Weekly Current Affairs (8th to 14th May 2024) Part - 1 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Central Bank Digital Currency (CBDC)

Context: 

• Recently, the Governor of the Reserve Bank of India emphasised the innovative features being developed for India's Central Bank Digital Currency (CBDC), also known as the e-rupee.

About:

• A CBDC is a digital form of legal tender issued by a central bank.
• Unlike private cryptocurrencies, CBDCs are backed by the central bank, ensuring stability and trust.
• It is equivalent to fiat currency and can be exchanged one-to-one with fiat currency.
• A fiat currency is a national currency not tied to the value of a commodity like gold or silver.
• The digital fiat currency or CBDC can be transacted using blockchain-backed wallets.
• CBDCs, inspired by Bitcoin, differ from decentralized virtual currencies and crypto assets as they are not state-issued and lack legal tender status.

Objectives:

• The primary objective is to reduce risks and costs associated with physical currency handling, such as phasing out soiled notes, transportation, insurance, and logistics.
• It aims to steer people away from using cryptocurrencies for money transfers.

Global Trends:

• Bahamas introduced its nationwide CBDC, Sand Dollar, in 2020.
• Nigeria rolled out eNaira in 2020.
• China piloted a digital currency, e-CNY, in April 2020, becoming the first major economy to do so.

Major Advantages of CBDC

• Enhanced Security: CBDCs employ digital security measures to reduce counterfeiting and theft risks compared to physical cash.
• Improved Efficiency: Digital transactions can be settled instantly and efficiently, enabling faster and cost-effective payments.
• Financial Inclusion: CBDCs can potentially reach unbanked populations by offering a secure digital payment option.
• Enhanced Anonymity: Exploring permanent transaction deletion for user anonymity comparable to cash transactions.
• Offline Functionality: The e-rupee is envisioned to be transferable offline, overcoming internet connectivity limitations in rural areas.
• Programmability: Introducing programmable features for targeted disbursement of government benefits or specific financial behaviors.
• Cross-Border Transactions: Revolutionizing cross-border transactions with instant settlement features, making payments cheaper, faster, and more secure.
• Traditional and Innovative: Gradually shifting towards virtual currency culture by reducing currency handling costs.
• Improved Monetary Policy: Providing central banks with greater control over money supply and interest rates, facilitating more effective monetary policy interventions.

Challenges Associated with CBDC

• Cybersecurity Concerns: Robust security measures are crucial to safeguard the e-rupee system from cyberattacks.
• Privacy Issues: Balancing user privacy with anti-money laundering and counter-financing of terrorism measures is vital.
• UPI Preference and Interoperability: Despite efforts to promote CBDC, retail users show a preference for UPI; efforts are underway to enable CBDC interoperability with UPI.
• Non-Remunerative CBDC: The RBI made CBDC non-remunerative and non-interest-bearing to mitigate bank disintermediation risks, involving non-banks in the pilot for distribution and value-added services.
• Competition with Private Banks: CBDCs may compete with private banks for deposits, potentially affecting their lending and investment capabilities, necessitating coexistence strategies with the existing financial system.
• Monetary Policy: Unclear impact of CBDCs on monetary policy tools like interest rates, requiring adaptation of policies for effective CBDC integration.

Conclusion

• The RBI's commitment to addressing privacy concerns related to CBDC through technological and legislative means underscores India's dedication to successful digital currency implementation.
• Emphasis on anonymity, coupled with efforts to enhance accessibility and functionality, showcases India's progressive approach in adapting to the evolving digital currency landscape.

Interplay of Heat Waves, Anticyclones and Global Warming

Context:

• As the world grapples with the waning phase of the strong El Niño of 2023, the India Meteorological Department has warned of severe heatwave conditions affecting extensive areas of eastern India and the Gangetic Plain.

What Role Do Heat Waves Play in Global Warming?

• Heat waves and anticyclones are currently affecting eastern India and the Gangetic Plain, showcasing the challenge of understanding local weather impacts of global warming.
• Heat waves, stemming from climate change due to fossil fuel combustion, escalate temperatures by trapping heat energy through greenhouse gases.
• Human activities have raised the Earth's temperature by approximately 1.2 degrees Celsius since pre-industrial times, amplifying extreme heat events.
• Global warming induces uneven temperature shifts globally, resulting in diverse local heat wave patterns influenced by factors like land use and geography.
• Comprehending these local impacts is crucial for precise forecasting and effective heat wave management.

