DAILY CURRENT AFFAIRS IAS | UPSC Prelims and Mains Exam – 4th October 2022

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  • October 5, 2022
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Medicinal Fungi

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  • Prelims – Science and Technology

Context: Recently, an analytical study of medicinal fungi carried out by researchers from the Institute of Mathematical Sciences, Chennai (IMSc), shows that some chemicals they secrete may find use as novel drugs.

About Medicinal Fungi:

  • They used a database, MeFSAT (Medicinal Fungi Secondary Metabolites and Therapeutics), which compiles information on 184 medicinal fungi, including mushrooms.
  • Medicinal fungi belong to two taxonomic divisions namely, Basidiomycota and Ascomycota.
  • Mushrooms belong to the Basidiomycota division.
  • An example is Agaricus bisporus, the button mushroom, which can be consumed.
  • Fungi belonging to the Ascomycota division are generally not mushrooms.
  • Among these are Isaria cicadae and Shiraia bambusicola which are used in traditional Chinese medicine.

Significance of the research :

  • Secondary metabolites are chemical compounds that fungi produce when they are stressed.
  • These are not strictly essential and hence the name ‘secondary’.
  • They enhance the fungus’ ability to survive.
  • The work has been published in the preprint server BioRXiv.
  • Cordycepin, a secondary metabolite produced by Cordyceps species of fungus, is known to have anti-tumour properties.

Source: The Hindu

Previous Year Questions

Q.1) With reference to “Gucchi” sometimes mentioned in the news, consider the following statements:

  1. It is a fungus.
  2. It grows in some Himalayan Forest areas.
  3. It is commercially cultivated in the Himalayan foothills of north-eastern India.

Which of the statements given above is/are correct? (2022)

  1. 1 only
  2. 3 only
  3. 1 and 2
  4. 2 and 3

Q.2) Why is a plant called Prosopis Juliflora often mentioned in the news? (2018)

  1. Its extract is widely used in cosmetics
  2. It tends to reduce the biodiversity in the area in which it grow
  3. Its extract is used in the synthesis of pesticides
  4. None of the above

Nobel Prize in Medicine 2022

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  • Prelims – Current Affairs

In News: Nobel Prize for Physiology or Medicine 2022 has gone to Svante Paabo, a Swedish scientist based in Germany who is credited with developing  new and innovative methodologies to extract ‘clean’ DNA from human fossils and for sequencing Neanderthal genome.

  • Also discovered the existence of an unknown sub-species of the human family, now called Denisovans, who lived around the same time as the Neanderthals.


  • While it is possible to extract DNA samples from fossil remains, it can be extremely difficult, mainly because of the complications in collecting their DNA.
  • Similar but different techniques have been employed at the Rakhigarhi excavation project site in Haryana to find out about ancient populations in the Indian region.

Significance of the discovery:

  • Earlier, scientists were studying the genomes of current human beings and extrapolating the information into the past through a method called deduction. This exercise is indirect and involves uncertainties. The new discovery has eliminated deductions, and rely on direct observation. For example, a particular skull bone, called petrous, preserves DNA better than the rest of the body.
  • We now understand that archaic gene sequences from our extinct relatives influence the physiology of present-day humans. One such example is the Denisovan version of the gene EPAS1, which confers an advantage for survival at high altitude and is common among present-day Tibetans
  • We now better understand human evolution and migration such as our understanding of how our immune system reacts to infections. In the 2020 paper, published in Nature, Paabo showed that one particular gene from the Neanderthals aggravated the risk of severe diseases among Covid patients.
  • Establishment of an entirely new scientific discipline, paleo genomics.


  • Neanderthals are modern human’s cousin species that went extinct about 30,000 years ago.
  • Neanderthals and Denisovans co-existed for about 20,000 years, during which they not only interacted with each other, but also inter-bred.
  • ‘Neanderthal Man’ is a book by Svante Paabo.
  • 2021 recipients of Nobel Prize were David Julius and Ardem Patapoutian for their discoveries into how the human body perceives temperature and touch

About Nobel Prize:

  • Nobel Prizes are a group of five separate prizes awarded to “those who have conferred the greatest benefit to humankind.
  • Named after, Alfred Nobel, a Swedish chemist, engineer, and industrialist most famously known for the invention of dynamite.
  •  Nobel Prizes were first awarded in 1901.
  • The prizes carry a cash award of 10 million Swedish kronor (nearly $900,000).
  • The money comes from a bequest left by the prize’s creator, Alfred Nobel, who died in 1895.

Source: The Hindu

Telecom Technology Development Fund scheme (TTDF)

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  • Prelims – Current Affairs

In news: The scheme is launched by Universal Service Obligation Fund (USOF).


