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The Real Reason Why the Supreme Court Had To Ban Petcoke

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The Supreme Court of India recently imposed a ban on the use of petcoke and furnace oil in the states of Rajasthan, Uttar Pradesh and Haryana which are situated in the National Capital Region (NCR). The ban comes in the wake of several public interest petitions filed before the Supreme Court as well as the National Green Tribunal regarding the alarming rise in air pollution in Delhi and the associated health and environmental hazards.

The Court severely rebuked the Government for its lackadaisical attitude towards addressing the issue despite prior directions being issued by an expert panel appointed by the Court which demanded a prohibition on petcoke and other excessively polluting fossil fuels. Although, petcoke and furnace oil were officially banned in Delhi in 1996, their rampant use in neighboring states by the cement factories, dyeing units, brick kilns and other industries has turned Delhi into India’s air pollution capital.

What exactly is petcoke?

Petcoke is an exceptionally polluting form of carbon which is banned in several countries due to its severe toxicity. It is categorized as a “bottom of the barrel” fuel as it is essentially residual waste material which is obtained after refining coal to extract lighter fuels like petrol. Petcoke is abundantly used in India in several manufacturing industries such as cement, steel and textile and it is generated in vast quantities by refineries as it is significantly cheaper that coal, has high calorific value and is easier to transport and store.

Impact on health

While vehicular fuels like petrol and diesel contain 50 parts per million (PPM) of sulphur oxide, furnace oil contains 23,000 PPM and petcoke contains a whopping 74,000 PPM of sulphur content which is released into the atmosphere as emissions. Apart from sulphur, petcoke also releases a cocktail of other toxic chemicals such as nitrous oxide, mercury, arsenic, chromium, nickel, hydrogen chloride and greenhouse gases (GHG) which contribute to global warming. It is also important to note that petcoke is much more potent than coal and causes greater harm to the environment and health.

According to a 2015 report published by The Lancet Commission, 8 residents of Delhi die each day as a result of air pollution. Delhi has been ranked as India’s most polluted city and is also among the world’s most critically polluted cities.

As per the report, India has topped the list of pollution related deaths in 2015 with a staggering 2.5 million deaths due to pollution. The report also revealed that only a handful of cities in India comply with the air quality standards prescribed by the Central Pollution Control Board and identified that the primary cause behind increasing air pollution as fossil fuels.

In Delhi alone, 2.2 million children suffer from irreversible lung damage caused due to air pollution. Further, air pollution has contributed to a host of diseases including autism, epilepsy, headaches and cancer.

Petcoke has a deleterious effect on the respiratory system and particulate matter can get embedded in lung tissues, causing serious long term health hazards.

India’s carbon tax model and its impact on industry

The reason for the petcoke menace in the recent years can be directly attributed to the Central Government’s inherently flawed carbon tax policy. Carbon tax was introduced in India in 2010 and has since its inception been fraught with complications due to its improper structuring and pervasive maladministration. Among the many intrinsic loopholes in the carbon tax policy is its questionable coverage. Unlike many other jurisdictions such as Australia, the scope of India’s carbon tax is myopically restricted to coal, thereby excluding other forms of greenhouse gases (GHG) emitting fuels like petcoke and furnace oil; many of which have a deeper impact on the environment and health than coal.

Given that the main objective of carbon tax is to mitigate negative externalities of fossil fuels on the environment, and act as a pigouvian tax, logic dictates that it should be applicable on all sources of carbon emissions. A broad based coverage is a necessary component of any progressive carbon tax policy as evidenced from international experience. Yet, the Indian Government has chosen to maintain a narrow coverage, thereby diluting the purpose and efficacy of carbon tax and encouraging polluters to shift from the dirty coal to even dirtier petcoke.

The industry was quick to exploit this obvious loophole and shift from coal to other forms of carbon which were free from the tax bracket. Although petcoke is much more harmful than coal both from an environmental and health perspective, there is no tax or cess levied on the use or production of petcoke.

In order to circumvent the current carbon cess of Rs 400 per metric tonne on coal, cement and steel manufacturers have been heavily relying on petcoke, thereby increasing carbon emissions and air pollution. While India witnessed a decrease in coal imports by 20 million tonnes last year, petcoke imports doubled exceeding 10 million tonnes. In recent years, petcoke is also being used in captive power generation plants in India. Big polluters like Reliance and Essar have capitalized on this demand and made huge profits after the imposition of carbon tax.

