Current Affairs 23rd August 2022

1.   INDIA’S ENVIRONMENTAL COMMITMENTS

  • News: Earlier this month, the Union cabinet upgraded two of India’s climate targets for 2030. India is late in doing so but may formally share the goals with the UN ahead of the next climate change summit in Egypt in November. While policy experts largely praise the development, some argue these targets could have been more ambitious.
  • What are Nationally Determined Contributions:
    • Nationally determined contributions (NDCs) are at the heart of the Paris Agreement and the achievement of these long-term goals.
    • NDCs embody efforts by each country to reduce national emissions and adapt to the impacts of climate change.
    • The Paris Agreement (Article 4, paragraph 2) requires each Party to prepare, communicate and maintain successive nationally determined contributions (NDCs) that it intends to achieve.
    • Parties shall pursue domestic mitigation measures, with the aim of achieving the objectives of such contributions.
    • NDCs are submitted every five years to the UNFCCC secretariat.
    • In order to enhance the ambition over time the Paris Agreement provide that successive NDCs will represent a progression compared to the previous NDC and reflect its highest possible ambition.
  • Latest commitments against old commitments:
    • The fresh promise for 2030 is in terms of emissions per unit gross domestic product, which India now wants to lower by 45% from 2005 levels. The earlier goal was 33-35%.
    • The other NDC is to meet 50% of energy needs from non-fossil sources by 2030. India has crossed its existing 40% target, though that did not include hydro power, which makes the new target more ambitious. However, achieving this would require India to almost triple non-fossil capacity in eight years, which is much faster than the historical pace.
    • Another pledge that Modi made in absolute terms, that of achieving 500 GW renewable capacity by 2030, found no mention, which could mean continued reliance on thermal power to meet India’s growing energy demand. India is already set to miss its 2022 goal of 175 GW green energy capacity, largely owing to a slowdown on solar and wind in the last two years. The country’s renewable energy capacity was 114 GW at June-end.

  • India’s 2015 NDCs mentioned increasing carbon sink by 2.5-3 billion tonnes of CO2-equivalent by 2030. There has been no update since the Cabinet’s approval in 2019.

2.   NATIONAL ASSET RECONSTRUCTION COMPANY LIMITED

  • News: The chief executive of National Asset Reconstruction Co. Ltd (NARCL) will earn a total remuneration of ₹1.7 crore per annum, significantly higher than the salaries of the chief executives of some of the large state-owned banks, whose stressed loans the bad bank will be managing.
  • About National Asset Reconstruction Company Limited:
    • NARCL has been incorporated under the Companies Act and has applied to Reserve Bank of India for license as an Asset Reconstruction Company (ARC).
    • NARCL has been set up by banks to aggregate and consolidate stressed assets for their subsequent resolution.
    • PSBs will maintain51% ownership in NARCL.
  • About India Debt Resolution Company Ltd. (IDRCL):
    • IDRCL is a service company/operational entity which will manage the asset and engage market professionals and turnaround experts. Public Sector Banks (PSBs) and Public FIs will hold a maximum of 49% stake and the rest will be with private sector lenders.
  • Need:
    • Existing ARCs have been helpful in resolution of stressed assets especially for smaller value loans. Various available resolution mechanisms, including IBC have proved to be useful. However,considering the large stock of legacy NPAs, additional options/alternatives are needed and the NARCL-IRDCL structure announced in the Union Budget is this initiative.
    • Resolution mechanisms of this nature which deal with a backlog of NPAs typically require a backstop from Government. This imparts credibility and provides for contingency buffers.
    • Hence, GoI Guarantee of up to Rs 30,600 crore will back Security Receipts (SRs) issued by NARCL.
    • The guarantee will be valid for 5 years.
    • The condition precedent for invocation of guarantee would be resolution or liquidation.
    • The guarantee shall cover the shortfall between the face value of the SR and the actual realisation. GoI’s guarantee will also enhance liquidity of SRs as such SRs are tradable.
    • The NARCL will acquire assets by making an offer to the lead bank. Once NARCL’s offer is accepted, then, IDRCL will be engaged for management and value addition.

3.   INTERNATIONAL CONVENTION ON STANDARDS OF TRAINING, CERTIFICATION AND WATCHKEEPING FOR SEAFARERS

  • News: In a bid to aid the movement of seafarers between the two countries, India and Iran on Monday signed a memorandum of understanding on recognition of Certificates of Competency in Unlimited Voyages to help seafarers from both countries as per the provisions of the International Convention on Standards of Training, Certification and Watch Keeping for Seafarers, 1978.
  • About the Convention:
    • International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW), 1978 sets minimum qualification standards for masters, officers and watch personnel on seagoing merchant ships and large yachts.
    • STCW was adopted in 1978 by conference at the International Maritime Organization (IMO) in London, and entered into force in 1984.
    • The Convention was significantly amended in 1995 and 2010 enter into force on 1 January 2012.
    • The 1978 STCW Convention was the first to establish minimum basic requirements on training, certification and watchkeeping for seafarers on an international level.
    • Previously the minimum standards of training, certification and watchkeeping of officers and ratings were established by individual governments, usually without reference to practices in other countries.
    • As a result, minimum standards and procedures varied widely, even though shipping is extremely international by nature.
    • The Convention prescribes minimum standards relating to training, certification and watchkeeping for seafarers which countries are obliged to meet or exceed.

 

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