Daily News Analysis 03 June 2023

Table of Contents


  1. International trade has a carbon problem

Facts for Prelims

  1. GOBARdhan Scheme
  2. Phukot Karnali Hydro Electric Project
  3. Agni-1 Missile

International trade has a carbon problem

About CBAM:

  1. Background: The EU implemented the Emissions Trading System (ETS) in 2005 to reduce greenhouse gas emissions. However, the EU is concerned that imported products do not face similar emissions pricing, putting its industries at a disadvantage.
  2. Purpose of CBAM: CBAM aims to level the playing field by imposing the same economic costs on imported carbon-intensive products as EU producers under the ETS.
  3. Covered Products: CBAM applies to cement, iron and steel, electricity, fertilizers, aluminium, and hydrogen.
  4. Pricing Mechanism: The price paid for imports will be linked to the average emissions price under the ETS. If carbon pricing is already paid in the country of origin, a reduction can be claimed.


WTO Consistency:

  1. Non-Discrimination Principle: WTO requires equal treatment for \”like\” products regardless of their origin. CBAM may discriminate between goods based on carbon pricing policies or reporting requirements.
  2. Consideration of Product Differences: The debate arises on whether carbon-intensive products covered by CBAM are truly \”like\” products, especially considering differences in production methods.
  3. Violation of WTO Law: CBAM may violate WTO law by discriminating between EU and foreign products based on embedded emissions, as per traditional WTO jurisprudence.

Justification under WTO Exceptions:

  1. General Exceptions Clause: Article XX of GATT allows measures that violate GATT obligations if they fall under specific policy grounds and satisfy the requirements of the chapeau.
  2. Conservation of Exhaustible Natural Resources: CBAM can be justified under this policy ground, but doubts remain about satisfying the chapeau requirement to avoid arbitrary or unjustifiable discrimination.

Implications for India and EU:

  1. India-EU Free Trade Agreement: CBAM is a significant issue in ongoing negotiations. India should collaborate with the EU to address concerns and ensure favorable conditions for Indian exporters.
  2. WTO Challenge: While the possibility of challenging CBAM at the WTO remains open, India should focus on securing gains through bilateral negotiations.


The EU\’s Carbon Border Adjustment Mechanism (CBAM) has raised concerns for India\’s exports of carbon-intensive products. Balancing environmental protection and trade is crucial. CBAM\’s aim to address emissions disparities must be viewed non-discriminatorily. India should strive for favorable outcomes in bilateral negotiations while considering the possibility of a WTO challenge.

GOBARdhan Scheme


Recently, Union Minister for Jal Shakti has launched the Unified Registration Portal for GOBARdhan.

Unified Registration Portal:

  1. Centralized repository for assessing investment and participation in the Biogas/CBG sector in India.
  2. Primary objective: Streamline the process of setting up CBG/Biogas plants in the country.
  3. Allows government, cooperative, and private entities to register for a unique number to set up Biogas/CBG/Bio-CNG plants.
  4. Registration number provides access to benefits and support from Ministries and Departments of the Government of India.

GOBARdhan Scheme:

  1. Initiative launched by the Government of India under the Swachh Bharat Mission Grameen-Phase II program.
  2. Aim: Convert cattle dung, agricultural residue, and organic waste into Biogas, CBG, and bio-fertilizers.
  3. Promotes a circular economy by transforming waste into wealth.

Nodal Ministry: Department of Drinking Water and Sanitation, Ministry of Jal Shakti.

Phukot Karnali Hydro Electric Project


Recently, NHPC Limited and Vidhyut Utpadan Company Limited (VUCL), Nepal signed an MoU for development of Phukot Karnali Hydro Electric Project (480MW) in Nepal.

Phukot Karnali Hydro Electric Project:

Location: Kalikot district, Karnali Province, Nepal. Power Generation: Uses the flow from the Karnali River to generate electricity. Integration: The generated power will be supplied to Nepal\’s integrated power system. Key Features:

Installed capacity: 480 MW.

Average annual generation: Approximately 2448 GWh.

Infrastructure: Includes a 109-meter high RCC dam and an underground power house with six turbines of 79 MW each.

Environmental Consideration: Includes a Surface Power House of 6 MW capacity to minimize environmental impact.

Project Type: Peaking Run-of-River (PRoR) scheme.

Other Hydropower Projects between India and Nepal:

  1. Pancheshwar Multipurpose Project: Located on the Mahakali River.
  2. Lower Arun Hydroelectric Project: Located on the Arun River, a tributary of the Koshi River.
  3. National Hydro Electric Power Corporation Private Limited (NHPC):
  4. NHPC Limited is a Schedule \’A\’ Enterprise of the Government of India and has \’MINI RATNA\’ status.
  5. Incorporated in 1975 under the Companies Act, 1956.
  6. Mandate: Plan, promote, and organize the development of conventional and non-conventional power sources in India and abroad.

Focus: Development of hydropower projects.

Agni-1 Missile


Recently, the Strategic Forces Command conducted a successful training launch of the Agni-1 medium-range ballistic missile from APJ Abdul Kalam Island in Odisha.

Agni-1 Missile:

  1. Range: Agni-1 is a medium-range ballistic missile with a range of 700-900 km.
  2. Design: It is a single-stage missile powered by solid fuel.
  3. Payload: Capable of carrying a nuclear warhead with an estimated weight of 1,000 kg.
  4. Upgrades: Recent upgrades include a new guidance system for improved accuracy and a more powerful warhead for increased destructive capability.
  5. Mobility: It is road-mobile, providing high mobility and making it challenging for enemies to target.
  6. Test-firing and Deployment: First test-fired in 2002, it was deployed by the Indian Army\’s Strategic Forces Command in 2007.
  7. Origin: The Agni-1 missile is part of India\’s Integrated Guided Missile Development Program (IGMDP) initiated in 1983.


  1. Purpose: The program was launched in 1982-83 under the leadership of Dr. APJ Abdul Kalam to research and develop a comprehensive range of missiles in India.
  2. Management: Managed by the Defence Research and Development Organisation (DRDO) under the Ministry of Defence.
  3. Missile Types: The program aimed to develop various types of guided missiles, including:
    1. Short Range Surface-to-Surface Missile (SSM) \’Prithvi\’
    2. Long Range Surface-to-Surface Missile (SSM) \’Agni\’
    3. Medium Range Surface-to-Air Missile (SAM) \’Akash\’
    4. Short Range Surface-to-Air Missile (SAM) \’Trishul\’
    5. Anti-tank Guided Missile (ATGM) \’Nag\’
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