Pathway to "low emissions" in India

• At the United Nations Conference of Parties (COP) in Sharm el-Sheikh, Egypt, India recently announced its long-term strategy to transition to a "low emissions" pathway.

More information on LT-LEDs (Long Term-Low Emission Development Strategy) are as follows:

Attaining the net-zero goal:

• Every country must submit a long-term strategy outlining how it intends to achieve its net-zero goal.
• Developed countries must achieve net-zero status by 2050; China has decided to do so by 2060, and India has set the target year of 2070.

LT-LEDs from India:

• Global carbon budget: India's long-term development strategy must be viewed in the context of its "right to an equitable and fair share of the global carbon budget."

Transitional details:

• India has detailed the types of transitions it is seeking to make in the electricity, transportation, building, and forest sectors, as well as the research and development efforts and financing required to make these transitions.

India has not provided any specifics:

• Unlike some other countries that have submitted long-term strategies, India has avoided mentioning specific details such as numbers, mid-term targets, scenarios, pathways, or projections in its journey to net-zero.
• For example, India has stated that it will achieve decarbonisation in the transportation sector through improved fuel efficiency, the adoption of electric vehicles and cleaner fuels, and the promotion of public transportation.
• However, it makes no mention of any intermediate goals or the amount of money that will be invested to achieve this.

Finances:

• The strategy paper provides various estimates of the financing required for India's transition to a low-carbon economy compatible with achieving net-zero status by 2070.

Challenges:

Financial requirement:

• To achieve the promised net-zero status, India will require "tens of trillions of dollars" by 2050 to transition to a low-carbon development path.
• It claims that India will require large sums of money for adaptation as well, despite the fact that it will be "substantially more difficult to quantify."

Money source:

• According to the document, the funds must come from both domestic and international sources, both public and private.
• The document also mentions the lack of adequate climate finance from developed countries, as required by the Paris Agreement.

Conference of Parties(COP):

• It is the UNFCCC's highest decision-making body.
• The goal of the agreement is to keep global warming well below 2°C, preferably 1.5°C, compared to pre-industry levels.

NDCs (Nationally Determined Contributions):

• To meet the agreement's targets, member countries must submit their own targets that they believe will result in significant progress toward the Paris temperature goal.
• These targets are initially referred to as Intended Nationally Determined Contributions (INDCs).
• When a country ratifies the agreement, they are converted to NDCs.

India's Revised Pledge:

• According to the updated NDC, India is now committed to reducing the emissions intensity of its GDP by 45 percent by 2030 from 2005 levels.
• The country will also aim for non-fossil fuel-based energy resources to account for approximately half of total installed capacity by 2030.
• 'LIFE' 'Lifestyle for Environment' as a key to combating climate change" has been added to India's NDC to promote a healthy and sustainable lifestyle.

What does the term "Net Zero" mean?

• Net Zero State is a state in which a country's emissions are offset by the absorption and removal of greenhouse gases (GHGs) from the atmosphere; it is also known as carbon neutrality.
• It is accomplished through both natural processes and futuristic technologies such as carbon capture and storage.

Other Difficulties

The developed countries' failure:

• The developed countries' continued failure to meet their long-standing commitments in finance and technology is expected to make even the current transitions much more difficult.
• Environmental shocks: Cropping patterns are changing, there are floods, and there is a great need to make agriculture resilient to these shocks.

Carbon budget for the world:

• To limit the increase in global average temperature from pre-industrial levels to those agreed upon in the Paris Agreement, global cumulative carbon dioxide emissions must be capped at the global carbon budget.

Arguments against setting a net-zero goal include:

• Poorer Indian states such as Chhattisgarh, Odisha, Jharkhand, West Bengal, Madhya Pradesh, and Uttar Pradesh will suffer significant revenue losses.
• Mining accounts for nearly 15% of state revenue in states such as Chhattisgarh and Jharkhand.
• These states would lose jobs because new jobs in the renewable sector would be created in western and southern India, where solar and wind resources are more abundant.

Approaching Action Plans in the Future

• First, climate change is a global issue that requires international cooperation.
• Second, it requires rules that are fair and just to both the rich and the poor.
• Third, science clearly shows that humans are to blame for the global temperature rise, and that this rise will result in more and more variable and extreme weather events, similar to what we are currently experiencing.
• Four, each country's responsibility for the stock of emissions already in the atmosphere — the historical cumulative emissions

Summit on Leadership for Industry Transition

• On the sidelines of COP27 in Sharm El Sheikh, Egypt, India and Sweden hosted the Leadership for Industry Transition (LeadIT) Summit.
• Following the summit, the LeadIT Summit Statement 2022 was made public in the India Pavilion at COP27.

What are the Summit's Highlights?

• Members of LeadIT reaffirmed their commitment to pursuing the low-carbon transition.
• The event featured roundtable discussions on finance and other cross-sectoral issues, as well as perspectives on the requirements for successful low-carbon transitions.
• Members also agreed to help new members and emerging economies with technical assistance. The significance of de-risking investments in heavy industry transition in emerging and developing countries was also emphasised.
• The summit concluded with the members of LeadIT adopting the summit statement.

What is LeadIT?

• The LeadIT initiative focuses on hard-to-abate sectors that are key stakeholders in global climate action and require specific interventions.
• It brings together countries and businesses that are committed to implementing the Paris Agreement.
• It was launched in 2019 at the UN Climate Action Summit by the governments of Sweden and India, and it is supported by the World Economic Forum.
• LeadIT members believe that energy-intensive industries can and must progress on low-carbon pathways, with the goal of reaching net-zero carbon emissions by 2050.

Members:

LeadIT has 37 members in total, including countries and businesses.

Read Also: Pathway to low emissions in India

About Vostro and Nostro Accounts

The Reserve Bank of India (RBI) has approved the opening of nine Special Vostro Accounts with two Indian banks, UCO and IndusInd Bank, to facilitate rupee trade overseas.

Regarding the Vostro account

• It is an account held by a domestic bank for a foreign bank in the domestic bank's currency, which in India is the rupee.
• Payments in rupee for the export and import of goods will be made to these Vostro accounts in the case of trade with Russia. The exporters and importers in both countries will be the owners and beneficiaries of this money.
• Banks will keep track of all money transfers.

What prompted the establishment of the Vostro accounts?

• In July, the RBI established a mechanism to settle international trade in rupees "to promote growth of global trade with a focus on Indian exports and to support the growing interest of the global trading community in the rupee."
• The move by the Central Bank follows increased pressure on the Indian currency as a result of Russia's invasion of Ukraine and sanctions imposed by the US and the EU.

Facts

• There are two kinds of accounts: Vostro and Nostro
• Both Vostro and Nostro are technically the same type of account, with the difference being who opens the account and where.
• So, if an Indian bank like the SBI wants to open an account in the United States, it will get in touch with a bank in the US, which will open a Nostro account and accept payments for SBI in dollars.
• The account opened by the Indian bank in the US will be a Nostro account for the Indian bank, while for the US bank, the account will be considered a Vostro account.
• Literally, Nostro means ‘ours’ and Vostro means ‘yours’ in Latin. Therefore, the accounts opened by IndusInd and UCO are Vostro, and the ones opened by Russia’s Sberbank and VTB Bank are Nostro accounts

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