India’ carbon tax policy has always been weak and riddled with inefficiencies; however, post GST it has become positively redundant. Earlier, proceeds from the carbon cess used to be accumulated in an earmarked non-lapsable fund known as the National Clean Energy Fund (NCEF). The NCEF was supposed to be used for funding clean energy projects and encourage industries to shift from fossil fuels to clean energy. Yet, over the years the fund has been treated more like a general corpus for the Government to dip into for ad hoc projects. In fact, out of the 57 billion USD accumulated in the NCEF, only a miniscule fraction has actually been deployed towards the original intended purpose. However, the coup de grâce to the NCEF and carbon tax was the introduction of GST under which all the proceeds are now being funneled to compensate states for loss arising out of the introduction of the GST regime.

Currently, China and India are the leading consumers and importers of petcoke in order to catalyze rapid industrialization and economic growth. However, since 2014, China has steadily been decreasing its dependence on petcoke by shifting to cleaner alternatives. India on the other hand, continues to increase its consumption of petcoke and other non-carbon fossil fuels. 

The need to translate words into action

In recent years, the government has experimented with several measures to curb the levels of air pollution and carbon emissions by levying carbon tax, cutting down traffic and most recently banning the sale and use of fireworks in Delhi. However, these measures have been met with lukewarm response due to poorly structured policies and lack of implementation.

The Supreme Court’s ban in a few select states is not going to solve the real problem. Petcoke, furnace oil and other non-carbon fossil fuel based alternatives to coal are used across India to avoid the carbon tax. In the ongoing COP 23 in Bonn this November, India will undoubtedly reiterate its ambitious plans to mitigate climate change by cutting down on carbon emissions and making efforts to switch to clean energy. Over the years, this very same rhetoric has been repeated ad nauseum.

It is high time that talk was translated into action. The need of the hour is to design a long-term sustainable fossil fuel policy which incorporates international best practices and does not allow polluters any flexibility to switch from one fossil fuel to another. Specifically, the carbon tax policy needs to be revamped entirely to reflect India’s ambitious international commitments towards mitigating climate change.

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South Asia

New Government in Bangladesh: Implications for China-Bangladesh Relations

Noor Mohammad Sarker

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The People’s Republic of China is one of the earliest countries to congratulate Prime Minister Sheikh Hasina for her landslide victory by securing two-third majority in the 11th National Parliamentary Election in Bangladesh, held on December 30, 2018. Chinese Ambassador in Dhaka, Zhang Zuo, and his team paid an official visit to the Prime Minister’s Office, Ganabhaban, on December 31, 2018, to hand over the congratulatory messages to the newly elected Prime Minister from Chinese President Xi Jinping and Premier Li Keqiang. This official message denotes China’s continuous support to Bangladesh as well as the potency of their bilateral strategic partnership at the dawn of the twenty-first century.

Over the years, especially since 1990s, China has emerged as a cooperative and reliable partner for Bangladesh in the economic development and national security build-up of the latter. Under the constant rule of Sheikh Hasina and her party, Bangladesh Awami League, in Bangladesh since 2009, the relationship has turned into a comprehensive strategic partnership.

In terms of trade, China, at this moment, stands as the largest trading partner for Bangladesh with more than $10 billion of bilateral trade volume. According to the reports provided by the Export Promotion Bureau of Bangladesh, the amount of country’s total export to China was $808.14 million in the fiscal year 2015-16, compared to the amount of $319.66 million in 2010-11. At the same time, China’s export to Bangladesh in 2015-16 was worth about $9.8 billion, compared to the amount of $5.9 billion in 2010-11. Economists have predicted that, if the current rate continues like this, the bilateral trade volume would reach up to $18 billion in 2021, when Bangladesh will be celebrating its 50th anniversary.

Throughout the last decade, Bangladesh has developed an outstanding political relationship with China as well. For example, when Chinese President Xi Jinping’s paid an official visit to Dhaka in October 2016, Bangladesh received him with the highest official greetings ever. It was the first visit by any Chinese head of the state to Bangladesh in 30 years, which is considered as the biggest diplomatic milestone to their bilateral relationship.

During this visit, both countries signed 27 deals and memorandum of understanding (MoUs) worth an amount of $13.6 billion in trade and investment sectors. President Xi has also offered $23 billion loan to Bangladesh for supporting some large-scale infrastructure projects. Prior to that, in May 2014, the China Major Bridge Engineering Company (CMBEC) was awarded for the construction of Padma Bridge, the biggest ever infrastructural project in Bangladesh.

Bangladesh has been an official partner of China-led Belt and Road Initiative (BRI) since 2016. The country is one of the founding members of the Asian Infrastructure and Investment Bank (AIIB) as well. Geographically, Bangladesh is a part of both overland and maritime routes of BRI. It is a member of Bangladesh-China-India-Myanmar Economic Corridor (BCIM-EC) initiative, which focuses on the revival of the Southern Silk Road under BRI by physically connecting the landlocked provinces of Southern China to the Bay of Bengal. On the other hand, the Chattogram sea-port and its adjacent maritime area of Bangladesh have been an integral part of the 21st Century Maritime Silk Road. The country has, in fact, received the second highest amount of funding from BRI project in South Asian region, after Pakistan.

