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1.BS vi norms- so near or far (Indian Express)

2.What does Moody’s upgrade does not change for Indian Economy? (Live Mint)

3.Facts to know about largest transnational Ramsar sites (Down to Earth)

1.BS vi norms- so near or far (Indian Express)

Synoptic line: It throws light on the issue of implementation of BS iv standards and its implementation. (GS paper III)

Overview

  • Govt now wants superclean fuel in Delhi by April next year. Can automakers supply the cars? What are the practical, financial and technological hurdles to meeting the deadlines on govt’s clean fuel roadmap?

Road to introduction for BS standards

  • This is the second time that the government has shifted the goalposts in January 2016, it had decided to skip BS-V and go directly to BS-VI, but only by 2020.
  • On the face of it, the November 15 decision by the union Petroleum Ministry to advance the introduction of BS-VI grade petrol and diesel in Delhi by two years to April 2018 appears to be a logical step in fighting air pollution. Delve deeper, and doubts emerge over possible implementation impracticalities.

Possible problems

  • First, it took as many as seven years for the entire country to shift to BS-IV. The attempt this time is to leapfrog one stage BS-V altogether, and that makes the switch to BS-VI that much more difficult for both the oil companies and automobile makers.
  • This is the second time that the government has shifted the goalposts in January 2016, it had decided to skip BS-V and go directly to BS-VI, but only by 2020.
  • Second, the introduction of higher grade fuel will be beneficial only if it is done in tandem with the rollout of BS-VI compliant vehicles. Using BS-VI fuel in the current BS-IV engines or, conversely, running BS-VI engines on the current-grade fuel, may be ineffective in curbing vehicular pollution, and may damage the engine in the long run.
  • Third, even if automakers were to bring forward their manufacturing schedules, it doesn’t make practical sense for them to build BS-VI compliant vehicles for just one city.
  • Also, carmakers give technical reasons (explained below) for why the first lot of BS-VI vehicles is likely to miss the government’s April 1, 2018 deadline. The full migration to manufacturing only BS-VI vehicles nationwide can happen only by April 1, 2020, automakers say.

Sulphur content

  • The main difference between BS-IV and BS-VI (which is comparable to Euro 6) is in the amount of sulphur in the fuel. BS-VI fuel is estimated to bring around an 80% reduction in sulphur content from 50 parts per million (ppm) to 10 ppm. Also, according to analysts, NOx emissions from diesel cars are expected to come down by nearly 70% and, from cars with petrol engines, by 25%.
  • For automakers, the big hurdle in jumping directly from BS-IV to BS-VI norms lies in equipping cars with two key fitments, and road-testing them within the time schedule.
  • Implementation of the intermediate BS-V standard was originally scheduled for 2019. While this stage has been bypassed, the BS-VI standard, originally set to come in by 2024, was advanced by four years, in line with India’s promises at the 2015 Paris Climate Change Conference, and the broad public sentiment against the air pollution in major Indian cities.

The BS Norms

  • The BS- Bharat Stage emission standards are norms instituted by the government to regulate the output of air pollutants from internal combustion engine equipment, including motor vehicles. India has been following European (Euro) emission norms, although with a time lag of five years.
  • India introduced emission norms first in 1991, and tightened them in 1996, when most vehicle manufacturers had to incorporate technology upgrades like catalytic converters to cut exhaust emissions. Fuel specifications based on environmental considerations were notified first in April 1996 to be implemented by 2000, and incorporated in BIS 2000 standards. Following the landmark Supreme Court order of April 1999, the Centre notified Bharat Stage-I (BIS 2000) and Bharat Stage-II norms, broadly equivalent to Euro I and Euro II respectively. BS-II was for the National Capital Region and other metros; BS-I for the rest of India.
  • From April 2005, in line with the Auto Fuel Policy of 2003, BS-III and BS-II fuel quality norms came into existence for 13 major cities, and for the rest of the country respectively. From April 2010, BS-IV and BS-III norms were put in place in 13 major cities and the rest of India respectively.
  • As per the Policy roadmap, BS-V and BS-VI norms were to be implemented from April 1, 2022, and April 1, 2024, respectively. But in November 2015, the Road Transport Ministry issued a draft notification advancing the implementation of BS-V norms for new four-wheel vehicle models to April 1, 2019, and for existing models to April 1, 2020.
  • The corresponding dates for BS-VI norms were brought forward to April 1, 2021, and April 1, 2022, respectively. Soon afterward, however, Road Transport Minister announced that the government had decided to leapfrog to BS-VI from April 1, 2020, skipping BS-V all together.

