UNEP report points to huge gaps in funding and technology

The first Adaptation Gap Report by the United Nations Environment Programme (UNEP) released on Friday morning here, says that even with emissions cuts, climate change adaptation costs are likely to hit two to three times the current estimates of  of $70-100 Billion per year by 2050.

The report say that failure to cut emissions will dramatically increase costs and new finance is required to avoid a significant funding shortfall after 2020. Anne Olhoff, lead author of the report said that 29 experts from 19 leading institutions reviewed data for the report and it primarily looks at gaps associated with long term global goals of adaptation. The Green Climate Fund could play a central role in bridging the future adaptation funding gap, she said. The technology gap spans across all sectors but are large in water and agriculture. 

Dr Saleemul Huq, member of the steering committee, said the easier part in the adaptation goal was the money part. The more difficult part is empowering the most vulnerable communities and make positive contributions.Adaptation funding needs are increasing rapidly and the issue of knowledge and adaptive capacity building is not just about money. Vulnerable communities are doing things on their own, he said. 

The adaptation funding gap can be defined and measured as the difference between the costs of meeting a given adaptation target and the amount of finance available to do so. The report comes at a time when countries in Lima are demanding an increasing focus on adaptation and funding and calling for an adaptation goal globally.

The report finds that, despite adaptation funding by public sources reaching $23-26 billion in 2012-2013, there will be a significant funding gap after 2020 unless new and additional finance for adaptation becomes available. Without further action on cutting greenhouse gas emissions,  the cost of adaptation will increase even further as wider and more expensive action is needed to protect communities from the intensifying impacts of climate change such as drought, floods and rising sea levels.

The fifth assessment Report of the Intergovernmental Panel On Climate Change (IPCC) says that existing global estimates of the costs of adaptation in developing countries range between $ 70 billion and $ 100 billion a year globally by 2050.  The report focuses on developing countries where adaptation needs are expected to be the highest and adaptive capacity is often the lowest. On the positive side the report notes that the amount of public finance committed to activities with explicit adaptation objectives ranged between USD 23 to USD 26 billion in 2012-13 of which 90 per cent was invested in developed countries. 

The report points to a number of areas for action and future analysis.

E-commerce vs kirana?

A young woman was setting up house in Mumbai recently. About 85 per cent of her budget was spent shopping at outlets run by chain stores or on websites - to buy white goods, brown goods, furniture … . The only items bought at the traditional retail outlets in bazaars were some electrical and bathroom fixtures and kitchen utensils. Yet business statisticians tell us that organised retail accounts for only seven per cent of the total retail business in India of more than half a trillion dollars. Perhaps this is because about three-fifths of such retail business consists of food items, and perhaps young working women in Mumbai are not part of any representative set.

Still, the growing presence of retail networks is hard to miss, in the (also) growing number of shopping malls and elsewhere. Apart from the Future Group, Shoppers Stop and chains run by India's big business houses (they are all there - Tata, Birla, Ambani, Mittal, RP-Sanjiv Goenka …), there are also speciality outlets like pharmaceutical store chains that, one hopes, are assurance against the supply of fake drugs. Foreign retail chains, reluctantly allowed limited entry, have begun to make their initial moves and, like Ikea, intend to spend big money - sometimes in the billions of dollars. Meanwhile, the big investors can't seem to get enough of the action when it comes to shopping websites - whether Flipkart or Jabong, PropTiger or Urban Ladder. As for publishing, Pranab Mukherjee's book is available only online. In case you haven't noticed, India's retail business is changing, fast.

As with all such change, there are tensions and disputes. Big organised retail is lobbying against the discounting practices of the websites, the government is looking at whether the operations of the websites are on all fours with the law, and the "radio taxi" companies are complaining about the entry of operators like Uber (but also offering discounts in order to compete). Whatever the specifics of these issues, it is hard to argue that change must be stopped.

And so, one wonders: whatever happened to the politicians' oft-stated worry about the fate of 14 million neighbourhood mom-and-pop stores, and the people they employ? Retail trade is the biggest provider of jobs after agriculture and manufacturing; using that argument, politicians blocked foreign investment in the retail business for years on end. Quixotically, though, they did not stop home-grown chain stores from taking root. So was the fuss about local kirana stores, or giving the domestic big boys a protected market
The permission to foreigners to come set up shop, when it was finally given, was hemmed in by riders - how much of the goods sold must be locally sourced, in which cities and states they could do business, and so on. Quite a few states have refused to allow foreign stores, some of them even reversing earlier policy decisions that gave the green light. So it is strange that, when both small and big brick-and-mortar stores are threatened by the emergence of e-commerce, no one is concerned about job losses. Perhaps it is easier to sound off against big bad Walmart than against faceless international financiers of young domestic entrepreneurs who have launched e-commercebusinesses.

