Sovereign Green Bonds: What do they mean for investors, and the environment? (GS Paper 3, Economy)
Why in news?
- Recently, the Reserve Bank of India (RBI) auctioned maiden sovereign green bonds (SGrBs) worth Rs 8,000 crore.
- This is part of the Rs. 16,000 crore Sovereign Green Bond auction that the RBI will conduct in the current financial year.
What are Green Bonds?
- Green bonds are bonds issued by any sovereign entity, inter-governmental groups or alliances and corporates with the aim that the proceeds of the bonds are utilised for projects classified as environmentally sustainable.
- The framework for the sovereign green bond was issued by the government on November 9, 2022.
- The RBI is auctioning two green bonds with tenures of 5 and 10 years, worth Rs 4,000 crore each.
Why are these bonds important?
- Over the last few years, Green Bonds have emerged as an important financial instrument to deal with the threats of climate change and related challenges.
- The climate change threatens communities and economies, and it poses risks for agriculture, food, and water supplies. A lot of financing is needed to address these challenges.
- It’s critical to connect environmental projects with capital markets and investors and channel capital towards sustainable development and Green Bonds are a way to make that connection.
How beneficial is it for investors?
- Green Bonds offer investors a platform to engage in good practices, influencing the business strategy of bond issuers.
- They provide a means to hedge against climate change risks while achieving at least similar, if not better, returns on their investment. In this way, the growth in Green Bonds and green finance also indirectly works to disincentivise high carbon-emitting projects.
When did the Govt plan these bonds?
- In August 2022, the government said it stands committed to reducing Emissions Intensity of GDP by 45 per cent from the 2005 level by 2030, and achieving about 50 per cent cumulative electric power installed capacity from non-fossil fuel-based energy resources by the same year.
- In line with the commitment to significantly reduce the carbon intensity of the economy, the Union Budget 2022-23 made an announcement to issue Sovereign Green Bonds.
- The issuance of the Sovereign Green Bonds will help the Indian government in tapping the requisite finance from potential investors for deployment in public sector projects aimed at reducing the carbon intensity of the economy.
Where will the proceeds go?
- The government will use the proceeds raised from SGrBs to finance or refinance expenditure (in parts or whole) for various green projects, including renewable energy, clean transportation, energy efficiency, climate change adaptation, sustainable water and waste management, pollution and prevention control and green buildings.
- In renewable energy, investments will be made in solar, wind, biomass and hydropower energy projects.
Reviews explore impacts of Amazon deforestation
(GS Paper 3, Environment)
Why in news?
- Researchers emphasize the quick and dramatic changes occurring in the Amazon as a result of growing human activities in two distinct reviews.
- They examine what is known about the drivers and consequences of the region’s continuous deforestation and landscape degradation, as well as what needs to be done to avoid the worst results.
Amazon rainforest:
- The Amazon rainforest is one of the most important yet endangered main ecosystems on the planet.
- It supports almost one-third of all known species and provides critical global ecosystem services that help regulate the planet’s carbon and water cycles.
Threats:
- However, modern agricultural and industrial activities, as well as broader anthropogenic climate change, are deteriorating Amazonian habitats at an unprecedented rate.
- Fluctuating on the brink of irreversible change, continuous forest loss threatens to drive the Amazon above a crucial threshold, with far-reaching consequences for the entire Earth system.
One Review:
- They summarize key findings from the 2021 Science Panel for the Amazon (SPA) Assessment Report, demonstrating how human activities such as regional deforestation are changing Amazonian ecosystems hundreds to thousands of times faster than any naturally occurring climatic or geological phenomenon has in the past, far too quickly for Amazonian species, peoples, and ecosystems to adapt.
- The transformative policy actions are required to prevent these outcomes and reduce the global economy demands that largely drive deforestation
Second Review:
- They evaluate the proximate and underlying drivers and consequent impacts of Amazon forest degradation.
- While most analyses of land use and land-cover change in tropical forests have centred on the causes and effects of deforestation, they focus on other, lesser-studies anthropogenic disturbances, including fire, habitat fragmentation, selective logging, and extreme drought due to human-induced climate change.
Conclusion & Way Forward:
- Roughly 2.5 million kilometres of the Amazon forest (roughly 38 per cent of all remaining forests in the region) are currently degraded by these impacts.
- Carbon emissions from this degradation are equal to, if not greater, than emissions from deforestation and will remain a dominant source of carbon emissions regardless of deforestation rates.
- As a result, not only are deforestation policies needed but they must also be complemented with measures to address the disturbances that degrade the Amazon environment.
ASI should come up with substantive criteria: EAC on national monuments
(GS Paper 1, Culture)
Why in news?
- Recently, in a report titled ‘Monuments of National Importance - Urgent Need for Rationalisation’, the Economic Advisory Council to the Prime Minister (EAC-PM) pointed out that expenditure on the conservation and maintenance of monuments of national importance is inadequate.
Recommendations:
- Archaeological Survey of India (ASI) should come up with substantive criteria and a detailed procedure for declaring monuments to be of national importance.
- It also should publish a book of notifications with detailed information about the provenance of all Monuments of National Importance (MNI).
- It also recommended that the proceeds from these monuments should vest with the implementing bodies.
- It also recommended that minor monuments and antiquities protected as monuments should be denotified as MNI and monuments with local importance should be transferred to respective states for protection.
MNI:
- India currently has 3,695 MNI that are under the protection of ASI.
- The Ancient Monuments and Archaeological Sites and Remains Act (AMASR Act), 1958, (amended in 2010) provides for the declaration and conservation of ancient and historical monuments and archaeological sites and remains of national importance.
Need for review:
- A large number of the present list of MNI were identified as such before 1947 under colonial-era laws. No attempts were made to comprehensively review the list after independence.
- The EAC-PM is of the view that an effort should be made to restore geographical balance in the list of MNI.
- Around 75 British cemeteries/graves are considered as 'monuments of national importance'.
- Also, various monuments declared as MNI are of local importance and do not necessarily have national significance per se and 24 monuments of national importance are untraceable.
- Over 60 per cent of MNI are located in just 5 states - Uttar Pradesh, Karnataka, Tamil Nadu, Madhya Pradesh and Maharashtra.
- While the city of Delhi alone has 173 MNI, states like Telangana (8), Bihar (70), and Odisha (80) have disproportionately fewer MNI.
