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11th August Current Affairs

The new U.S. Bill on climate action

(GS-II & III: Climate change, laws to govern global warming, regional and global grouping for climate action etc)

In News:

The S. Senate approved a Bill titled the Inflation Reduction Act (IRA) 2022 with a focus on climate, healthcare and tax provisions to address inflation.

Details:

The bill is a scaled-down version of President Biden’s Build Back Better Act (BBBA), which failed to get approval from the Senate.

What are the climate change provisions?

Package for the clean energy transition: The Bill marks the largest American investment aimed toward making the U.S. a leader in clean energy.

It includes packages worth $369 billion for the clean energy transition.

The Bill provides significant investment in renewable energy through heavy tax credits for wind and solar energy projects and electric vehicles.

Tax deduction to low and middle-income households: It provides a tax deduction to low and middle-income households to go electric and seeks to lower the energy bills of American households.

Bolster domestic production: It also aims to bolster the domestic production of heat pumps and critical minerals.

Tax on large and profitable companies to meet the green investment

Methane fee: It also imposes a fee on methane leaks from oil and gas drilling.

At the same time, the Bill also aims at more investments in fossil fuels.

Expand oil and gas drilling: It seeks to expand oil and gas drilling, with the federal government offering land for onshore and offshore drilling with the prerequisite that the entity will develop renewable energy.

Thus, it handcuffs the expansion of oil and gas with renewable energy development.

Issues with the bill:

Issues of fossil industry: Fossil fuel supporters criticize the bill as it does not take into account the communities that are dependent on the fossil fuel industry for their income.

Workers of coal plants: A protest by the workers of a coal plant in the state of West Virginia was recorded after their own Senator Joe Manchin agreed to back the bill.

Provisions for fossil fuels: Climate advocates criticise the bill for coupling the development of renewable energy, which is the cause of global warming, with land leasing for oil and gas drilling.

The Bill still contains giveaways to the fossil fuel sector.

Similar climate packages announced by other countries:

Invest in Kisida by Japan: In May 2022, Japan announced its ‘Invest in Kisida’ plan which aims for a $1.1 trillion investment to bolster the Japanese economy.

As part of the plan, the country aims to transition to clean energy and achieve a 46% reduction in greenhouse gas emissions by 2030.

Fit for 55 by EU: In June 2021, the European Union (EU) proposed a similar ‘Fit for 55’ plan to reduce emissions by 55% by 2030.

The plan is expected to become law soon.

Conclusion:

Turning point for global climate action: Thus, the Bill can prove to be a turning point for global climate action as the S. is one of the largest emitters of greenhouse gases globally.

However, it does not address any issues of global climate finance which is a major impediment to global climate action.

Achieving Paris Agreement: It is a mere step toward achieving the climate target agreed upon in the Paris Agreement, where Article 2 states global temperature should be limited to below 2°C.

Benchmark for other emitters: Even though the Bill is not enough to address the climate crisis, such historic initiatives by global leaders in greenhouse gas emissions can be a benchmark for other large emitters to push their climate action programmes.

Centre releases 1.16 lakh cr. to States

In News:

Central government released funds (double the usual amount) to help front-load State governments’ capital spending abilities in this financial year, after the expiry of the assured Goods and Services Tax (GST) compensation to States from this July.

Details:

Front-loaded approach by the Centre: In order to incentivize States to increase their capital expenditure, to spur spending and growth.

States get revenue from the Center:

Devolution (States’ share of taxes):As state’s share of taxes from the Gross Tax Revenue (extra-budgetary)

Scheme Related Transfer: As Centrally Sponsored Schemes from the Scheme Expenditure. (Based on Budget Allocations).

Finance Commission Grants: As Transfer to States from the Transfers, Expenditure, and Other Expenses. (Based on Budget Allocations)

Other Transfers: Other grants or loans. (Based on Budget Allocations)

15th Finance Commission’s recommended:

Vertical Devolution (Union to States): States’ share in the divisible pool of taxes to 41%for the five-year period starting 2021-22.

Horizontal Devolution (allocation between the states): The commission suggested 12. 5% weightage to demographic performance, 45% to income, 15% each to population and area, 10% to forest and ecology and 2.5% to tax and fiscal efforts.

