Editorial 1: Who pays for the clean-up
Context:
- Historically, the primary responsibility for climate change been with the advanced economies, and their process of industrialisation. The contribution of the poorer countries (the Global South) was negligible.
Historical responsibilities under United Nations Framework Convention on Climate Change:
- The Kyoto Protocol under United Nations Framework Convention on Climate Change recognised the “common but differentiated responsibilities” in the fight against climate change.
- Successor of Kyoto Protocol Paris Agreement, asked countries to set voluntary emission targets but required the richer countries to make financial transfers to the developing economies for the latter to cope (that is to reduce emissions and adapt to the negative effects of climate change) with the problem
- It set a floor of $100 billion per year for these transfers. This was supposed to be over and above 0.7 per cent of their national income which was the overseas development aid
Under the climate finance, commercial loans should not be counted
- In the definition of climate finance, commercial loans should not be counted. Countries of the Global South were already under the burden, servicing their external debt which are exacerbated by the pandemic.
- To pile climate change borrowing on top of it is unconscionable. In 2020, $83 billion was paid into the climate finance fund to be transferred to the countries of the Global South, of which less than $25 billion was in the form of grants. The industrialised countries have not walked from its responsibilities of finance.
- Recently, France has convened a summit for a “New Global Financing Pact” in Paris on June 22 and 23. This seeks to provide finance for tackling climate change (and poverty alleviation) in the Global South. I am not holding my breath about its outcome, given the recent history of empty promises on the flow of funds to the Global South.
Carbon Border Adjustment Mechanism (CBAM), A significant steps towards reduction of Grene house gas emissions (GHGs)
- Recently, the European Union (EU) has put forward a proposal, called the Carbon Border Adjustment Mechanism (CBAM). The US, Canada and Japan are planning similar measures.
- It involves imposing tariffs on imports from other countries that are seen to be using carbon-intensive methods of production.
Arguments against CBAM and its significance:
- It is argued that the stringent environmental regulation in the EU makes the production of polluting industries move to countries with relatively lax regulation
- These sectors will contract in countries where carbon is priced higher, causing a “carbon leakage”.
- However, A tariff on the import of these goods by the EU would restore competitive parity to the domestically produced goods that are subject to a higher price of carbon.
- The CBAM is expected to achieve three objectives.
- First, reduce EU’s emissions;
- second, for the EU not to lose competitiveness in carbon-intensive goods; and
- third, to make the targeted countries reduce the carbon intensity of their exports.
- This mechanism, starting in 2026, will cover products such as cement, steel, aluminium, oil refinery, paper, glass, chemicals and electricity generation.
- The countries most affected will be Russia, Ukraine, Turkey, India and China (the UK, though outside the EU, has regulations similar to the EU’s). Only three of the 12 exporters to the EU, have a mechanism for “pricing carbon”
What does the international law say about this CBAM implementation?
- GATT of WTO have promoted free trade to prevent the world from slipping back into the anarchy of the inter-war period.
- The CBAM is a unilateral move, against the spirit of multilateralism. The problems of measurement mean that it could be used for protectionism. It targets production processes (not the product itself) that the WTO does not approve of.
- The WTO’s approach is very legalistic and leaves little room for economic arguments. Environmental disputes at the WTO have hitherto been tackled on a case-by-case basis.
- Its dispute settlement system currently is comatose as it does not have the minimum number of judges
- To use the existing rules, a consensus or, at least a majority among members is required. A reform of the WTO is unlikely, but bypassing it would lead to retaliations and trade wars.
Fairness in adopting CBAM to global economy and Global South
- The analytical framework for tackling climate change is based on putting a price on carbon emissions.
- Since the burning of carbon anywhere in the world affects climate change exactly in the same way, we need a global price for carbon to redress this global “externality”
- This would work well if there was a world government. In its absence, who gets to keep the tax revenue is important for example, if the oil producers are allowed to keep it, the consequences resemble an OPEC-like oil price increase, where the revenue from the oil price increase goes to the producers.
- In the case of the CBA, it is the tariff-imposing EU that will keep the revenue it will be used to retire its outstanding debt.
- This mechanism also seeks to penalise “free riders”. A free-rider is one who is not contributing, although has the means to do so, riding on the contribution of others.
Conclusion:
- Even if CBAM ¸overcomes the hurdles of measurement and its incompatibility with WTO, it is targeting the emissions embodied in a limited number of traded goods.
