Editorials/Opinions Analysis For UPSC 11 May 2023

Editorials/Opinions Analysis For UPSC 11 May 2023

Contents

1. Institutional Difficulties and Suggestions for Decarbonization
2. WTO IT accord signing was a bad decision

Institutional Difficulties and Suggestions for Decarbonization

Context

• The decarbonization trend is a worldwide one with socio-political and economic ramifications.
• There may be winners and losers as a result of the implementation of decarbonization strategies.
• A few instances are the loss of jobs in the oil and gas, coal mining, automotive, and mining industries.
• Professionalisation of the decision-making process is necessary for an equitable and efficient decarbonization.

Relevance:

GS Paper-3: Economic Development, Biodiversity, and Environment

Mains Question

Analyse the current legal framework for decarbonization in India, taking into account the overlapping duties of various ministries and state governments. Develop a comprehensive regulatory plan to support efficient and fair decarbonization.(250 Words)

Decarbonization

• The term “decarbonization” describes the process of lowering or removing carbon dioxide (CO2) and other greenhouse gas emissions from a variety of economic sectors, including energy, transportation, industry, and agriculture.
• The objective of decarbonization is to transition to low-carbon or carbon-neutral technology and practises in order to combat climate change and limit global warming.
• China produces around 30% of the world’s greenhouse gas (GHG) emissions, followed by the United States with nearly 14% and India at number three.

Several tactics and technologies are used to decarbonize the economy:

• Renewable Energy: Increasing the use of CO2-free renewable energy sources, like solar, wind, hydroelectric, and geothermal energy.
• Energy Efficiency: Increasing energy efficiency in a variety of industries to cut down on energy use and the pollutants that go along with it.
• Electrification: The transition from fossil fuel-powered technologies to electric-based systems, which rely on a decarbonized electrical grid and include electric automobiles and electric heating/cooling.
• Carbon Capture and Storage (CCS): This technique stores CO2 emissions from factories and power plants underground rather than releasing them into the environment.
• Using bioenergy and biofuels instead of fossil fuels by using bioenergy made from organic matter and biofuels. To avoid having a negative environmental impact, it is crucial to guarantee sustainable practises in the production of bioenergy.
• Circular Economy: Using a circular economy strategy to reduce waste, increase resource efficiency, and encourage recycling and reuse can help cut emissions related to the manufacture and disposal of items.

Institutional Difficulties in India’s Decarbonization Decision-Making

• Fragmented Decision-Making:
  • Decarbonisation includes several sectors and requires cooperation across various ministries and government bodies.
• However, decision-making power is frequently spread out across various groups, resulting in fragmented approaches and sluggish execution.
  • The development and implementation of good policies are hampered by the lack of centralised decision-making.
• Lack of Clear Mandates: o Ministries and agencies’ roles and mandates in relation to decarbonization are frequently ambiguous or duplicated.
  • This ambiguity may cause miscommunication, conflicts of interest, and delays in decision-making.
  • Defined roles and clear directives are necessary for efficient collaboration and responsibility.
• Limited Technical Knowledge: Decarbonization calls for technical know-how in fields like renewable energy, energy efficiency, and low-carbon technology.
  • Regulating organisations and decision-making institutions may not have the necessary specialised knowledge and skills to manage the complex difficulties of decarbonization in an efficient manner.
• Ineffective decarbonization plans should incorporate and take into account the viewpoints of a variety of stakeholders, including business leaders, members of civil society organisations, academics, and communities that will be impacted.
• However, there is frequently little interaction with these stakeholders, which results in a lack of inclusivity and possibly opposition to suggested actions.

What legislative actions are possible?

• Centralised Coordination: o Create a central authority or ministry that is specifically tasked with coordinating decarbonization initiatives across various sectors.
  • This central organisation should be given the authority to create a coherent plan, establish goals, and keep track of development.
  • It can provide the required advice, oversight, and coordination to guarantee a cohesive strategy to decarbonisation.
• Integration of Ministries: o Consolidate important decarbonization-related ministries, including the Ministries of Environment, Forests, and Climate Change, Power, Renewable Energy, Coal, and Petroleum and Natural Gas, under the aegis of a single, mega-energy ministry.
  • This integration would promote a more comprehensive approach to decarbonization by streamlining decision-making, encouraging collaboration, and fostering it.
• The Need for Comprehensive Regulatory Arrangements: o At the moment, different ministries and state governments are tasked with handling decarbonization.
  • The nodal ministry is the Ministry of Environment, Forests and Climate Change (MOEFCC), but other ministries also have duties.
  • The current cross-ministerial system is workable, but its implementation would be more successful with plenary powers.
• Rationalisation of Responsibilities: o Consolidate the decarbonization-related mandates of numerous ministries and state governments to streamline the distribution of responsibilities.
• This would provide a distinct division of tasks and responsibilities among various entities involved in the process, eliminate duplication, and lessen the administrative load.
• Promote meaningful interaction with stakeholders, such as business leaders, members of civil society organisations, academics, and communities that are affected.
  • Create procedures for routine consultation, public hearings, and feedback gathering to include a range of viewpoints and guarantee that decarbonization plans take into account the worries and requirements of all stakeholders.
• Monitoring and Reporting: o Develop strong monitoring, reporting, and evaluation procedures to track the progress of decarbonisation activities.
  • Regular evaluation of policy results, data gathering, and open reporting would support evidence-based decision-making, uncover shortcomings, and enable remedial steps to attain optimal results.
• Establishing a Mega-Ministry of Energy to consolidate important supply-side ministries involved in carbon reduction.
  • Take both traditional and unconventional forms of power, renewable energy, coal mining, petroleum, and natural gas into consideration.
  • Facilitate coordinated decision-making and profound industry transformation while reducing job losses and boosting the creation of new positions.
• Fostering international alliances and collaboration is a good way to take advantage of best practises, technical breakthroughs, and financial resources.
  • Connect with worldwide organisations, academic institutions, and nations leading the decarbonization movement to share information, gain access to funding, and access technical and financial help.
• Adopt a cooperative federalism strategy, taking cues from organisations like the GST Council and NITI Aayog.

