Daily Current Affairs for UPSC CSE
Topics Covered
- Intergovernmental Panel on Climate Change
- Millenium Challenge Corporation
- Montreux Agreement
- Second Advanced Estimates
1 . Intergovernmental Panel on Climate Change
Context : The latest report of the Intergovernmental Panel on Climate Change (IPCC) has warned of multiple climate change-induced disasters in the next two decades even if strong action is taken to reduce the emissions of greenhouse gas emissions. It has said the ability of human beings, and natural systems, to cope with the changing climate was already being tested, and further rise in global warming would make it even more difficult to adapt. Noting that over 3.5 billion people, over 45% of the global population, were living in areas highly vulnerable to climate change, the report identifies India as one of the vulnerable hotspots, with several regions and important cities facing very high risk of climate disasters such as flooding, sea-level rise and heat-waves.
About the report
- The latest warnings have come in the second part of IPCC’s Sixth Assessment Report which talks about climate change impacts, risks and vulnerabilities, and adaptation options. The first part report was released in August last year. That one was centred around the scientific basis of climate change. The third and final part of the report, which will look into the possibilities of reducing emissions, is expected to come out in April.
- The Assessment Reports, the first of which had come out in 1990, are the most comprehensive evaluations of the state of the earth’s climate. Hundreds of experts go through every available piece of relevant, published scientific information to prepare a common understanding of the changing climate. The four subsequent assessment reports, each thousands of pages long, came out in 1995, 2001, 2007 and 2015. These have formed the basis of the global response to climate change.
Details of the Report
- The latest report has, for the first time, made an assessment of regional and sectoral impacts of climate change. It has included risks to, and vulnerabilities of, mega-cities around the world. For example, it has said Mumbai is at high risk of sea-level rise and flooding, while Ahmedabad faces serious danger of heat-waves. Such granular information was not available in previous assessment reports. Flooding in Mumbai and heat-waves in Ahmedabad are common occurrences. What this report has done is to look at granular data affecting these events, and quantified these risks, so that there is a much clearer understanding of the threats posed to these cities.
- Also for the first time, the IPCC report has looked at the health impacts of climate change. It has found that climate change is increasing vector-borne and water-borne diseases such as malaria or dengue, particularly in sub-tropical regions of Asia. It has also said deaths related to circulatory, respiratory, diabetic and infectious diseases, as well as infant mortality, are likely to increase with a rise in temperature. Increasing frequency of extreme weather events like heatwaves, flooding and drought, and even air pollution was contributing to under-nutrition, allergic diseases and even mental disorders.
- The report has said the impacts of climate change were far greater, more frequent and vastly more disruptive than previously understood. The report has said that while strong actions to reduce greenhouse gas emissions in the near term, in the next 20 years, would substantially reduce the threats, and the projected damages, they would not eliminate them all. If the temperature rise crossed the threshold of 1.5°C from pre-industrial times, then many changes could be irreversible.
- The need to take adaptation measures is therefore very important, the report has stressed. It has recognised progress being made to adapt to the new situation, but pointed out that, in most places, it was nowhere close to what is required to be done. It has said the gaps in adaptation was a result of lack of funds and political commitment, and also the absence of reliable information and a sense of urgency.
- It has pointed out that there were “feasible and effective” adaptation options which could reduce the risks to people and nature. But the effectiveness of these options decreases sharply with further increases in temperature.
- “Adaptation is essential to reduce harm, but if it is to be effective, it must go hand in hand with ambitious reductions in greenhouse gas emissions because with increased warming, the effectiveness of many adaptation options declines,” the report has said.
Key Observation about India
- Lucknow and Patna, according to one of several studies cited in the IPCC report, are among the cities predicted to reach wet-bulb temperature (a metric of humidity) of 35°C if emissions continued to rise.
- Bhubaneswar, Chennai, Mumbai, Indore, and Ahmedabad are identified as at risk of reaching wet-bulb temperatures of 32-34°C with continued emissions.
- Overall, Assam, Meghalaya, Tripura, West Bengal, Bihar, Jharkhand, Odisha, Chhattisgarh, Uttar Pradesh, Haryana and Punjab will be the most severely affected, but if emissions keep rising, all States will have regions that experience wet-bulb temperature of 30°C or more by the end of the century.
About IPCC
- The Geneva-based IPCC is the United Nations body for assessing the science related to climate change.
- It was created “to provide policymakers with regular scientific assessments on climate change, its implications and potential future risks, as well as to put forward adaptation and mitigation options”.
- This is the first time that the IPCC, whose job it is to assess already-published scientific literature to update our knowledge of climate change science, has focused its attention solely on the land sector. It is part of a series of special reports that IPCC is doing in the run-up to the sixth edition of its main report, blandly called the Assessment Reports, that is due around 2022.
- Last year, the IPCC had produced a special report on the feasibility of restricting global rise in temperature to within 1.5 degrees Celsius from pre-industrial times. These reports were sought by governments to get a clearer picture of specific aspects of climate change.
