“Striking a Green Balance” is a title that evokes the essential need for harmonizing environmental concerns with economic and social development. In today’s global context, where climate change and environmental degradation pose significant threats, finding this equilibrium is paramount. This editorial will delve into the intricate task of balancing the pursuit of economic growth and ecological sustainability. It will explore the lessons that can be gleaned from Bhutan, a nation that has become a beacon of hope in the fight against climate change by prioritizing Gross National Happiness over Gross Domestic Product, demonstrating that a green balance is not only achievable but also beneficial in the long run.
Tag: GS Paper-3 Environment
Exam View:
About the Carbon Trading Network; Significance of Carbon Credit System; Initiatives of Indian Government towards Carbon Credit trade; Benefits of setting up Indian Carbon Market
Context:
As India develops its economy to meet the growing needs of its people, the country faces a challenge of balancing its climate goals and developmental goals. There is need to curb carbon emissions and adopt practices to mitigate greenhouse gas (GHG) emissions through carbon trade.
Decoding the editorial: The Carbon Trading Network
- Carbon trading network is a market-based approach to reducing greenhouse gas (GHG) emissions. It allows companies that have low or no emissions to sell credits to companies that have high emissions. This offsets the emissions of the polluting company and helps to reduce overall GHG emissions.
- Carbon credits are permits that represent one ton of carbon dioxide or the equivalent amount of another greenhouse gas. They are created to offset the emissions of companies or individuals.
- This mechanism allows a company with low or no emissions to sell credits in the market via a carbon trading framework or carbon exchange.
Significance of Carbon Credit System:
- Carbon credits can assist companies in meeting sustainability targets. These outfits can purchase credits or fund programmes that create carbon credits.
- Mobilisation of resources through transferring of capital from carbon emitters to those who invest in reducing carbon footprints.
- Limited decarbonization avenues for some industries such as cement, chemicals, iron and steel production and non-ferrous metals which have limited scope for decarbonization. Carbon credits can help these companies to meet the requirements in the initial stages of transformation.
Initiatives of Indian Government towards Carbon Credit trade:
- The Centre is planning to set up the Indian Carbon Market (ICM) by establishing a national framework that will help in decarbonising the domestic economy by pricing GHG emissions via trading in carbon credit certificates.
- Carbon credits can assist companies in meeting sustainability targets where outfits can purchase credits or fund programmes that create carbon credits.
- The draft framework for the Indian Carbon Credit Scheme 2023 was recently notified by the Union government. The Bureau of Energy Efficiency functioning under the Ministry of Power has been tasked to develop the Carbon Trading Scheme in tandem with MoEFCC.
Benefits of setting up Indian Carbon Market:
- Investment Mobilisation: ICM will help mobilise investments for the transition to a low-carbon ecosystem. It will also help India lower the emissions intensity of its GDP by 45% by 2030 compared to the 2005 levels.
- Fillip to Energy Transition: India does have an energy savings-linked market mechanism. However, carbon credit trading will give a fillip to energy transition due to its greater scope for covering the country’s potential energy segments.
- Sectoral emission targets and benchmarking: ICM would help in setting GHG emissions intensity targets and establish sectoral benchmarks in sync with the domestic emissions trajectory, according to the climate goals.
- Flexibility to specific sectors: Although the ICM would be regulated, it will offer flexibility to companies in hard-to-abate segments to augment their GHG emission efforts through carbon market credits.
- Incentivise technological upgrade: The mechanism could help attract finance and technology for sustainable projects that can generate carbon credits. The ICM can be an effective channel in mobilising a major proportion of funds required for the low-carbon transition.
- Nudge Effect: The Centre’s decision will also create more awareness, change and innovation across hard-to-abate industries. Placing a price tag on carbon footprints would have a direct impact on industries.
- Aligning with national and international requirements: Carbon-related tariffs such as CBAM (Carbon Border Adjustment Mechanism) will start influencing trade directly, businesses would need to factor in both national and international implications. ICM can facilitate such integrations.
Frequently Asked Questions (FAQs)
1. What is meant by “Striking a Green Balance”?
A: Striking a Green Balance” refers to the pursuit of a sustainable and harmonious relationship between economic development and environmental conservation. It involves finding ways to promote economic growth while minimizing negative impacts on the environment.
2. Why is it important to strike a green balance?
A: Striking a green balance is crucial because it ensures a sustainable and resilient future for both human society and the planet. By considering the environment in development decisions, we can mitigate climate change, protect ecosystems, and ensure the well-being of current and future generations.
3. How can countries achieve a green balance in their policies and practices?
A: Achieving a green balance involves adopting policies that prioritize sustainability, investing in renewable energy sources, promoting eco-friendly technologies, and fostering public awareness about environmental issues. It also requires setting and adhering to environmental standards and regulations.
4. Are there any successful examples of countries striking a green balance?
A: Yes, Bhutan is often cited as a successful example. The country measures its progress not by Gross Domestic Product but by Gross National Happiness, emphasizing well-being and environmental sustainability. Bhutan’s commitment to preserving its pristine natural environment showcases how a green balance can be achieved.
5. What are the potential benefits of striking a green balance for society and the economy?
A: Striking a green balance can lead to numerous benefits, including reduced air and water pollution, improved public health, greater resource efficiency, and job creation in green industries. It can also contribute to a more stable and resilient economy in the face of environmental challenges.
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