What is an Anticyclone?

• Anticyclones are high-pressure systems, contrasting cyclones which denote low pressure regions.
• Wind movement around anticyclones follows a clockwise direction in the Northern Hemisphere and counterclockwise in the Southern Hemisphere due to the Coriolis Effect.
• These systems bring stable, windless conditions with clear skies and dry air, affecting rainfall and humidity levels.
• Summer anticyclones are typically hot and sunny, while winter anticyclones can be cold and clear with morning frost.

Link Between Anticyclones and Heat

• Anticyclones influence heat through their persistence and intensity, impacting Indian weather patterns significantly.
• During the pre-monsoon season, the Indian Easterly Jet (IEJ) and westerly jet can create anticyclonic patterns, leading to dry and hot weather or milder conditions in India.
• Strong IEJ years correlate with higher temperatures and drier climates, while weak IEJ years result in cooler, wetter conditions.
• Understanding the strength and duration of anticyclones is crucial for predicting heat waves accurately and providing early warnings.

Recent Impact of Anticyclones

• Recent anticyclonic activities over the North Indian Ocean caused unusual rainfall in Odisha in March 2024, potentially contributing to floods in Dubai in April 2024.
• These high-pressure systems with sinking air and clockwise winds can form heat domes, intensifying heat waves and impacting weather patterns.

Constructed Wetlands

Context:

• Recently, there has been a shift towards constructed wetlands, which are a more comprehensive and nature-based solution for industrial wastewater treatment, as compared to traditional methods that have proven inadequate in addressing the array of pollutants present.

What are Constructed Wetlands?

• Constructed wetlands have gained attention as a more holistic approach to industrial wastewater treatment, surpassing traditional methods in addressing diverse pollutants.
• These wetlands mimic natural processes using engineered systems, comprising specific vegetation, soil, and water to cleanse wastewater.

Types of Constructed Wetlands

• Subsurface Flow (SSF): SSF wetlands utilize gravel beds or porous media to break down organic matter through microbial activity.
• Surface Flow (SF): SF wetlands feature water flowing above the surface, often creating visually appealing landscapes with varied vegetation.

Benefits of Constructed Wetlands

• Environmental Advantages: They offer habitats for diverse species, contributing to biodiversity, along with ecosystem services like flood control and carbon sequestration.
• Cost-Effectiveness: Constructed wetlands are economically viable, requiring minimal energy and utilizing natural processes for water purification.
• Nutrient Removal: Efficiently eliminates pollutants such as nitrogen, phosphorus, and organic matter.
• Land Restoration: Can reclaim degraded land by reinstating natural wetland functions.

Applications of Constructed Wetlands

• Municipal Wastewater Treatment: Acts as a secondary or tertiary treatment phase, enhancing water quality before discharge or reuse.
• Stormwater Management: Effectively filters stormwater runoff, preventing pollutants and sediments from entering natural water bodies.
• Industrial Wastewater Treatment: Tailored to treat specific industrial wastewater types based on contaminants present.
• Agricultural Use: Treats agricultural runoff, reducing pollution and enhancing water quality for irrigation purposes.

Distinguishing Wetlands from Constructed Wetlands

Challenges Associated with Constructed Wetlands

• Plant Selection: Vital for nutrient absorption and pollutant removal; specific plants like cattails and bulrushes excel at this.
• Land Requirement: Significant land space needed, posing challenges in urban settings.
• Treatment Efficiency: Might not match conventional plants for heavily contaminated water.
• Maintenance Needs: Regular upkeep essential to prevent clogging and ensure functionality.
• Other Challenges: Clear policies, technical expertise, and continuous monitoring essential to optimize performance.

The Way Forward

• Leveraging Global Practices: Learning from countries like Germany and the Netherlands in designing optimal systems.
• Performance Monitoring: Emphasizing clear monitoring protocols to enhance treatment efficiency.
• Implementing in India: Policy support, financial mechanisms, demonstration projects, and community engagement pivotal for successful adoption.