Apart from these developments, China has also emerged as a strategic security partner for Bangladesh in South Asia over the last decade. In the period of 2011-2015, for example, Bangladesh became the second highest importer of military equipments from China. In order to strengthen the capacity of Bangladesh Navy under the current regime of PM Sheikh Hasian, Bangladesh purchased two submarines from China, named BNS Nabajatra and Joyjatra, both delivered in 2016. Bangladesh also purchased six surface ships from China in between 2009 and 2015, which include two patrol boats with modest anti-surface and anti-submarine capabilities. These technological supports and upgraded equipments from China have enabled Bangladesh Navy to be emerged as a “blue-water” defense force for protecting country’s maritime area.

In terms of education and cultural exchanges, both China and Bangladesh have further developed their cooperation during this period. Several Chinese language institutes have been established, by far, in both public and private universities of Bangladesh. The number of Bangladeshi students studying in China has also been increased significantly with the help of growing number of scholarships from the Chinese government.

Hence, as per the expectations from both sides, the extension of Sheikh Hasina’s government for the third time will contribute to further boost up this bilateral cooperation. China believes that, under the leadership of Prime Minister Sheikh Hasina, Bangladesh will be able to fulfill its “Vision 2021” and, thereby, to become a middle income country by 2021, which would create further opportunities for the promotion of China-Bangladesh friendship in the upcoming days.

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South Asia

Will Pakistan go to IMF finally?

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International Monetary Fund (IMF) was created just after World War II (WWII) in 1945. It was the time of re-organization of the world order after massive destruction of WWII. UN and its organizations were establishing and whole world was passing through reforms. The IMF is an organization of 189 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

The beneficiary of WWII was US, and emerged as leader of World. IMF and World Bank like other UN and International organizations were depending on US funding to some extend and US has been utilizing in expand its economic, political and military influence around the world, frequently. US was involved in appointing head of such organizations directly or indirectly.  I leave it to my readers to judge that if IMF and other organizations have achieved its objectives or not?

Pakistan have been knocking doors of IMF since 1958, and it has been 21 agreement with IMF. Generally, IMF provides loans at very low interest rates, and provides programmes of better governance and monitoring too. But for last 6 decades, Pakistan has suffered a lot, in term of good governance. Especially last 2 decades, corruption, nepotism, poor planning, bribery, weakening of institution, de-moralization of society, etc were witnessed. We may not blame IMF for all such evils, but must complain that IMF failed to deliver, what was expected. Of course, it is our country, we are responsible for all evils, and wrong doings happened to us. We have to act smartly and should have made right decision and on right times.

In fact, beneficiary of corruption, is west, and in some of the cases, west has inspired or protected the corrupt politicians and bureaucrats in the developing nation and Pakistan is no exception to it. At least, IMF failed to monitor the utilization of funds provided.

IMF also dictates its terms and condition or programmes like: devaluation of local currencies, which causes inflation and hike in prices, cut or draw-back of subsidies on basic utilities like fuel, gas, electricity etc, which causes cost of life rather higher for local people, cut on development expenditures like education, health, infrastructure, and social development etc, which pushes the country backward.

Pakistan was no exception to it in the history of our relations with IMF. Last couple of decades, we could not develop our infrastructure, as a result we are back ward and could not take off economically, could not built Dams and suffering from Power shortage and water crisis, Education, health and social sector was ignored and pushed us rather backward.

In past, whenever we approached IMF, US administration was favoring us, but this time, it was witnessed that US may create hurdles or resistance in the form of additional conditions etc.

Based on experience of 6 decades, Government of Pakistan (GoP) have to make decision, weather to go to IMF or not? It is very serious issue and very sensitive decision. GoP is very serious and in close consultations with various experts from within the government and out side the government. There is a group in Pakistan, lobbying for IMF, as it is cheapest and more structured. Pro-IMF lobbies are more close to PM Imran Khan. While, there are experts who are against IMF and feels in past, if IMF was not helpful for Pakistan, then why to go again for the same tested organization. It is worth mentioning that, Pakistan is a diversified nation, and freedom of expression is ensured by constitution of Pakistan, so many controversial opinions are expected – we enjoy the highest degree of freedom. .

In past, politicians were rather easy to coerce and IMF was successful in their missions. But, today, Pakistan is in safe hands and current leadership is honest, loyal and sincere with Pakistan. The PM Imran Khan is a strong man and will take decision based on principles in the best interest of nation.  Sources close to him, feels that till date he is not convince yet, but will take a firm decision soon. His decision will be based on expert advice, national interest and purely merit-based.