  • The scheme is aligned with Prime Minister’s clarion call of adding Jan Anusandhan in the new phase of Amrit Kaal.
  • The scheme entails grants to Indian entities to encourage and induct indigenous technologies tailor-made to meet domestic needs.


  • Fund R&D in rural-specific communication technology applications
  • Form synergies among academia, start-ups, research institutes, and the industry to build and develop the telecom ecosystem.
  • Promote technology ownership and indigenous manufacturing
  • Create a culture of technology co-innovation, reduce imports, boost export opportunities
  • Creation of Intellectual Property.
  • Development of standards to meet countrywide requirements and create the ecosystem for research, design, prototyping, use cases, pilots, and proof of concept testing, among others.

About USOF:

  • Universal Service Obligation Fund (USOF) is an attached office of the Department of Telecommunications (DoT), Ministry of Communications.
  • It was formed under the Indian Telegraph (Amendment) Act, 2003 giving it a statutory
  • It is headed by the Administrator, USO Fund who is appointed by the Central Government, for the administration of the fund.

Source: PIB

AUKUS alliance

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  • Prelims – International organisations

In News: China withdrew a draft resolution against the AUKUS alliance at the general conference of the International Atomic Energy Agency (IAEA) in Vienna due to lack of majority support.

  • The resolution argued AUKUS initiative violated the responsibilities of Australia, the UK and the US under the Nuclear Non-Proliferation Treaty (NPT).
  • India’s deft diplomacy to ensure that the draft resolution did not get majority support, was deeply appreciated by IAEA member states and the AUKUS partners.

About AUKUS:

  • It is a trilateral security pact between Australia, the United Kingdom, and the United States, announced in 2021 for the Indo-Pacific region.
  • To transfer technology to build a fleet of at least eight nuclear-powered submarines armed with conventional weapons.
  • The pact is also seen as a deterrence to China’s aggression in the Pacific region.
  • The pact also includes cooperation on advanced cyber, artificial intelligence and autonomy, quantum technologies, undersea capabilities, hypersonic and counter-hypersonic, electronic warfare, innovation and information sharing.
  • It complements several pre-existing similar arrangements for the region like Five Eyes intelligence cooperation initiative, ASEAN and the Quad.

Significance of AUKUS:

  • AUKUS aims to ensure that there will be freedom and openness in the Indo-Pacific region, including the South China Sea.
  • Although no explicit mention was made of China in any of the AUKUS announcements, this group challenges the regional hegemonic ambitions of China.
  • The operationalisation of this security partnership led to closer coordination among the nations concerned in terms of joint military presence, war games and more in the region.
  • Given the inroads that China has made in recent decades with its Belt and Road Initiative in India’s neighbourhood, fears over ‘encirclement’ of India by China may be partially mitigated by AUKUS.
  • Further, India may indeed derive secondary benefits from having three advanced nations with arguably the most sophisticated military know-how in the world coming together.

Concerns about AUKUS:

  • China’s opposition: China argues that the initiative violated the Non-Proliferation Treaty. China also criticised IAEA’s role in this regard. However, the AUKUS partners and the IAEA say the NPT allows marine nuclear propulsion provided necessary arrangements are made with the IAEA.
  • Australia’s domestic challenges: As per Australia’s 1984 nuclear-free zone policy, nuclear-powered submarines would not be allowed into the former’s territorial waters. Hence, there is a political opposition to it
  • Upset France: Australia had struck a deal with France for $90 billion worth of conventional submarines, which stands cancelled now. This has upset political leadership in France.
  • Upset New Zealand: Criticised for not involving New Zealand, an important strategic ally in the Pacific region, possibly because of the country’s nuclear-free policy
  • Battleground: The Indo-Pacific region will emerge as the new geopolitical battle ground posing greater security risk to others.

International Atomic Energy Agency (IAEA):

  • Widely known as the world’s “Atoms for Peace and Development” organization within the United Nations family, the IAEA is the international centre for cooperation in the nuclear field towards.
  • The IAEA was created in 1957 in response to the deep fears and expectations generated by the discoveries and diverse uses of nuclear technology.
  • It reports annually to the United Nation General Assembly.
  • Headquarter: Vienna, Austria.

Objectives and Functions:

  • The Agency works with its Member States and multiple partners worldwide to promote safe, secure and peaceful use of nuclear technologies.
  • IAEA seeks to promote the peaceful use of nuclear energy and to inhibit its use for any military purpose, including nuclear weapons.
  • When necessary, the IAEA also reports to the UN Security Council in regards to instances of members’ non-compliance with safeguards and security obligations.
  • In 2005, it was awarded the Nobel Peace Prize for their work for a safe and peaceful world.

