Climate change & trade

Context: A formal submission by China, India and some other
countries to discuss climate change-related trade measures such as those
introduced in the European Union (EU) delayed the opening of the UN climate
conference in Baku, Azerbaijan, on Monday. Trade restrictions on grounds of
promoting climate objectives are expected to trigger more problems, which will
result in greater protectionism and disruptions in global supply chains. On the
other hand, they could also lead to greater innovation in green technologies,
and the adoption of higher environmental standards. However, countries with
limited resources might find themselves at a great disadvantage.

Key points

·      
Overview: Climate change being one of the most pressing
challenges of the 21st century poses significant risks not only to the
environment, human health and food security, but also economic development.

·      
Impact of climate
change in economic development: Reduced Agricultural Output: Climate change can severely disrupt crop
cycles and cause low agricultural yield due to changes in temperature,
precipitation patterns, pest infestation, soil erosion, water scarcity, and
extreme weather events such as floods and droughts.

Disruption of the Fisheries Sector - Rising sea surface temperatures due to climate change
can disrupt the distribution and behaviour of fish species.

Increased Health Costs - Climate change can increase the incidence and severity of diseases such
as malaria, dengue, cholera, heat stroke, respiratory infections, and mental
stress.

Damaged Infrastructure - Climate change can damage physical infrastructure such as roads,
bridges, railways, ports, airports, power plants, water supply systems, and
buildings due to sea level rise, coastal erosion, landslides, storms, floods,
and heat waves.

Reduced Industrial Output - Climate change can increase operational costs and
reduce profits in the industrial sector due to factors such as new
climate-friendly regulations, reduced utilisation of old stock, relocation of
production processes and activities due to climate-related losses.

Energy Crisis - According to the International Energy Agency (IEA), India’s primary
energy demand will double by 2030.

Impact on Financial Services - Climate change can put pressure on financial services
due to increased credit risk for banks and financial institutions. It can
affect borrowers' ability to repay loans due to climate-related events such as
floods, hurricanes, or droughts.

·      
India’s
Initiatives: Panchamrit - India has
presented the following five nectar elements (Panchamrit) of India’s climate
action:

Ø  Reach 500 GW Non-fossil energy capacity by 2030.

Ø  50% of its energy requirements from renewable energy
by 2030.

Ø  Reduction of total projected carbon emissions by 1
billion tonnes from now to 2030.

Ø  Reduction of the carbon intensity of the economy by
45% by 2030, over 2005 levels.

Ø  Achieving the target of net zero emissions by 2070.

National Action Plan on Climate Change - It aims at creating awareness among the
representatives of the public, different agencies of the government,
scientists, industry and the communities on the threat posed by climate change
and the steps to counter it.

·      
Way
forward: Enhancing Carbon
Sequestration - India can enhance its carbon sequestration potential by
expanding its forest and tree cover, restoring degraded lands, promoting
agroforestry, and adopting low-carbon farming practices.

Building Climate Resilience - India can build its climate resilience by
strengthening its disaster management systems, improving its early warning and
forecasting capabilities, investing in climate-proof infrastructure, developing
climate-smart agriculture, enhancing health care services, and empowering local
communities and institutions.

Driving India's Green Transportation Revolution - There is a need to promote electric vehicles (EVs) by
establishing a robust charging infrastructure network and offering incentives
for EV adoption.

Climate Smart Agriculture: There is a need to encourage sustainable
farming practices by promoting organic farming, agroforestry, and precision
agriculture.