Investment needs

  • The full transition to BS-IV took from 2010 to April 2017, because refiners were unable to produce the superior fuel in required quantities. Broadly, BS-IV petrol and diesel have 50 ppm of sulphur, as compared to 150 ppm for petrol and 350 ppm for diesel under BS-III standards. Oil companies are learnt to have put in Rs 30,000 crore between 2005 and 2010 to upgrade; the auto industry claims to have made a similar investment. Oil firms will have to invest another about Rs 40,000 crore to upgrade to BS-VI; additional investments by automakers will inevitably raise the prices of vehicles.
  • The auto industry argues that the huge improvements in vehicular technology since 2000 have had little impact in India due to driving, road and ambient conditions. The technology that will be used in future BS-VI vehicles, though, will have considerable impact, they claim. BS-V diesel vehicles were to have engine upgrades, particulate filters, lots of sensors, and electronic control. Petrols were to have catalyst and electronic control upgrades.
  • Industry estimates of required investment to upgrade from BS-IV to BS-V were to the tune of Rs 50,000 crore. DPFs (diesel particulate filters) have specific problems in the Indian context, and would have to be optimised for these conditions. Low driving speeds would make it difficult to achieve temperatures of 600 degrees Celsius required to burn the soot in DPF, and equipment manufacturers would have to work with temperatures of 400 degrees. Usually, diesel is injected to increase temperatures, but excess fuel in the compartment can cause a fire. The integrity of the vehicle too has to be considered this would require validation tests over 6-7 lakh km, which may take up to four years.
  • BS-VI vehicles, too, require DPFs; in addition, they have to be equipped with an SCR (selective catalytic reduction) module the optimisation and fitment of which, too, could take an estimated three-four years.

Way ahead

  • At every stage, the technology is increasingly more complex. To attain the specified super low emissions, all reactions have to be precise, and controlled by microprocessors. Since BS-V is to be skipped entirely, both DPF and SCR would need to be fitted together for testing, which, auto firms say, would make it extremely difficult to detect which of the technologies is at fault in case of errors in the system. Ideally, the technologies must be introduced in series, and then synergised. It’s no surprise that auto firms are not too enthusiastic about the shift.

Question– What are the problems associated with moving forward with BS standards in India? What steps can be taken in its regard?

2.What does Moody’s upgrade does not change for Indian Economy? (Live Mint)

Synoptic line: It throws light on the impact of recent economic upgrade given by Moody’s. (GS paper III)

Overview

  • The ratings upgrade India received from Moody’s Investors Service last week after a gap of 13 years is a big boost to investor sentiment, and is likely to lower borrowing costs of Indian firms. But what the upgrade does not change is the fact that India’s near-term economic outlook has deteriorated because of global and domestic headwinds.

Changed indicators

  • Entire reduction in the fiscal deficit under the National Democratic Alliance government can be attributed to increased taxes on petrol and diesel. The centre’s tax revenue from petrol and diesel rose from 0.44% of gross domestic product (GDP) in 2013-14 to 1.44% of GDP in 2016-17, a gain of 1 percentage point or 100 basis points (bps). This has precisely been the extent of improvement in the fiscal deficit over the same period, from 4.5% of GDP in 2013-14 to 3.5% in 2016-17.
  • The fall in oil prices allowed the government to raise fuel taxes without sparking any outcry by consumers but the rising price of crude oil has changed that. After raising the excise duty on petrol and diesel nine times since November 2014, the Union government was forced to cut excise duty on those items last month, forgoing significant revenue.
  • The reversal in the global commodity cycle also impacts growth and incomes in India adversely. India was one of the biggest beneficiaries of declining commodity prices, experiencing terms-of-trade windfall gains amounting to 3.4% of GDP in 2015-16, according to estimates by the International Monetary Fund (IMF). IMF calculates the windfall gains by estimating the change in disposable income arising from commodity price changes.
  • The terms-of-trade windfall gain declined to 0.6% of GDP in 2016-17, and has turned negative for India in the current fiscal year, according to IMF estimates published in the latest World Economic Outlook report.
  • Higher oil prices, therefore, dampen the outlook on the economy as they drag down growth, tend to widen the twin deficits (fiscal and current account), and raise inflationary risks. Among the major emerging market economies, India remains particularly vulnerable to rising oil prices, as it now imports almost 90% of its petroleum requirements.
  • Oil is not the only factor that has put a strain on public finances. The uncertainty over revenue from the goods and services tax (GST) and the significant spending by state governments on farm loan waivers all add to the deterioration in the outlook for India’s public finances, which appear to be in weaker shape compared to emerging-market peers despite the improvement in recent years.