Conclusion:

• Stronger leadership continuity and professionalisation are essential for efficient decarbonization decision-making.
• Regulatory simplification and the creation of powerful organisations will improve coordination and effectiveness.
• Sustained attention at the highest levels of leadership is necessary for a just and effective transition to a low-carbon economy.

WTO IT accord signing was a bad decision

Context

When India joined the Information Technology Agreement (ITA) of the World Trade Organisation (WTO), it pledged to remove customs taxes on roughly 200 IT items.The ITA has, however, been particularly depressing for India, whose domestic IT sector has all but vanished.

Relevance:

GS Paper-3: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development, and Employment

Mains Question

Analyse the effects of India’s decision to join the WTO Information Technology Agreement (ITA) in 1997 on the country’s IT hardware market. (150 Words)

Background of the ITA:

• On December 13, 1996, a small group of WTO members signed the ITA during the inaugural WTO ministerial session, which was held in Singapore.
• A total of 200 IT-related products were exempt from customs charges under the terms of the agreement.
• The European Union (EU), Hong Kong, Japan, Korea, Singapore, Thailand, and the US were the main proponents of the ITA. These nations either benefited from royalty flows from sales of branded IT products or had developed into significant manufacturing hubs in this sector as a result of foreign investment from developed nations.

India’s Decision to Join the ITA:

• India appears to have actively participated in negotiations on this matter, despite the fact that it did not decide to join the ITA at the Singapore ministerial meeting.
• On December 16, 1996, the Commerce Minister of India made the following statement in the Lok Sabha regarding this matter: “India had taken the view that strengthening the global information technology infrastructure would be generally beneficial and therefore, subject to the interests of domestic producers being adequately safeguarded, India could consider joining the programme of phased tariff reductions.”
• But soon after joining, India’s idealised perception of ITA began to shift. According to the DOC website, “India’s experience with the ITA has been very discouraging, almost wiping out the Indian IT industry.”

The Bad Experience with the ITA:

• The main goal of joining the ITA was to increase the competitiveness of IT services in India by lowering the cost of hardware imports.
• With the advantage of hindsight, it is possible to infer that this choice was poor.
• According to calculations based on the Trade in Value Added (TiVA) database of the OECD, the value-added of IT services as a whole was not significantly increased by IT hardware.
• Machinery and equipment, including IT hardware, contributed less than $1 to the final output of IT services for every $100 of IT and telecoms services sold in India, and $2 to the final output of telecommunication services.
  • Effect on Domestic makers: o Following India’s entry into the ITA, domestic makers of computers, electronics, and optical goods took a significant hit.
    • Their percentage of the nation’s total demand for these goods decreased from 70% in 1995 to about 45% in 2011.
• This occurred as a result of the government signing away the authority to levy customs duties on IT gear, leaving it without any practical tools for implementing policies to safeguard the domestic IT hardware market.

Missed chance:

• If India hadn’t joined the ITA, the government would have retained the option of keeping customs duties low but raising them when the domestic industry couldn’t handle imported IT products.
• This would have been a more useful way of balancing the competing needs of IT services and the IT hardware industry.
• The government officials wouldn’t have had the benefit of OECD TiVA when making the decision to join the ITA.

Conclusion:

• Trade negotiators frequently have to make important decisions based on incomplete information.
  • It is logical to suppose that this issue will be raised by Indian negotiators in their ongoing FTA discussions with the UK and the EU, as well as in their discussions with the US over the Indo-Pacific Economic Framework for Prosperity (IPEF).
  • In particular, the negotiators may find it challenging to picture the interventions that the government could be obliged to make in the future in fields where technology is advancing quickly.
  • As a general guideline, pick a course of action that keeps the government’s policy options open so it can support its domestic producers as much as feasible.
  • Trade agreements can leave India without the instruments it needs to promote indigenous producers, particularly in developing and new industries.
  • The nation cannot afford to make the same error twice in its ongoing trade negotiations.