- Its effect on climate change is likely to be small. While the proposal has been touted as a solution to trade and climate issues at one go, there are some difficulties, such as the problem of measurement. It’s designed to help rich countries avoid paying for creating the climate problem.
Editorial 2: Why the draft livestock and livestock products Bill was withdrawn
Recent Context:
- Recently, The Centre has withdrawn the proposed draft of the Live-stock and Live-stock Product (Importation and Exportation) Bill, 2023.
Government’s view on Current bill withdrawal?
- Centre has withdrawn the draft Live-stock and Live-stock Products [Importation and Exportation] Bill, 2023.
- The ministry issued an office memorandum while withdrawing the bill.
- That representations have been made expressing concerns on the proposed draft involving sensitivity and emotions with animal welfare and related aspects, and, hence, would need wider consultation, considering it Bill was withdrawn.
What is the Bill?
- The Bill is meant to replace the Live-stock Importation Act, 1898, and the Live-stock (Amendment) Act, 2001. It frames guidelines for the import and export of live animals, which has raised concerns among animal lovers.
- The Department of Animal Husbandry and Dairying (DAHD) prepared the draft of the Live-stock and Live-stock Products (Importation and Exportation) Bill-2023 and released it in the public domain on June 7, seeking comments and suggestions.
- It is different from the existing law in three key aspects ; it allows export of live animals, it widens the scope of animal import-export (including cats and dogs among ‘live-stock’), and takes away some powers of state governments to regulate this area.
Why does the ministry want to bring a new law?
- The present law that regulates import of live-stock is 125 years old.
- “The Live-stock Importation Act, 1898, being the pre-constitutional/pre-independence Central Act, a need has been felt to align it with the contemporary requirements and prevailing circumstances related to sanitary and phyto-sanitary measures, and its extant Allocation of Business Rules, 1961,”
- In 2001, amended the 1898 law. The Vajpayee government first promulgated an ordinance.
- One of the key changes introduced by the Vajpayee government in the law was inclusion of the import of livestock products. The earlier law dealt with only the import of live-stock.
- According to the ordinance, the “live-stock products” included meat and meat products of all kinds including fresh, chilled and frozen meat tissue; organs of poultry, pig, sheep, goat; egg and egg powder; milk and milk products and any other animal product which may be specified by the Central Government by notification in the Official Gazette.”
- The 2001 amendment also empowered the Centre to “regulate, restrict or prohibit” the trade of any live-stock product that may be liable to affect human or animal health
What is new in the proposed draft?
- The earlier law regulates only importation of live-stock, while the proposed draft Bill has provisions to regulate live-stock exports also. The Section 4 of the proposed Bill provides the government the power to make arrangements for promotion and development of exports of live-stock and live-stock products.
- The draft of the proposed Bill describes it as, “An Act to frame measures for the regulation of the importation of live-stock and live-stock products as well as promotion and development of exports of live-stock and live-stock products.”
- The proposed draft of the Live-stock and Live-stock Product (importation and Exportation) Bill, 2023 has 10 Sections, and has expanded the definition of live-stock to include feline and canines also.
- According to the definition given in the existing law (The Live-stock Importation Act, 1898), “live-stock” includes horses, kine, camels, sheep and any other animal which may be specified by the Central Government by notification in the Official Gazette.”
- However, the proposed draft Bill defines the live-stock as all equines (all live equine irrespective of purpose including donkey, horses, mule, assess, hinnies), bovines, caprines, ovines, swines, canines, felines, avian, laboratory animals, aquatic animals and any other animal which may be specified by the Central Government by notification in the Official Gazette from time to time, except those prohibited in any other act.”
- Besides, the Centre has defined the live-stocks and live-stock products as commodity in the proposed draft Bill. ““Commodity” means live-stock, products of live-stock origin, live-stock genetic material, biological products and pathological material of live-stock origin,” says Section 2(a) of the proposed draft.
Why does the proposed draft Bill face criticism?
- The proposed draft Bill has drawn sharp criticism from various stakeholders. Animal rights organisations have said that the draft Bill will open a “Pandora’s Box” of cruelties on animals.
- “The proposed Livestock and Livestock Products [Importation and Exportation] Bill, allowing the live export of animals from India, is a blanket free pass for the abuse of millions of animals farmed for food and other uses.
Conclusion:
- Withdrawal of current bill by the government signifies taking more time for wider consideration on the bill which will bring inclusive arguments, views and check on cruelty against on animals.