However, all other option may be explored and taped, like friendly nations have already extended a hand of financial assistance. Like Saudi Arabia, Arab Emirates, Qatar, Turkey, Malaysia and China. Which has lessen the need of going to IMF to a great extent. It will provide an edge to Pakistan, while negotiating with IMF.

Whatever will be his decision, people of Pakistan trust him and will stand behind him. His decision will be considered the decision of 220 million of Pakistan. Pakistan has a history of “No Default” in last 7 decades to any one of our international obligation or agreement. Pakistan is a civilized, disciplined and matured & resilient nation. We have passed many harsh tests, in last 4 decades and learnt many lessons.

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South Asia

Pakistan Securing Its Maritime Interest and CPEC

Qura tul ain Hafeez

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The IOR is a major sea route that unites the Middle East, Africa, and East Asia with Europe and America. The excessive economic growth of littoral states of Indian Ocean obliges them to protect their energy needs and interests in order to endure their purchasing power. This has great security implications for the sea line of communication of the littoral states of IOR like Pakistan.

Continuing to Pakistan’s interests in IOR the China-Pakistan Economic Corridor has great potential to transmute Pakistan into a central trade platform, which would undeniably gushed the enemies, particularly India, to halt it. The development of Gwadar sea-ports as part of BRI in general  and that of CPEC in particular has amplified India’s concerns’ and aimed for more sophisticated and advanced naval build-up. Furthermore, India perceives the Gawadar port (that is considered as crown jewel of CPEC) as a hazard to its contesting interests in Central Asia countries.  The reason being, India can access Afghanistan, Iran and Central Asian Republics (CARs) only through Cahabahar by passing Pakistan and Gawadar  a deep water sea port that is easily accessible to these land locked states then Chahabahr. A couple of days back on 24th December 2018 India has formally over taken the operational control of Iran’s Cahabahar port – only (0 Km away from Gawadar port. India’s aspirations to become blue water navy in the IOR raise serious concerns among Pakistan’s maritime security. CPEC would lead toward increased maritime politics and contestations not only between Pakistan and India but would also involve China and US.

In such turbulent circumstances Pakistan is required to prepare its sea based defense to secure its sea lines.   Islamabad needs to carefully evaluate its options and develop its strategic response accordingly, involving but not limited to continuous development of its naval capability and an even closer maritime cooperation with China. In view of the prevailing power dynamics in Indian Ocean Pakistan Navyin order to secure its interest in IOR inked a contract with China’s State Shipbuilding Corporation (CSSC)in June 2018 for two, Type 054AP frigates. The agreement is an extension of a previously signed agreement in 2017. Recently on December 19, 2018 steel-cutting ceremony for the second Type 054A frigate for the Pakistan Navy was held at the Hudong-Zhonghua shipyard in Shanghai. The type 054 AP warship frigates will be equipped with modern detection-state of art sensor and Guided Missiles weapon systems; capable of anti-ship, anti-submarine and air-defense operations. According to the report of China Daily report added that the “Type 054A is the best frigate in service with the PLAN”.

It is pertinent to mention here that maritime security is linked with the Economic security and vice versa. Gawader port is one of the most important projects of the CPEC where Pakistan and China are very hopeful that in future this shipping port will generate the revenue for Pakistan’s economy.  There is a big chunk of fishery industry through which Pakistan can earn a lot. It will stimulate business and trade activities at state level and across the region.  The 054 AP frigates ““Will be one of the largest and most technologically advanced platforms of the Pakistani Navy and strengthen the country’s capability to respond to future challenges, maintain peace and stability and the balance of power in the Indian Ocean region” a report on 2nd January 2019 released by  Chinese state owned media said.

In some, to deal with all these existing defies Pakistan Navy (PN) has espoused to a multi divided line of action for safeguarding the port in more effective manners. It conducts security patrolling h and coastal exercises from time to time. Furthermore, previously in 2013 it has inaugurated its Joint Maritime Information Coordination Center (JMICC) in Karachi to provide with an effective mechanism of Maritime Domain Awareness (MDA).  After receiving these 054 AP frigates warship Pakistan will definitely in far more better position to counter India’s vested interests in Indian Ocean region. It will also help secure the Gwadar port which is the chief component of Pakistan maritime trade activities. China has always been an al weather strategic partner of Pakistan. Although India always tries to propagate that CPEC is military agreement instead of an economic one however, securing the economic interests with an advanced mechanism does not mean at all that it’s planning something militarily. Pakistan has always adopted a defensive policy and it is the right of every sovereign state to secure its interests even if they are economic as there is no morality in international politics, still CPEC is an economic project which welcomes every state of the region for economic cooperation  even if it is India as well.

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