Once again, technology has forced the no-changers to risk looking like Luddites. The Left ended its opposition to computers only after the birth of personal computers made it look foolish; ditto now with the advent of e-commerce. In between, foreign investment rules for the media were made irrelevant by rapidly growing traffic on news websites. It is time to take a more open view of the sector, and tap into the advantages of organised retailing - the assurance of quality, the development of supply chains that aid efficiency, and the birth of new vendors whose goods would add to exports by feeding into international supply networks. The net impact might even be an increase in employment

Modi, CMs to discuss Planning Commission

The discussion between Prime Minister Narendra Modi and state chief ministers this Sunday on the sequel to thePlanning Commission is likely to focus on four broad areas.

These are cooperative federalism, Centre-states relationship, future of the five-year planning process, including the ongoing 12th Plan, and what the Commission's replacement should be.

Officials said the CMs have been asked whether they want continuation of the present system of five-year plans, annual plans and state plans or are for junking all of these.  

The meeting will be in two parts. In the first half, the secretary of the Planning Commission, Sindhushree Khullar, will give a presentation on the current state of the Commission and the work being done byit.
“In the second session, Prime Minister Modi will meet the CMs without their aides,” an official said. This is expected to be for about two hours.

Some officials said views were also being sought from some former members and former deputy chairmen of the Commission, on contours of the new body.

In a brief intervention in Parliament on Friday, the PM said the new body to replace the Commission, would be in sync with the changing times. He said the government would involve knowledgeable people and those who could provide new ideas to redefine and restructure the Commission.

“I have convened a meeting of CMs on December 7 for detailed discussion. In the Planning Commission also, there had been discussion on how to bring it in tune with the changing times. Taking all these aspects into consideration, plans are afoot towards a new shape (of the Plan panel),” said Modi.

After his address to the nation on Independence Day, this is the first time the PM spoke in public about the need to reshape the Commission.

In his I-Day speech, he had signalled abolition of the Commission. Thereafter, discussions were held between experts and economists on a new structure. Officials said the new body was to, tentatively, be called ‘Neeti Aayog’ (Policy Commission). It is to comprise four major departments — Direct Benefits Transfer (DBT), inter-state councils, Unique Identification Authority of India, and programme evaluation. Each department will be headed by a secretary.

Some departments are currently under the Commission's charge, with their functions involving other ministries. For instance, the nodal body for DBT is the Planning Commission, while its function on direct cash transfer for cooking gas cylinders is managed by the petroleum ministry. In the case of inter-state councils, some of these are handled by the home ministry.

In between, the role and functions of the Commission were gradually reduced. Its financial might was clipped through a recent circular by the finance ministry, which directed major ministries and departments to furnish their Plan Budget estimates for 2015-16 directly to it.

Planning minister Inderjit Singh told the Lok Sabha planning was relevant in India and the Commission should come to grips with emerging social realities to reinvent itself. He noted states had moved away from allocating government resources in a command and control system, to a more complex role of mediating through policy action and providing favourable conditions for private investment, public goods and essential services.

A $400-bn plan with fair returns will ensure 24X7 power

Power Minister eyes billion-tonne coal output, 100 GW of solar power capacity and $50 bn investments in T&D segment in next five years

A massive overhaul of the power sector is underway with the government planning to bring in a series of amendments to the Electricity Act of 2003 across all segments of the power value chain within the current session of Parliament.

“I am looking at a billion tonne coal production, 100 Gw ofsolar power capacity and investments of about $50 billion in the transmission and distribution segment in the next five years,” said Piyush Goyal, minister of state (independent charge) for power, coal and new and renewable energy, while addressing Confederation of Indian Industry national council meeting, organised in the capital on Saturday.

The Union Cabinet had in November approved the launch of Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) for ensuring 24x7 power supply.

The Rs 43,033-crore scheme would separate agriculture and non-agriculture feeders, facilitate judicious rostering of supply to agricultural and non-agricultural consumers in rural areas, and strengthen sub-transmission and distribution infrastructure in rural areas, including metering of distribution transformers/feeders/consumers. 

In a bid to boost renewable energy, which is targeted to be 15 per cent of the energy mix by 2020, the government is set to impose stringent penalties on errant discoms who fail to meet renewable purchase obligations.

This will be clubbed with a renewable obligation on generators by which all conventional power producers likeNTPC will have to be accountable for some proportion of renewable power.

Significantly, while the minister highlighted the need to revive gas based power projects in the system to create a balance of base and peak power, he also spoke in detail about the reforms and corrective steps being taken to address coal supply and evacuation issues. Some of the steps he cited included increasing the number of rakes involving an investment of $ 1 billion and rationalising coal linkages and swapping to optimise costs and save almost Rs 6,000 crore.