Source:   Hindustan Times

Previous Year Question

Q.1) In the Indian context, what is the implication of ratifying the ‘Additional Protocol’ with the ‘International Atomic Energy Agency (IAEA)’? (2018):

  1. The civil nuclear reactors come under IAEA safeguards
  2. The military nuclear installations come under inspection of IAEA
  3. The country will have the privileged to buy uranium from the Nuclear Suppliers Group (NSG)
  4. The country automatically becomes a member of the NSG.

International Day of Non-Violence

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  • Prelims – History

In News: India’s Permanent Mission to the United Nations and UNESCO Mahatma Gandhi Institute of Education for Peace and Sustainable Development (MGIEP), organised a panel discussion to commemorate the International Day of Non-Violence.

  • The event saw a life-size colour hologram of Gandhi – made with advanced reprographic techniques and AI technology.
  • Born in 1869 in the Porbandar town of Gujarat, Gandhi pioneered the philosophy of non-violence (Ahimsa) through his political marches against the British, and talks around India and the world.


  • Iranian Nobel Laureate Shirin Ebadi, in January 2004, first proposed the idea of dedicating a day to non-violence, around the world.
  • On June 15, 2007, the United Nations General Assembly (UNGA) passed a resolution to commemorate October 2 as the International Day of Non-Violence, with the core objective to “disseminate the message of non-violence, tolerance, respect for diversity, human rights and fundamental freedoms through education and public awareness.”
  • The Ahimsa Lecture series was introduced in the year 2016 to facilitate lectures from public speakers on peace and non-violence, for “the benefit of peace-builders, policy makers, youth, UNESCO Member states, and international community.”
  • A dialogue with the hologram was envisioned in 2019, and was curated by Birad Rajaram Yagnik, director of the Mahatma Gandhi Digital Museum in Hyderabad. This dialogue focused on raising awareness on the future of education and SDG 4 (to ensure inclusive and equitable quality education and promote lifelong learning opportunities for all).

About the hologram:

  • A hologram refers to a “three-dimensional image formed by the interference of light beams from a laser or other coherent light source.”
  • The holography, aimed at bringing written works of Gandhi into “a life-like scenario”, covered the leader’s writings on Satyagraha, non-violence (Ahimsa), kindness, critical inquiry and education.
  • It was not the first time that a hologram of Gandhi participated in a live panel discussion
  • Significance: The hologram of Gandhi emphasised the meaning of “real education,” as “drawing the best out of yourself” and expressed concerns with people “hardly” giving “any thought to the improvement of character of the educated.”
  • Process of Creation: It was created using digital sculpting tools such as photo-mapped images from 1930-1940, advanced contouring software and 3D printing. The resultant image was further animated and the voice lip-synced.
  • Reprography refers to the reproduction and duplication of documents, written materials, drawings, designs, etc., by any process making use of light rays or photographic means, including offset printing, microfilming, photography

Meaning of non-violence:

  • Non-violence,” according to Gandhi, “is mightier than the mightiest weapon of destruction devised by the ingenuity of man”.
  • The United Nations defines the term as a rejection of the “use of physical violence in order to achieve social or political change.”
  • The theory of non-violence emphasises that the power of rulers depends on the consent of the populations, and non-violence therefore seeks to undermine such power through withdrawal of the consent and cooperation of the populace.

Source:  Indian Express

e-NAM Platform

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  • Prelims – Governance
  • Mains – GS 2 (Governance)

Context: Food and agriculture marketing in emerging economies is experiencing a wave of being promoted on digital platforms. India is no exception to this.

  • The Ministry of Agriculture and Farmer Welfare launched the electronic National Agriculture Market (eNAM)–Platform of Platforms (PoP) on July 14, 2022, as a mobile application in 12 languages.

What is Platform of Platforms under e-NAM?

  • The Platform of Platforms under e-NAM intends to promote trade & marketing of agricultural produce wherein farmers will be facilitated to sell the produce outside their state borders.
  • This will increase farmers’ digital access to multiple markets, buyers and service providers and bring transparency in business transactions with the aim of improving price search mechanism and quality commensurate price realisation.
  • So far, 41 service providers from different platforms are covered under POP that facilitate various value chain services like trading, quality checks, warehousing, fintech, market information, transportation etc.
  • The platform creates a digital ecosystem for farmers who will benefit from the expertise of different platforms in different segments of the agricultural value chain.

How Platform of Platforms under e-NAM would help marketing of Agri Produces?

