Current Affairs for IAS Exams - 25 September 2013

Coal block auction policy for private firms gets Govt nod

• The Cabinet, , approved the methodology for auctioning coal blocks, providing for upfront and production-linked payments and benchmarking of coal sale prices.
• Coal blocks will be put for auction after the Environment Ministry reviews them, and bidders have to agree to a minimum work programme, according to an official statement. “
• The methodology provides for auctioning the fully explored coal blocks, and also provides for fast-tracking the auction by exploration of regionally explored blocks,”
• The policy will ensure greater transparency.
• A source said six explored blocks would be auctioned first, with estimated reserves of over 2,000 million tonnes.
• The policy provides for production-linked payment on a rupee per tonne basis, plus a basic upfront payment of 10 per cent of the intrinsic value of the coal block.

Intrinsic value

• The intrinsic value would be calculated on the basis of net present value (NPV) of the block arrived at through the discounted cash flow (DCF) method, .
• “To benchmark the selling price of coal, the international f.o.b (freight-on-board) price from the public indices like Argus/Platts will be used by adjusting it by 15 per cent to provide for inland transport cost which would give the mine mouth price,”
• To avoid short-term volatility, the average sale price will be calculated by taking prices of the past five years.
• For the regulated power sector, a 90 per cent discount would be provided on the intrinsic value. This would help rationalise power tariffs, the government said.
• To ensure firm commitment, there will be an agreement between the Ministry and the bidder to perform minimum work programmes at all stages.
• There will be development stage obligations in terms of milestones to be achieved such as getting mining leases and obtaining environment/forest clearances, while the bidder will have to give performance guarantees.

Relinquishment

• The policy also provides for relinquishment of a block without penalty if the bidder has carried out the minimum work programme stipulated in the agreement.

CCEA nod for shale gas, oil exploration under nomination regime

• The Cabinet Committee on Economic Affairs (CCEA), , approved the shale gas and oil exploration programme to be executed by national oil companies (NOCs) on acreages under the nomination regime.
• This policy will allow NOCs to carry out exploration and exploitation of unconventional hydro-carbon resources, particularly shale gas and oil, in their already awarded onland petroleum exploration licence/petroleum mining lease (PEL/PML) acreages under the nomination regime.
• The terms and conditions for guiding these activities are laid down in this policy,
• The NOCs shall apply for grant of shale gas and oil rights in their interested PEL/PML acreages, and are required to undertake a mandatory minimum work programme.
• A company is permitted three assessment phases of a maximum period of three years each. Royalty, cess and taxes would be payable at par with conventional oil/gas being produced from the respective areas.
• It is well acknowledged that production requirements and profile for shale oil and gas were different from conventional gas and oil.
• In view of this and due to the fact that the technologies required for production have been developed in the recent past, it was felt that a policy be put in place to achieve early development of these resources and to address issues arising out of E&P activities in shale gas and oil.

Female education linked to under-5 mortality rate

• If all women in India had completed secondary education, the under-five mortality rate would be 61 per cent lower, UNESCO has said.
• India and Nigeria account for more than a third of child deaths worldwide.
• If all women in both countries had completed secondary education, the under-five mortality rate would have been 61 per cent lower in India and 43 per cent lesser in Nigeria, saving 1.35 million children’s lives.
• Simple solutions such as mosquito nets and clean water can prevent some of the worst child diseases, but only if mothers are taught to use them.
• Almost a quarter of child deaths in India are due to pneumonia and over one-tenth are due to diarrhoea, according to the WHO-UNICEF Report.
• The Education for All Global Monitoring Report’s new analysis shows that pneumonia could be reduced by 14 per cent if women had just one extra year of education.
• Diarrhoea would be reduced by eight per cent if all mothers completed primary education, and by 30 per cent if they had secondary education.
• If all women had attended secondary school, they would know the nutrients that children need, the hygiene rules that they should follow and they also would have a stronger voice in the home to ensure proper care.
• The analysis has been released in time for the UN General Assembly discussions on the post-2015 development agenda.
• UNESCO’s new analysis proves that in South and West Asia, and sub-Saharan Africa, nearly three million girls are married by the age 15 years — below the legal age of marriage.
• If all young women completed primary education, the number of child brides would be reduced by almost half a million.
• Completing secondary education would reduce that number by two million. In these regions, 3.4 million young women give birth by the age of 17 years. If all young women completed primary schooling, this would result in 340,000 fewer early births, and if they all completed secondary education, the total would fall by two million.