Reforms are also being planned for the floundering distribution companies. The government is providing provisions whereby the entire discom set up will be unbundled. While there will be a government distributor of power to ensure that power is provided to the weaker section of society, competition will be introduced and the private sector role in the sector will be expanded.

Highlighting that the coal and electricity sectors are reflective of the change in governance that the new government has brought about some achievements, he said, “The electricity and coal production has risen by 11.3 and 10.2 per cent, respectively, during the June-October 2014 period.”

Elaborating on how focusing on outcome-oriented actions and time-bound execution has helped in the resolution of key issues, he said, “With hydel capacity being challenged due to a poor monsoon, the government was faced with the Hobson choice of consuming the available stocks and generating more power. The electricity sector was able to increase production by 20 per cent during the June-July –August period.”

He said the coal ordinance is a step in the direction of setting right a wrong of 20 years. Another issue that was resolved satisfactorily through a dialogue with the industry was the issue of anti-dumping duty.

"Going forward, I see a flourishing domestic renewable energy manufacturing industry co-existing with a massive development phase which will achieve the ambitious target of 100 Gw by 2022. This is also reflective of our commitments to environment and climate change.”

Talking about Re-invest, an initiative of the ministry of new and renewable energy to catalyse investments in the sector, he said, “The government is hoping to come forward with a clear cut road map on how to achieve the 100 Gw solar target at Re-invest, which is scheduled in February 2015. We urge the industry to evaluate the business propositions in this sector, make commitments towards green energy and join us in making India a solar super power of the world.”

Discussing the innovative financing models and the new framework that the government is now evaluating, he said, “Innovative financing models have helped make solar energy a viable business proposition. We are looking at graded tariffs to achieve grid parity; provide investors a fair return on investment over the lifecycle of the project and bring in an entity to provide power purchase assurance to investors.”

Emphasising on the business case for investments in renewable energy, particularly for large investors, he said, “Factoring in accelerated depreciation benefits and leveraging the strong balance sheets to avail of the benefits of lower interest rates will help reduce the cost of solar power downwards of Rs 5 and on a par with conventional power. This can change the whole economics of the business.”

Unmanned NASA spaceship blasts off for trial run

A U.S. spaceship designed to one day fly astronauts to Mars blasted off on Friday for an unmanned trial run around Earth.

A Delta 4 Heavy rocket, currently the biggest booster in the U.S. fleet, lifted off at 7.05 a.m. EST (5.35 p.m. IST) from Cape Canaveral Air Force Station in Florida.

United Launch Alliance — a partnership of Lockheed Martin and Boeing — that builds and flies the rocket, delayed launch by one day to resolve a problem with sluggish valves in the rocket’s first-stage propellant system.

Riding atop a fountain of fire, the 24-storey-tall rocket soared out over the Atlantic Ocean, punching through partly cloudy skies as it headed into orbit.

Cars jammed roads for kilometres around the spaceport as thousands of people attempted to catch a glimpse of the launch. The last time crowds this large gathered for rocket-watching was for the space shuttle, which stopped flying in 2011.

“I think it's a big day for the world, for people who know and like space,” NASA Administrator Charles Bolden said during a NASA Television interview shortly before launch.

“Everything may not go right, but everything that does go right means that we've bought down one more risk on this vehicle,” Mr. Bolden said.

NASA has been working on Orion, along with a new heavy-lift rocket, for more than eight years. The design of the rocket has changed, but Orion survived the cancellation of a lunar exploration program called Constellation to become the centrepiece of a new human space initiative intended to one day fly astronauts to Mars.

For its orbital debut, Orion, built by Lockheed Martin, is expected to fly as far as 5,800 km from Earth so that it can slam back into the atmosphere at a speed of about 32,000 kmph.

During re-entry, temperatures on Orion’s heat shield should soar to 4,000°C F (2,200°C), close to what spaceships returning from lunar orbit will experience.

Splashdown in the Pacific Ocean is expected around 11.30 a.m. EST (10 p.m. IST) on Friday.

NASA has spent more than $9 billion developing Orion, which will make a second test flight, also without crew, in about four years. A third mission, expected around 2021, will include two astronauts on a flight that will send the capsule high around the moon.

Since the end of the Apollo moon programme in 1972, astronauts have flown only a few hundred kilometres above Earth.

A voice for the poor and deprived fades away

The legendary jurist V.R. Krishna Iyer, who took up the cause of the poor and the underprivileged in his capacities as a Minister in Kerala, a Supreme Court judge, and post-retirement, a human rights activist, is no more. He was 99.

Justice Iyer is known for a jurisprudence that stood out for its emphasis on reforming the criminal justice system, for landmark judgments, and for the environmental struggles.

The death occurred in a private hospital here around 3.30 p.m. on Thursday. He was admitted to the hospital on November 24 with chest congestion, high blood pressure and poor food intake.