Rule 267

In News:

In his parting address, Vice-President M. Venkaiah Naidu advocated against indiscriminate demand from members to invoke rule 267 that allows for the suspension of the day’s business to discuss other important issues in the Parliament.

Details:

Issues: Rule 267 of Rajya Sabha should be resorted to in the rarest of the rare cases that justify the suspension of other rules of the house.

Status of house disruptions: For the first 17 years since 1978, the annual productivity of the Rajya Sabha has been more than 100%. Since then it has been on a downslide with the lowest annual productivity recorded at 40% in the year 2018.

Challenges faced by parliamentarians:

Disruptions don’t allow members to speak in the House, thereby reducing their enthusiasm to speak.

Low percentage of members attending the meetings of standing committees

One who makes a reasonably good speech — well argued and supported by statistics, examples or case studies — rarely get adequate attention.

Only the politics of pandemonium(Chaos) grabs headlines in the news.

What can be done:

Presiding officers can conduct what is called in-camera proceedings in their chambers, especially for Zero Hour and Question Hour.

Cooperatives on Government e-Marketplace (GeM)

In News:

Cooperatives have been onboarded to the GeM portal, thus allowing them to procure like other government agencies. Until now, cooperatives were purchasing from the open market.

Details:

GeM is a one-stop portal for the online procurement of goods and services. It has been developed by the Directorate General of Supplies and Disposals (Ministry of Electronics)

About cooperatives:

Def: It is a voluntary association of individuals having common needs who join hands for common economic interests.

Based on the principle of: Voluntary and open membership, Autonomy to members, Aimed at community concerns.

A separate ‘Ministry of Co-operation’has been created by the Central Government for realizing the vision of ‘Sahkar se Samriddhi’ (Prosperity through Cooperation)

Consztitutional provisions:

  • Under the ‘state list’ of the 7th schedule
  • Forming a cooperative is a fundamental right under Art19(1)(c) and states must promote cooperatives (Art 43-B)
  • 97th A Act 2011 added a new part PartIXB regarding cooperative working in India.

History:  The first credit cooperative society was formed in Banking in 1903. Cooperative got a legal status with the enactment of the Cooperative Credit Societies Act, 1904.

Electricity (Amendment) Bill 2022

(GS-III: Infrastructure- Energy)

In News:

The government has tabled the Electricity (Amendment) Bill 2022 in the Lok Sabha and then referred it to the parliamentary standing committee on energy for wider consultation.

Details:

Electricity Amendment Bill,2022 amends the previous Electricity Act of 2003.

Electricity Act, 2003 regulates the electricity sector in India by setting up the Central and State Electricity Regulatory Commissions (CERC and SERCs) to regulate interstate and intrastate matters, respectively.

Provisions of the Bill:

Benefits for consumers:

Allows multiple Discoms in the same area: More than one power distributor can operate in an area. This is aimed at boosting competition and giving more choice to the consumers. The new supplier can use existing supply lines.

Regulator must decide in 90 days or the application will be deemed to be approved.

It will end distribution monopolies and improve the viabilities of business.

Benefit for DISCOMs:

Fixing of Tariffs:There will be “mandatory” fixing of minimum as well as maximum tariff ceilings by the “appropriate commission” to avoid predatory pricing by power distribution companies and to protect consumers.

It aims to ensure graded and timely tariff revisions.

Benefits for remote areas and farmers:

Cross-subsidy Balancing Fund: Cross-subsidy refers to the arrangement of one consumer category subsidizing the consumption of another consumer category. E.g. commercial consumers subsidies residents or farmers. The state government will set up such a fund.

Benefit for Environment:

  • Renewable purchase obligation(RPO):Under the previous act SERCs are empowered to specify renewable purchase obligations(RPO) for discoms. RPO refers to the compulsory procurement of a certain percentage of electricity from renewable sources.
  • As per the Bill, RPO should not be below a minimum percentage prescribed by the central government or DISCOMS may face a penalty.
  • Promotion of green energy

Improved regulation: The Bill seeks to strengthen payment security mechanisms and give more powers to regulators.

Issues with the Bill:

Violates Federal Principal: ‘Electricity’ is a state subject and any legislation on it should be in consultation with the state government. However, no consultation was done before introducing the bill.

Inequity: Provision to encourage competition may lead to more entities entering lucrative and urban areas, while loss-making areas may continue to be underserved.

Fear of end of subsidies by farmers.