  • e-NAM integrates the platform of Service Providers as the “Platform of Platforms” this includes;
    • Composite Service Providers (Service Providers who provide holistic services for the trading of agricultural produce including quality analysis, trading, payment systems and logistics)
    • Logistics Service Provider
    • Quality Assurance Service Provider
    • Cleaning, Grading, Sorting & Packaging Service Provider,
    • Warehousing Facility Service Provider, Agricultural Input Service Provider,
    • Technology Enabled Finance & Insurance Service Provider,
    • Information Dissemination Portal (Advisory Services, crop forecasting, weather updates, capacity building for farmers etc.)
  • The chain also consists of other services such as e-commerce, international agri-business platforms, barter, private market platforms etc.
  • The inclusion of various service providers has dual benefits, i.e.
    • It adds to the value of the e-NAM platform;
    • It gives the users of the platform options to avail enlisted services from different service providers.
  • The platform also enables farmers, FPOs, traders and other stakeholders to access a wide variety of goods and services across the agricultural value chain through a single window while giving more options to the stakeholders.

Step needed to spread eNAM-PoP services:

Valuable architecture:

  • eNAM-PoP would provide a value architecture to the diverse agri-food value chain actors.
  • The architecture should perform four functions: discovery, matching, transaction, and evaluation elements. In other words, PoP should be a dynamic, interactive, and strategic fit with the Agricultural Market Information Systems.
  • Transaction data and their security registry could be maintained using a blockchain-enabled Distributed Ledger Technology, while transactions can be enabled through a smart contract embedded in PoP. The coupling of software solutions and Application Programming Interfaces (APIs) can be added to the platform architecture.

Access to market:

  • PoP can enable farmers to access the new or missing markets, compare prices of several commodities, and sell the assayed and certified produce to traders and bulk buyers through the PoP mobile app.
  • Farmer collectives or FPOs can access the location of warehouses or market yards given the proximity and contact the empanelled service providers of eNAM PoP and avail of such services. For example, Aryadhan, a fin-tech services provider, would extend trade finance options and offer real-time payments to FPOs.
  • Upstream and downstream marketplace models seem to have harnessed the untapped potential of agricultural markets. However, they are yet to be time-tested platform business models in the agriculture field.

Stakeholders’ incentive:

  • Stakeholders’ incentive design is necessary to sustain and scale up eNAM-PoP.
  • A robust governance mechanism must be aligned with the PoP design and its roll-out to improve coordination between users and those complementing the platform and reduce the power asymmetry between stakeholders – directly and indirectly associated with the platform.
  • The Ministry of Agriculture and Farmer Welfare, Small Farmers’ Agri-business Consortium, and the empanelled strategic management group and those complementing the platform need to chart the scaling strategy for PoP – considering the network loop, data loop, and capital loop.

Way Forward:

  •  eNAM-PoP would provide a value architecture to the diverse agri-food value chain actors. In other words, PoP should be a dynamic, interactive, and strategic fit with the Agricultural Market Information Systems.
  • PoP can enable farmers to access the new or missing markets, compare prices of several commodities, and sell the assayed and certified produce to traders and bulk buyers through the PoP mobile app.
    • For example, Aryadhan, a fin-tech services provider, would extend trade finance options and offer real-time payments to FPOs.
  • Upstream and downstream marketplace models seem to have harnessed the untapped potential of agricultural markets.
    • However, they are yet to be time-tested platform business models in the agriculture field. The strategic management group of eNAM can draw some lessons from unveiled marketplace models and improvise the PoP roll-out and upscaling.
  • The Ministry of Agriculture and Farmer Welfare, Small Farmers’ Agri-business Consortium, and the empanelled strategic management group and those complementing the platform need to chart the scaling strategy for PoP – considering the network loop, data loop, and capital loop.
  • While the rising regulatory complexity, risks, and regulatory arbitrage in agriculture can arrest the magnitude of scaling, the success of PoP would depend on diverse actors’ participation and willingness to pay for services that should favourably compare with the offerings of platform capitalists.

About Electronic National Agriculture Market (e-NAM):

  • Electronic National Agriculture Market (e-NAM) is a pan-India electronic trading portal for Agri-produce, launched in April 2016 to create a unified national market for agricultural commodities by networking existing Agriculture Produce Marketing Committees (APMCs).
  • e-NAM was constructed with the goal of creating a seamless national market where buyers and sellers can transact without being in the same location. Through e-NAM platform, more buyers can bid for a specific lot. The dispersed set of online buyers bidding anonymously reduces the opportunities traders have for colluding.
  • e-NAM has integrated about 1,260-odd APMCs that account for only 17.21 per cent of the total 7,320 APMCs including 4,843 sub-market yards.
  • The agriculture marketplace has observed a staged development, say
  • eNAM 1.0 as a pan-India electronic trading portal for Agri-produce.
  • eNAM 2.0 for promoting warehouse-receipt (eNWR) trading and direct marketing of farmer produce (through the APLM Act, 2017).
  • eNAM 3.0 by unveiling the PoP app-based module.