He suffered a stroke on December 1 and his left side was paralysed. He was unconscious since Thursday morning, a doctor in the hospital said. The death followed a cerebral vascular accident because of the worsening cardiac condition and renal failure, along with respiratory tract infection. He suffered cardiac failure in 2012 and had been experiencing a renal condition since then. However, despite his illness, he had wonderful clarity of mind, the doctor said.

His son Paramesh Krishna Iyer and daughter-in-law Indrani were at his side at the time of his death. His wife predeceased him. He is survived by two sons.

Justice Iyer’s body, which was brought to his residence, “Satgamaya,” in the evening, will be kept at the Rajiv Gandhi Indoor stadium from 9 a.m. to 2 p.m. on Friday for the public to pay homage. The funeral will be conducted at the Ravipuram crematorium in Kochi at 6 p.m.

“Without exaggeration or pessimism, I may sum up my long period in this world as the ‘home of lost causes, forsaken beliefs, unpopular names and impossible loyalties.’ What redeems my mind and mood is the satisfaction that I have dedicated my capacities not for making money but for wiping the tears of others — this being my tryst with destiny,” he said in the preface to his autobiography, Wandering in Many Worlds.

This humane bent of mind was on display earlier this year, when Justice Iyer, braving ill health, actively campaigned against the death penalty for the convicts in the Rajiv Gandhi assassination case. When the Supreme Court commuted the sentence, he wrote in an article, The barbarity of the death penalty, inThe Hindu: “This marks a point where India has touched its cultural Everest.”

India's GDP growth will overtake China's over 2016-18: Goldman Sachs

A day after global brokerage firm Macquarie painted a rosy picture of the Indian economy and raised its target level for the stock indices for the next 12 months, Goldman Sachssaid India was set to overtake China and become the fastest-growing emerging market during 2016-18.

Goldman Sachs India managing director and chief Indiaeconomist Tushar Poddar and chief Asia-Pacific strategist Timothy Moe said on Thursday they believed the Indian economy was beginning a new growth cycle, driven by reduced macro imbalances, benign global conditions (lower commodity prices) and structural reforms.

The Asia-Pacific research division of the foreign investment banking firm believes the Indian economy is on the mend. In 2015, Goldman Sachs expects the markets to give 13 per cent returns (after factoring in currency depreciation). The brokerage expects Nifty to close at 9,500 by the end of 2015, which is, however, less than 9,960 predicted by Macquarie.

Structural reforms and the focus on reviving the economy is expected to boost India’s gross domestic product (GDP) growth to 6.3 per cent in calendar 2015 (6.5 per cent in FY16) and 6.8 per cent in calendar 2016 (7 per cent in FY17), forecasts Goldman Sachs. In contrast, it expects China to grow by seven per cent in 2015 and 6.7 per cent in 2016. India’s growth is expected to accelerate in the coming years, while China would witness a gradual slowdown in growth, which economists prefer to describe as “long-landing”.

China's growth in the coming years is expected to remain below seven per cent, while India’s growth revives in the coming years, making it the fastest-growing emerging market. Other emerging markets such as Brazil, Russia and South Africa are expected to grow at a much slower pace on weaker commodity prices.

Even though Prime Minister Narendra Modi has been faulted for his many foreign trips and absence of “big bang” reforms, Goldman Sachs believes that a cyclical recovery has already begun with demand picking up. Financial conditions have significantly eased and liquidity conditions have improved. The government is looking at easing investment conditions in India and focusing on project clearances. Also, 2015 is expected to see a rush of foreign direct investments (FDI) coming into India, thanks to liberalising the defence, insurance and construction sectors.

Moe believes Modi’s recent foreign trips will result in close of $36 billion of FDI in the next calendar year. If the monthly inflow of $3 billion of FDI flows materialises, as anticipated by Goldman Sachs, it would outpace the $29 billion that came into Indian equities in 2010 — the highest in 10 years. In calendar 2013, foreign institutional investors poured in $20 billion into Indian equities, while this year has seen inflows of $16 billion so far.

Goldman Sachs also expects the Indian rupee to remain largely stable against the dollar, thanks to the capital flows. This means that even as the US Federal Reserve begins to increase rates next year, India will not see the kind of turmoil seen in 2013. However, India's rupee could appreciate strongly against other developed market currencies such as the euro and the British pound.

The biggest risk to India's growth story will come from the tardy implementation of reforms. The government has its task cut out as far as reforms in the financial sectors and in governance, labour and technology are concerned. Goldman Sachs believes the government will be able to push through reforms to boost manufacturing and infrastructure, implement goods and services tax, use technology to cut red tape and create a more friendly business environment. However, where the government can falter are labour reforms and pushing through changes in the civil services.