Benefits of IPCC reports
- IPCC reports form the scientific basis on which countries across the world build their policy responses to climate change. These reports, on their own, are not policy prescriptive: They do not tell countries or governments what to do. They are only meant to present factual situations with as much scientific evidence as is possible. And yet, these can be of immense help in formulating the action plans to deal with climate change.
- The detailed nature of this latest report, with respect to regional and sectoral impacts, presents actionable intelligence, particularly for countries that lack the resources or the capacity to make their own impact assessments. The fact that these findings are the product of the combined understanding of the largest group of experts on climate science lends it a credibility greater than any individual study.
- These reports also form the basis for international climate change negotiations that decide on the responses at the global level. It is these negotiations that have produced the Paris Agreement, and previously the Kyoto Protocol.
2 . Millenium Challenge Corporation
Context : On February 27, the Nepal parliament approved the Millennium Challenge Corporation Nepal Compact — a $500-million grant from the United States for electricity transmission and road development projects, after five years of keeping it on hold. The grant was ratified with an imperative declaration attached to it.
About the Declaration
- The declaration states that the U.S. grant is not part of the Indo-Pacific strategy and Nepal’s Constitution would be above the provisions of the grant agreement.
- It also mentions that the grant will solely be perceived as an economic assistance. Political parties and civil society have been divided on the U.S. grant for various reasons.
What is the Millennium Challenge Corporation?
- The Millennium Challenge Corporation (MCC) is an independent U.S. foreign aid agency, which was established in 2004 by the country’s Congress to offer “time-limited grants promoting economic growth, reducing poverty, and strengthening institutions,” to low and lower-middle income countries through a selection process.
- While this is the current official definition of the aid body, MCC was proposed by the George Bush administration post the 9/11 terrorist attack, as a tool to counter global poverty and international terrorism, citing the rationale that poverty and terrorism are linked.
- MCC selects countries to award grants through a selection process, which involves evaluating the country’s performance on 20 policy indicators ranging from control on corruption to government effectiveness.
- The MCC offers assistance in three forms. In the form of compacts, meaning large, five-year grants; concurrent compacts or “grants that promote cross-border economic integration”, and threshold programs, which are smaller grants aimed at policy reform. The aid being offered to Nepal is in the form of a compact; the MCC has so far approved about 37 compacts for 29 countries, worth a total of over $13 billion.
What is the MCC Nepal Compact?
- In 2014, after meeting 16 of the 20 policy indicators on which MCC selects countries, Nepal had qualified for a compact, the agreement for which it later signed in 2017.
- Under the compact, the U.S. government, through MCC, would provide a grant of $500 million to Nepal for energy transmission and road development projects, with the latter also chipping in $130 million from its exchequer. The power project proposed in the compact is a 300-400 km long energy transmission line with a capacity of 400 kilovolt, along a power corridor starting from the northeast of Kathmandu and ending near Nepal’s border with India. The project also involves building three power substations along the line. Besides, the grant money is also intended for a ‘road maintenance project’ which will upgrade roads on the east-west highway, spread across 300 kms.
- While the compact says the energy project is meant to augment power generation and economic growth for Nepal, it also states that it will facilitate cross-border electricity trade with India. Before the work on the projects can begin however, the bill has to be formally accepted or ratified in the country’s parliament.
- Both the U.S. and Nepal governments have said that it is a ‘no strings attached’ grant, which would not have any conditions, or require repayment and interest payment. However, section 7.1 of the agreement says it will “prevail” over the domestic laws of Nepal and section 6.8 grants immunity to MCC staff in “all courts and tribunals of Nepal.” The U.S. Embassy in Nepal described the compact this month as a “gift” from the American people and a “partnership” between the two countries that will “bring jobs and infrastructure to Nepal and improve the lives of Nepalis.”
What is the dispute around the MCC grant?
- As per the initial agreement, the compact should have come into effect by 2019, but skepticism, politics and now protests, made its course rocky.
- The U.S. had been increasing its pressure on Nepal to ratify the agreement, with the Biden administration’s Assistant Secretary of State for South and Central Asia, Donald Lu, calling the Nepal Prime Minister Sher Bahadur Deuba on February 10, giving a deadline to ratify the MCC compact in parliament by February 28, or the U.S. would have to “review its ties with Nepal.” There have been instances in the past where the U.S. has terminated such compacts with countries for different reasons.
- Nepali political parties have been divided on the MCC agreement over fears it would undermine Nepal’s sovereignty by pulling it into the US’s Indo-Pacific Strategy (IPS), which focuses on countering China– a country Nepal has close ties with. The compact is also seen by some observers as America’s answer to China’s Belt and Road initiative, a road development program that the Nepal government signed in 2016.
- In May 2019, U.S. State Department’s Assistant Secretary for South Asia, David J Ranz, on his visit to Nepal had said that MCC was an important part of the IPS. Besides, the US’s November 2019 report clearly states that assistance under the MCC compact is a part of IPS. This further strengthened the skepticism of some of Nepal’s parties, that the compact would go against its constitution, which binds the country to a strong principle of non-alignment.