Fiscal metrics about India

  • In upgrading India’s sovereign rating, Moody’s cited a deterioration in fiscal metrics as a key risk factor even as it noted the likelihood of further upgrades if the metrics improve. How the fiscal metrics shape up over the next year will depend to a large extent on whether the government resists the temptation to splurge in the last full budget ahead of the next Lok Sabha elections.
  • Any deterioration in fiscal metrics will also likely add to inflationary pressures which have begun buildig up again, lowering the room for rate cuts. Given the central bank’s inflation targets, there doesn’t seem to be any room for rate cuts over the next few months, even without taking into account possible fiscal slippages.
  • In the event of a sharp rise in oil and commodity prices, and deterioration in the twin deficits, the risks of capital outflows will increase sharply. Rate cuts may only exacerbate such outflows at a time when global yields are expected to rise.

Way ahead

  • Thus, the risks to India’s macroeconomic stability are far higher today than they have ever been over the past three years. Several tailwinds that helped India repair its macroeconomic balance sheets and attract capital inflows such as favourable commodity prices and low global yields are turning into headwinds today, even as the room for policy action has shrunk. Will our policymakers reconcile themselves to the new reality and shun adventurism in the coming months?

Question– What should be the govt.’s methodology to keep the economic growth on an upper trajectory in the wake of weak market demands?

3.Facts to know about largest transnational Ramsar sites (Down to Earth)

Synoptic line: It throws light on some important facts about the transnational Ramsar site. (GS paper III)

Wetland habitats

  • Wetlands are not only home to rich ecosystems, but also one of the major shields against climate change. Acting as carbon sinks, they may store millennia worth of emissions in unassuming peaty marshlands. Recently, there has been a significant addition to the growing list of protected areas under the Ramsar Convention on Wetlands. The Congo Basin, one of the largest freshwater bodies in the world, is now home to the largest transboundary Ramsar Site.

Agreement on transboundry wetlands

  • The governments of the Democratic Republic of Congo (DRC) and the Republic of Congo have signed a joint agreement for management of “three exceptional Ramsar sites”, covering both banks of the Congo River. Martha Rojas Urrego, Secretary of the Ramsar Convention on Wetlands, shared historic news of the transboundary site on social media.

Key facts regarding wetlands

In light of this event, here are some key aspects worth knowing:

  1. The new transboundary sites cover an area of 129,000 sq km, with over 60,000 sq km in both DRC and the Republic of Congo.
  1. The Congo Basin is home to one of the world’s most diverse ecosystems, with approximately 10,000 species of tropical plants found here. The area is also home to many endangered animal species like leopards, mountain gorillas, okapi and the African elephant.
  1. The Grands affluents(‘large tributaries’ in French) across the Congo River, as well as Lake Tele and the Likouala-aux-herbes River, are part of the transboundary sites in the Republic of Congo.
  1. The Ngiri-Tumba-Maindombe–a vast area of forests, permanent and seasonal lakes and marshlands is in the DRC and it forms a part of the transboundary site. For a long time, it was the world’s largest wetland of international importance.
  1. The Ngiri-Tumba-Maindombe houses a nature reserve home to the largest continental freshwater mass in Africa. Due to its location at the heart of the Congo basin, the area has several water bodies that not only support biodiversity but also the site’s neighbouring countries. Various species of monkeys, waterfowl and buffalo are found here. Local communities depend on it for fishing, hunting, agriculture and collection of forest products.

Ramsar Convention

  • The Ramsar Convention has six partner organisations and 169 participating countries that offer technical, on-field and financial support. Ramsar sites are ‘Wetlands of International Importance’ as decided by the Convention’s contracting parties.
  • They are selected on the basis of ecological, botanical, zoological, limnological or hydrological importance. They are named after the city of Ramsar in Iran, where the Convention on Wetlands was signed on February 2, 1971. This day is celebrated as World Wetlands Day every year.

Importance of these sites

  • While there are 20 transboundary Ramsar sites worldwide, the first African Transboundary Ramsar Site was established in 2008 when Gambia and Senegal decided on integrated transboundary management plan for Senegal’s Delta du Saloum and Gambia’s Niumi National Park. It was also the first Transboundary Ramsar Site outside Europe.
  • Wetlands in Africa are some of the most critical freshwater masses in the world. Their vegetation controls flooding, regional climate and water quality; and their lakes and rivers are a pivotal resource for subsistence living and tourism.

Question– What should be the govt.’s approach to make the full usage of wetland sites? What dangers are posed to them?

  • Mahesh

    Where are The Hindu articles?