Don’t blackball the proposal to clean up carbon

• As it releases its findings at the end of the month, the Intergovernmental Panel on Climate Change (IPCC) will do more than highlight the man-made increase of global temperatures.
• Its report will also raise the heat on negotiations concerning the role played by several international bodies in the reduction of climate pollutants.
• The release of the previous IPCC report in 2007, for example, provided additional momentum to difficult negotiations on a potential global agreement on the reduction of greenhouse gas emissions.
• This year, the publication of its findings will once more coincide with an ongoing negotiations cycle towards a new international climate agreement.

Role of other gases

• Beyond the stronger than ever recognition of the role of human activities in the climate crisis, the report will also highlight the diversity of pollutants involved in the process.
• Since the last IPCC report, scientists have increasingly highlighted the importance of targeting action not only at carbon dioxide (CO{-2}, the most common greenhouse gas emitted by humans), but also at other gases — including black carbon, methane and hydrofluorocarbons (HFC).
• These are labelled “short-lived climate forcers” (SLCF) due to their shorter lifespan in the atmosphere.
• While stabilising the increase of temperatures in the long term requires strong measures to reduce CO{-2}emissions, cutting SLCF pollution could provide greater immediate benefits for the climate system.
• Picking the right international forum is an eminently political matter as these forums apply different legal principles.
• Currently, the 1992 Climate Convention and its 1997 Kyoto Protocol constitute the cornerstones of international efforts to mitigate climate change.
• Under the convention, the principle of common but differentiate responsibility requires that developed countries should take the lead in combating climate change and provide financial support to support the mitigation efforts of developing countries.
• While the convention does not define which pollutants should be regulated under these principles, the targets set in the Kyoto Protocol for the reduction of the emissions of developed countries encompass emissions of CO{-2}, methane, HFCs as well as three additional gases or groups of gases.

Black carbon

• In 2009, the state of Micronesia suggested formally that the U.N. Climate Convention should develop a specific work programme to address the issue of black carbon.
• Concerned about the consequences of such an approach for the country, India’s Environment Minister at that time, Jairam Ramesh, responded that his government would reject bringing this pollutant under the ambit of the convention.
• Since developing countries are responsible for a large proportion of black carbon emissions (China and India being the largest emitters of those gases), addressing black carbon through the Climate Convention would require important effort from both countries.
• The proposal by Micronesia has however not moved forward since the original proposal.
• Over recent years, developed countries have addressed the SLCF emissions through several other international processes.
• The Arctic Council has played a key role in the scientific understanding of the impact of SLCF on the climate system.
• European and North American states also discussed capping the release of SLCF through the regional Convention on Long-Range Transboundary Air Pollution.
• In both cases, however, these discussions resulted only in the adoption of reporting obligations and fell short of adopting specific caps on emissions.
• This lack of appetite of developed states for legally binding targets reduces the likelihood that India will ever face renewed pressure to accept the inclusion of SLCF under the U.N. Climate Convention.
• Last year, a small group of developed and developing countries led by the U.S. and Canada launched the Climate and Clean Air Coalition (CCAC).
• This new initiative promotes international cooperation to tackle SLCF pollution.
• Over the past 18 months, the CCAC attracted the participation of 70 countries and non-state actors.
• Contrary to the U.N. Climate Convention which is based on legally binding provisions and commitments, the CCAC relies on a results oriented approach supported by short-term voluntary actions.
• Neither India nor the other BASIC countries (China, South Africa and Brazil) have yet joined the coalition.
• Looking at their preferred approach in the U.N. climate negotiations, the approach adopted so far by the CCAC could actually be a good fit for the BASIC group.
• The four countries have repeatedly emphasised their willingness to take climate action on the basis of their own interest rather than under the recognition of international legal obligations.

Allows freedom

• India is the country most threatened by the adverse effects of black carbon.
• Researchers have highlighted how the pollutant alters the dynamics of the monsoons and accelerates the melting of snow and ice in the Himalayas.
• The adoption of cost-effective measures to reduce black carbon pollution in India would also result in considerable benefits on health and crop production in the country.
• Considering that CCAC membership does not preclude any particular action, India would retain the freedom to adopt only those actions proven to be cost-effective.

Sources: Various News Papers & PIB