Source: The Hindu

Previous Year Questions

Q.1) Consider the following:

  1. Aarogya Setu
  2. CoWIN
  3. Digi Locker

Which of the above are built on top of open-source digital platforms? (2022)

  1. 1 and 2 only
  2. 2, 3 and 4 only
  3. 1, 3 and 4 only
  4. 1, 2, 3 and 4

Q.2) With reference to the “Tea Board” in India, consider the following statements:

  1. The Tea Board is a statutory body.
  2. It is a regulatory body attached to the Ministry of Agriculture and Farmers Welfare.
  3. The Tea Board’s Head Office is situated in Bengaluru.
  4. The Board has overseas offices at Dubai and Moscow.

Which of the statements given above are correct?  (2022)

  1. 1 and 3
  2. 2 and 4
  3. and 4
  4. 1 and 4

Light Combat Helicopter

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  • Prelims – Science and Technology
  • Mains – GS 3 (Science and Technology)

Context: Recently, indigenous Light Combat Helicopter (LCH)( ‘Prachand’), capable of destroying enemy air defence, conducting counter insurgency strikes and much more, was formally inducted into the Indian Air Force (IAF) at the Jodhpur air base

  • According to its makers, the LCH is the only attack helicopter in the world which can land and take off at an altitude of 5,000 meters with a considerable load of weapons and fuel, meeting the specific requirements laid out by the Indian Armed Forces.

Genesis of the helicopter:

  • Currently, India has been operating sub 3 ton category French-origin legacy helicopters, Chetak and Cheetah, made in India by the HAL which are primarily, utility helicopters
  • Indian forces also operate the Lancer, an armed version of Cheetah
  • In addition, the Indian Air Force currently operates the Russian origin Mi-17 and its variants Mi-17 IV and Mi-17 V5, with maximum take-off weight of 13 tonnes, which are to be phased out starting 2028.
  • But it was during the 1999 Kargil war that the need was first felt for a homegrown lightweight assault helicopter that could hold precision strikes in all Indian battlefield scenarios.
  • It meant a craft that could operate in very hot deserts and also in very cold high altitudes, in counter-insurgency scenarios to full-scale battle conditions.
  • The requirement was for a more agile, multi-role dedicated attack helicopter. After the initial deliberations, the government sanctioned the LCH project in October 2006, and HAL was tasked to develop it.
  • The HAL’s Rotary Wing Research and Development Centre, which had already worked on the Advanced Light Helicopter (ALH) Dhruva and its weaponised version ALH Rudra, embarked upon the project.

The development of LCH:

  • The LCH has been designed as a twin-engine, dedicated combat helicopter of 5.8-ton class, thus categorised as light.
  • It features a narrow fuselage and tandem — one behind the other — configuration for pilot and co-pilot. The co-pilot is also the Weapon Systems Operator (WSO).
  • It also has many more state-of-art systems that make it a dedicated attack helicopter.
  • The first Technology Demonstrator was completed in February 2010 and took its first flight in March the same year.
    • TD-2 prototype, completed around 2012, successfully passed the cold weather trials at high altitude. TD-3 and TD-4 prototypes, completed around 2014 and 2015, successfully tested other flight test requirements.
  • HAL officials said that the flight testing was carried out at various altitudes, from sea level to the Siachen range, in extreme cold and hot weather conditions, and in desert regions.
    • During these tests, integration of mission sensors such as electro-optical system, helmet-mounted display system, solid state data and video recorder, and weapon systems such as turret gun, rockets and air-to-air missile systems was carried out.
  • In March this year, the Cabinet Committee on Security (CCS) approved procurement of 15 LCH Limited Series Production (LSP) — 10 for IAF and five for Army — at the cost of Rs 3,887 crore along with infrastructure sanctions worth Rs 377 crore.

 Features of the LCH:

  • LCH has the maximum take-off weight of 5.8 tonnes, maximum speed of 268 kilometres per hour, range of 550 kilometres, endurance of over three hours and service ceiling — the maximum density altitude to which it can fly — of 6.5 kilometres.
  • The helicopter uses radar-absorbing material to lower radar signature and has a significantly crash-proof structure and landing gear. A pressurised cabin offers protection from Nuclear, biological and chemical (NBC) contingencies.
  • The helicopter is equipped with a countermeasure dispensing system that protects it from enemy radars or infrared seekers of the enemy missiles. As far as weapons systems are concerned, a 20 mm turret gun, 70 mm rockets and air-to-air missile systems are onboard.
  • LCH is powered by two French-origin Shakti engines manufactured by the HAL.
  • With these features, the LCH has the capabilities of combat roles such as destruction of enemy air defence, counter insurgency warfare, combat search and rescue, anti-tank, and counter surface force operations.

