attempts to reach an agreement had repeatedly stalled.
- An updated framework to protect marine life in the areas outside national boundary waters, known as the high seas, had been in discussions for more than 20 years.
- Almost half of the surface of the planet is covered by this unified agreement treaty.
Importance of the treaty
- The Biodiversity Beyond National Jurisdiction (BBNJ) Treaty, also known as the Treaty of High Seas, will establish Marine Protected Areas (MPAs) on high seas and establish a new body to manage ocean life conservation.
- The treaty also lays out guidelines for performing environmental impact analyses for maritime business ventures.
- It implies that all activities slated for the high seas must be examined, though not all will undergo a thorough evaluation.
- This agreement focuses on four key topics:
- Marine genetic resources and their conservation and sustainable use in Areas Beyond the Limits of National Jurisdiction (ABNJ).
- Tools for area-based management, such as marine protected areas (MPA).
- Environmental impact evaluations.
- The development of capacity and the transfer of marine technology.
The Treaty’s Comprehensive Protection
- Protecting this portion of the planet’s surface is essential to maintaining the planet’s health.
- On more than 40% of the Earth’s surface, comprehensive protection of endangered species and habitats is now possible.
- Water conservation: o It is also an important tool for achieving the recently agreed Kunming-Montreal target of protecting at least 30% of the world’s ocean by 2030, which is the minimum level of protection required, according to scientists, to ensure a healthy ocean. This target was just agreed in December.
- Better Coordination with Regional Treaties: A number of marine species, such as dolphins, whales, sea turtles, and many fish, travel great distances every year, crossing international boundaries and oceans.
- International governing bodies have long struggled to protect them, along with human communities that depend on fishing or marine-related tourism.
- In order to address threats and concerns across species’ ranges, this treaty will aid in tying together the various regional treaties.
- Increase the Economic Value of Coastal Biodiversity: This protection benefits both economies and coastal biodiversity.
- The agreement is essential for addressing the triple global crisis of pollution, biodiversity loss, and climate change.
- In maritime law, the term “high seas” refers to all areas of the body of saltwater that surrounds the earth but is not a part of a state’s territorial sea or internal waters.
- It refers to marine regions (from the deep seabed to the airspace above) that are outside the 200 nautical mile limit of the coastal States’ exclusive economic zones (EEZs) and beyond the boundaries of their continental shelves.
- These are oceanic regions whose management is shared by several countries.
- There is unrestricted access for all nations to ship, fish, and conduct research.
- The high seas (water column), the airspace above, and the deep seabed regions beyond the States’ continental shelves are all considered marine areas beyond national jurisdiction (ABNJ).
- ABNJ contains a sizable portion of the biodiversity on our planet and makes up nearly two thirds of the ocean’s surface.
- Protection of the high seas is important
- Ocean giants like sharks, whales, and predatory fish live in the high seas, which are among the most biologically productive places on earth.
- The ocean volume traps heat and the seabed sequesters enormous amounts of carbon, significantly slowing the effects of climate change on land and in the atmosphere.
- The High Seas are home to about 270,000 species, with many more still undiscovered. But some species are already in danger of going extinct.
- Only 1.44% of the High Seas is currently under protection.
The United Nations Convention on the Law of the Sea (UNCLOS)
- The United Nations Convention on the Law of the Sea (UNCLOS) is a treaty that was adopted by the United Nations in 1982.
- It establishes guidelines for all uses of the oceans’ resources and establishes a thorough regime of law and order in the world’s oceans and seas.
- It encapsulates long-standing guidelines for using the oceans in one document while also introducing new legal frameworks and addressing fresh issues.
- The Convention also lays the groundwork for future advancements in particular spheres of maritime law.
- It divides marine areas into five main zones: the High Seas, Exclusive Economic Zone (EEZ), Contiguous Zone, Territorial Sea, and Internal Waters.
- Membership: o A total of 168 parties, including 167 states and the European Union, ratified the convention. The convention has been signed by 14 more UN members, but they have not yet ratified it.
- India contributed positively to the discussions that led to the adoption of UNCLOS in 1982, and the country has been a party to the convention since 1995.
- Commercial fishing, mining, and pollution from chemicals and plastics have all long exploited the high seas.
- Governments have taken an important step that strengthens the legal protection of two-thirds of the ocean and with it marine biodiversity and the livelihoods of coastal communities.
- The new agreement is about “acknowledging that the ocean is not a limitless resource, and it requires global cooperation to use the ocean sustainably.
- Despite the importance of this development, there is still much work to be done before it can be put into practise.