3 . Montreux Agreement
Context : Turkey has officially labeled Russia’s invasion of Ukraine as a war and says it will restrict some warships from passing through key waterways, in a move that experts said could potentially hinder some of Moscow’s military activities in the region. Ukraine’s ambassador to Turkey Vasyl Bodnar went on local television last week and appealed for the government in Ankara to close its key straits to Russian warships under provisions of the 1936 Montreux Convention. Turkey said it could only do so if it officially recognized the conflict as a war, and on Sunday, that’s what it did.
Background
- The Bosporus and Dardanelles straits, also known as the Turkish Straits or the Black Sea Straits, connect the Aegean Sea and the Black Sea via the Sea of Marmara. It is the only passage through which the Black Sea ports can access the Mediterranean and beyond.
- Over three million barrels of oil, about three per cent of the daily global supply, mostly produced in Russia, Azerbaijan, and Kazakhstan, pass through this waterway every day. The route also ships large amounts of iron, steel, and agricultural products from the Black Sea coast to Europe and the rest of the world.
What is the Montreux Convention?
- According to the 1936 Montreux Convention Regarding the Regime of the Straits, often referred to simply as the Montreux Convention, Turkey has control over both the Bosporus and Dardanelles straits.
- In peace time, warships can pass the straits by prior diplomatic notification with certain limitations on the weight of the ships and arms they carry — and depending on whether the ship belongs to a Black Sea nation or not. And at times of war, Turkey can bar the passage of the warships of belligerent parties from crossing.
- According to the convention, if Turkey is a party to the war or considers itself threatened with imminent danger, it can shut down the straits to the passage of warships.
Exception
- Article 19 of the treaty contains an exception for the countries on the Black Sea that can effectively undermine Turkey’s power in blocking the Russian warships entering or exiting the Black Sea: “Vessels of war belonging to belligerent powers, whether they are Black Sea Powers or not, which have become separated from their bases, may return thereto,” it says.
- That means warships can return to their original bases through the passage and Turkey cannot prevent it.
- The official assignment of a ship to a port determines whether it has the right to pass through the Straits or not. The official assignment, according to theInternational Maritime Organisation (IMO) falls under the authority of the state that owns the ships. Therefore, another possible way for Russia to exploit the Montreux Convention, would be to reassign some of its vessels to the Black Sea.
4 . Second Advanced Estimates
Context : On Monday, the Ministry of Statistics and Programme Implementation (MoSPI) released the Second Advance Estimates (SAEs) of GDP for the current financial year. These are an update over the First Advance Estimates (FAEs) released on January 7. The key difference between the two is that the SAEs are arrived at by incorporating the GDP data for Q3 (October to December).
Revisions of GDP estimates
- For each financial year, say 2021-22, the GDP estimates go through several rounds of revisions. Each year on January 7, MoSPI releases the FAEs. Then in February end, after incorporating the Q3 data, come the SAEs. By May-end come the Provisional Estimates after incorporating the Q4 (Jan to March) data. Then, in end-January 2023, MoSPI will release the First Revised Estimates for FY22.
- These will be followed by the Second Revised Estimates (by Jan-end 2024) and the Third Revised Estimates (by Jan-end 2025). Each revision benefits from more data, making the GDP estimates more accurate and robust.
Three Main Engines of Growth
- India’s overall GDP has three main engines of growth.
- The biggest is Private Final Consumption Expenditure (PFCE), the money that everyone spends in their personal capacity, and accounts for over 55% of GDP.
- The second biggest is the money spent by private firms (and, to a small degree, the government) towards increasing productive capacity. This is investment expenditure. Shown as Gross Fixed Capital Formation (GFCF), it accounts for around 33% of GDP.
- Then comes the money spent by governments towards their consumption (as against their investments). This is the Government Final Consumption Expenditure (GFCE).
Difference between FAE and SAE
- Based on FAEs, the key observations about the nature of India’s recovery were:
- Overall GDP was expected to go past the pre-Covid level.
- Recovery was driven by higher investments — as evidenced by the spike in GFCF.
- The main worry was poor levels of PFCE, which was well below the pre-Covid levels — an effect of the ‘K-shaped’ recovery. The same held true for per capita personal expenditure as well as per capita GDP (or income).
- According to the FAE overall GDP is likely to be back at pre-Covid levels, but private income and expenditures are far below pre-Covid levels. This will imply weak consumer demand, and, before long, rob businesses of the incentive to continue investing.
- But the altered distribution of the sub-components has changed the evolving story. Even though overall GDP and per capita GDP (read income) have not changed much, PFCE and per capita PFCE (read expenditure) have jumped. GFCE and GFCF show a commensurate decline in SAEs (over FAEs).
- Overall, all components are above the pre-Covid level and they are being led by private demand, which augurs well for the future.