Way Forward:

  • These are the significant achievements of India in the field of defence which shows India’s capability in developing state of art defence technology which will also pave the way for the Aatmanirbhar Bharat.
  • It will also helpful in reducing the defence import bill of India and on the other hand, it will strengthen the India’s position in export of defence equipment.

Source: Indian Express

Previous Year Question

Q.1) With reference to India’s satellite launch  vehicles, consider the following statements:

  1. PSLVs launch satellites useful for Earth resources monitoring whereas GSLVs are designed mainly to launch communication satellites.
  2. Satellites launched by PSLV appear to remain permanently fixed in the same position in the sky, as viewed from a particular location on Earth.
  3. GSLV Mk III is a four-staged launch vehicle with the first and third stages using solid rocket motors; and the second and fourth stages using liquid rocket engines.

Which of the statements given above is/are correct.? (2018)

  1. 1 only
  2. 2 and 3
  3. 1 and 2
  4. 3 only

Carbon pricing mechanism

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  • Mains – GS 3 Environment


  • 2021 Conference of Parties 26 (COP26) propelled nations to ramp up their climate targets and the concomitant Nationally Determined Contributions (NDCs) to reduce global greenhouse gas emissions(GHGEs).
  • However, the updated NDCs and the announced pledges for 2030 remain insufficient and poorly aligned with the targets of the Paris Agreement.
  • Actual reduction is estimated to be 7.5%, while the target required is 30% (to limit warming to 2°C) and 55% (to limit global warming within the 1.5°C).

Challenges to mitigating climate change:

  • Climate change is a product of both market and policy failure such as fossil fuel subsidies and a distortionary tax system.
  • The cost of emitting GHGs is not reflected in the price of goods and services.
  • Poor incentives for potential innovators and the inadequacy of public infrastructure, energy networks, and finance have impeded investments in research, development and deployment of clean technology.

Carbon Pricing:

  • The idea dates back to 1920 to Arthur Pigou in his book ‘The Economics of Welfare’. A Pigouvian tax on carbon ensures that the cost of emitting GHGs is reflected in the price of the commodity or service.
  • It embodies a laissez faire ideology offering a market-friendly mechanism that allows firms and consumers the flexibility to choose between the costs of cutting emissions and the benefits accrued from continuing to emit.
  • Carbon pricing is considered a cost-effective measure to internalise the externalities associated with CO2 emissions and maximise emission reduction per dollar at the lowest possible cost.

Approaches to carbon tax pricing:

  • Abatement approach— It is the marginal cost of reducing each additional unit of emission and is contingent on various factors including the pace of low carbon technological innovation, cost of compliance, as well as the ability of firms and consumers to substitute low-carbon products for high-carbon ones. Carbon pricing mechanisms are predicated on the basis that profit-making firms will continue to cut emissions to the point where the marginal abatement cost is lower than the social cost of carbon.
  • Revenue approach – where the tax rate is based on the revenue considerations of the regulating authority or by simply following a benchmarking approach where the tax rate is linked with the rate in neighbouring jurisdictions, among trading partners or competitors.
  • International Crediting Mechanisms/ Baseline and Credit system – According to Kyoto Protocol, industrialised Annex B countries can purchase certified emission reduction (CER) credits from developing countries (each credit equivalent to one tonne of CO2).
  • The Clean Development Mechanism – is the international standardised emissions offset instrument governed by the UNFCCC to facilitate the trade on the global scale.
  • Internal Carbon Prices – It is being used voluntarily by companies and organisations to safeguard against future shocks, climate related risks and prospective government regulations. It is commonly done via shadow carbon pricing where a hypothetical carbon cost is associated with each ton of CO2 emissions.

Implicit carbon pricing:

  • Do not directly put a price on emitting carbon but set uniform performance standards for GHG abatement.
  • Command-and-Control Regulations – employs technology and performance-based standards to control emission levels and protect environment quality.
  • Clean Energy Standards (CES) – is a market-based and technology-neutral approach to encourage the power sector to switch to non- or low-emitting sources of energy.
  • Eliminating Fossil Fuel Subsidies gradual elimination of fossil fuel subsidies can be an effective way to achieve an optimal price for the fuel as well as provide incentives for energy efficiency and fuel-switching technologies.

Explicit carbon pricing:

  • It is usually mandated by the government.
  • It acts as a market signal for producers and consumers to move towards cleaner sources of production.
  • These can be achieved through carbon taxes and/or an ETS (emission trading system)
  • Carbon tax – A carbon tax imposes a fixed price on carbon emissions while the quantity of emission reduction is left to the market forces. The objective is to increase the cost of fossil fuel and provide an incentive for investments in fuel-switching strategies and energy-efficient technologies.
  • Emission Trading System (ETS) – In a cap-and-trade model, the government sets a limit (cap) on quantity of permissible emissions. While the quantity/volume of emissions is regulated, the price is determined by the market.

Global Carbon Pricing Mechanisms:

  • Globally, 68 carbon pricing instruments (CPIs) are operating including countries like Chile, Switzerland, New Zealand, China, European Union etc.

Carbon pricing in India:

  • In the case of India, the relevance of carbon markets has been underlined by the recent Energy Conservation (Amendment) Bill, 2022 which is momentous in its scope, empowering the government to establish a carbon credit trading scheme and laying the ground for a formal carbon market that can be instrumental in India’s pathway towards a net-zero economy by 2070.
  • PAT scheme – introduced in 2012, it is the flagship programme of the Bureau of Energy Efficiency (BEE), Ministry of Power.
  • Energy-intensive industrial production units, called “designated consumers” (DC) are allotted Specific Energy Consumption (SEC) reduction targets over a cycle of three years.
  • The units that exceed the targets are awarded Energy Saving Certificates (ESCerts), each equal to one metric tonne of oil.
  • DCs that are unable to meet these targets can purchase the difference in ESCerts from the units that have exceeded their targets.
  • The ESCerts can be traded on two power exchanges, namely, Power Exchange Indian Limited (PXIL) and Indian Energy Exchange (IEX)
  • Emission trading scheme on an air pollutant – This is an innovative emission trading scheme on respiratory solid particulate matter(RSPM), the first particulate trading system in the world.
  • The scheme has been piloted in Gujrat, Maharashtra, and Tamil Nadu.
  • Pollution targets are set for areas based on ambient air quality standards and permits are allocated which can be traded, after verification, based on the gains and shortfalls from compliance.
  • The scheme relies on a continuous emission monitoring system (CEMS) for setting the baseline and verification purposes.
  • CEMs is an intrinsic element in the scheme’s design as it provides real-time information and helps avoid issues pertaining to spot checking and/or spurious reporting by third party auditors.
  • Carbon Cess – Introduced in 2010, levied on coal, lignite, and peat in the form of an excise duty.
  • With the introduction of the GST Compensation Cess, the carbon cess was abolished .
  • CO2 emitting products such as coal, kerosene, naphtha, lubes and LPG are included in GST with exceptions for five petroleum products, i.e., petrol, diesel, natural gas, ATF and crude oil. These are instead subjected to excise duties and VAT.
  • Concern: The tax rates do not correspond with the carbon footprint of the fuels and thus fail to provide the right price signals to producers and consumers to reduce consumption and switch to low carbon-emitting sources of energy
  • Renewable Purchase Obligations (RPO) and Renewable Energy Certificates (REC)
  • Electricity DISCOMS, open access consumers and captive power producers have to purchase a percentage of their electricity from renewable energy (RE) sources.
  • These are termed as renewable purchase obligations (RPO) and are mandated by the Electricity Act (2003).
  • The State Electricity Regulatory Commission is responsible for fixing the minimum RPO for each state.
  • Obligated entities can purchase RECs on the national energy exchanges to meet their RPO targets without actual procurement of RE-generated power.
  • It overcomes geographical disparity in renewable energy production and incentivising electricity generation from RE sources beyond the RPO state limits.
  • Concern: The enforcement and compliance with RPO remains weak and is a persisting obstacle to India’s ambitions of expanding renewable energy production and procurement
  • Excise taxes on Diesel and Petrol –
  • As of May 2020, India had the highest taxes on petrol and diesel in the world.
  • Concern: The high taxes are on account of the Centre’s revenue requirements and not environmental considerations and do not account for the carbon footprint of the fuels.

Significance of Carbon pricing:

  • Putting a price on carbon internalises the social cost of carbon, and compels companies to adjust their investment portfolio and production methods while encouraging consumers to alter behavioural patterns.
  • A carbon price is deemed as an effective tool to incentivise future investment, consumption and innovation towards sustainable and climate-friendly pathways, and support a sustainable pandemic recovery. In 2021, approximately USD 84 billion was recorded in carbon pricing revenue, as a result of higher carbon prices, increased auctioning from emissions trading, and revenue from new instruments.
  • Moreover, carbon pricing can be a useful fiscal tool and a prominent source of augmenting government revenues.
  • Typical carbon pricing policies allocate government revenues in three ways: investment in climate-related clean technologies, general budget, and income tax cuts or rebates.
  • Investments in sustainable industries can generate jobs three times of the full-time jobs from government spending in fossil fuels.
  • In the context of developing economies, these investments become particularly critical for supporting vulnerable sectors and communities to adapt to climate change and achieve just transitions.
  • Pre-emptively, designing effective domestic climate policies inclusive of carbon pricing mechanisms—such as the EU Carbon Border Adjustment Mechanism—can also help offset the implications of border tariffs.
  • The revenues generated from selling allowance certificates will augment fiscal revenues and can be used to reduce distortionary taxes or finance investments in clean-tech programs.


  • For trading purposes, the ESCerts should be converted into carbon-denominated allowances based on carbon intensity benchmarks.
  • Deploying price containment measures in the ETS design can help incorporate greater flexibility and price predictability such as establishing a price corridor, i.e., introducing a price floor and a price ceiling,
  • In order to contain price volatility – have a Cost Containment Reserve (CCR) which allows the regulator to release a fixed additional supply of allowances if the sale of CO2 allowance prices exceeds a certain price threshold, also called the trigger price,
  • Banking and borrowing unused emissions as well as the use of offsets which allows regulated businesses to buy emissions reduction credits from outside the market, can help provide greater flexibility to business owners.

Way forward

  • Careful planning is essential using rigorous quantitative modelling and analysis from the data collected via the pilot projects.
  • Both the GST regime and the PAT scheme provide a well-functioning machinery which India can leverage to build upon a strong carbon pricing framework using a combination of both a carbon tax and an emission trading system.
  • In the context of India, it can help meet its ambitious current and future climate goals, offer emission reduction at the lowest possible cost, and accelerate progress on the Sustainable Development Goals (SDGs)
  • Global climate policy groups have been debating the inception of a Climate Club, seeking to establish an international target carbon price (incremental in nature),
  • The current G20 Troika, led by three developing countries – Indonesia, India and Brazil, presents a unique and apposite moment to push forward a global carbon pricing framework built with a redistributive mechanism
  • The principles of Common but Differentiated responsibilities (CBDR) and the Just Transition Declaration, climate policy architecture and designing domestic carbon policies will hold India in good stead in an increasingly decarbonising future.

Source: Observer Research Foundation

Baba’s Explainer -Demographic changes in border areas and radicalisation in India

India and Pluralism


  • GS-3: Security challenges and their management in border areas

Context: Securing India’s borders against anti-national interests and at the same time putting in place systems that can prohibit such elements while encouraging genuine trade and commerce are the principles of effective border management.

  • While addressing the two-day National Security Strategies (NSS) Conference, Union Home Minister Amit Shah stressed checking the demographic change in border areas and growing radicalisation in border areas.
  • He stressed that police forces of the border states should keep a watchful eye on this development, which is very serious in nature.

Read Complete Details on Demographic changes in border areas and radicalisation in India

Daily Practice MCQs

Daily Practice MCQs

Q.1) What is/are the advantage/advantages of implementing the ‘Telecom Technology Development Fund’ scheme?

  1. The scheme entails grants to Indian entities to encourage and induct indigenous technologies to meet domestic needs.
  2. Help in creation of intellectual property.

Select the correct answer using the code given below:

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither1 nor 2

Q.2) With reference to the “AUKUS alliance”, consider the following statements:

  1. It is a treaty to secure economic cooperation between Australia, the United Kingdom, and the United States.
  2. It follows the IAEA safeguards.

Which of the statements given above is/are correct ?

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2

Q.3) Consider the following statements regarding Denisovans

  1. They are an extinct species of archaic humans who lived in Africa around 20,000 years ago.
  2. There is abundant fossil remains that point to the existence of Denisovans.
  3. Denisovan version of a gene called EPAS1 is found to confer a survival advantage at high altitude and is common among present-day Tibetans.

Which of the above statement(s) is/are correct?

  1. 3 only
  2. 2 only
  3. 1 only
  4. 1 and 3 only

Comment the answers to the above questions in the comment section below!!

ANSWERS FOR ’4th October 2022 – Daily Practice MCQs’ will be updated along with tomorrow’s Daily Current Affairs.

ANSWERS FOR 3rd October – Daily Practice MCQs

Answers- Daily Practice MCQs

Q.1) – d

Q.2) – b

Q.3) – a

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