Land Subsidence in Chenab Valley

Context: 

• Recent Incidents in Chenab Valley: Recently, reports have emerged regarding land subsidence in various areas of the Chenab Valley, particularly in Ramban, Kishtwar, and Doda districts, resulting in the destruction of numerous homes.
• Shift from Landslides to Land Subsidence: While landslides were previously common during rainy and snowy seasons in the region, there has been a noticeable increase in land subsidence occurrences over the past decade.

Understanding Land Subsidence

• Definition: Land subsidence, as defined by the National Oceanic and Atmospheric Administration (NOAA), refers to the gradual sinking of the Earth's surface due to movements beneath the ground.

Causes of Land Subsidence:

• Resource Extraction: Activities like water, oil, and natural gas extraction can alter underground conditions, leading to ground subsidence.
• Mining Impact: Mining operations, especially coal mining, can create voids underground, contributing to land subsidence.
• Urban Development: Construction of tall structures and heavy infrastructure can exert pressure on the ground, causing soil deformation and subsidence.

Examples of Land Subsidence:

• Jakarta, Indonesia: Excessive groundwater extraction has caused significant land subsidence in Jakarta.
• Netherlands: Extraction of natural gas has led to substantial land subsidence issues in the Netherlands.

Reasons for Land Subsidence in Chenab Region

• Geological Factors: Soft sedimentary deposits and alluvial soils in the region are prone to compaction under external forces like groundwater extraction.
• Impact of Urbanization: Unplanned construction and urbanization in hilly areas increase pressure on the land, leading to subsidence.
• Hydroelectric Projects: Construction of hydroelectric stations can disrupt natural water flow, affecting land stability.
• Drainage Issues: Inadequate drainage systems worsen subsidence through waterlogging, increased groundwater levels, and soil erosion.

Addressing Land Subsidence Challenges

• Sustainable Development: Prioritizing environmental preservation while utilizing natural resources responsibly is crucial for the Himalayan region's sustainable development.
• Seismic Monitoring: Establishing monitoring networks for ground movements and seismic activity can help in early detection of subsidence risks.
• Regulating Mining: Enforcing strict regulations on mining activities can prevent the creation of voids underground, reducing the risk of subsidence.
• Climate Change Mitigation: Taking steps to address climate change can mitigate factors contributing to land subsidence, such as glacial melting.

Chocolate Industry Meltdown

Context:

• The chocolate industry is currently experiencing a crisis due to the unprecedented surge in cocoa bean prices, which reached a record high of USD 12,000 per tonne in April 2024.
• This surge, nearly quadruple the price observed in 2023, has raised concerns and shed light on the root causes of this turmoil.

Reasons Behind the Rising Prices of Cocoa

El Nino and Climate Change:

• The primary cause of the ongoing crisis stems from the poor harvest season in West African nations such as Ghana and Ivory Coast, which collectively account for 60% of the global cocoa bean supply.
• El Niño, characterized by abnormal warming of surface waters in the equatorial Pacific Ocean, triggered above-average rainfall in West Africa. This created favorable conditions for the spread of black pod disease, leading to the rotting of cocoa pods on tree branches.
• Climate change exacerbates the situation, with heatwaves, droughts, and heavy rainfall posing additional threats to cocoa production. These factors present long-term challenges for both farmers and chocolate manufacturers.

Low Income for Cocoa Farmers:

• A significant underlying issue is the inadequate compensation provided to cocoa farmers in West Africa by major chocolate corporations. These farmers typically earn less than USD 1.25 per day, well below the UN's poverty threshold of USD 2.15 per day.
• The meager income restricts farmers' ability to invest in land improvements or climate resilience measures, leading to detrimental practices like slave labor, child exploitation, and land sales to illegal miners.
• This cycle of poverty prevents farmers from making crucial investments in their land and adopting sustainable techniques, resulting in decreased production and a surge in prices.

Potential Consequences of the Ongoing Crisis:

• The International Cocoa Organization (ICCO) anticipates a global cocoa bean shortage of approximately 374,000 tonnes for the 2023-2024 season. This scarcity is expected to intensify, driving up chocolate prices.
• Experts warn that without wealth redistribution along the supply chain by major chocolate companies, the situation is unlikely to improve. Continued scarcity could lead to further exploitation of farmers and heightened chocolate costs for consumers.

Cocoa Cultivation Requirements

Altitude and Rainfall:

• Cocoa cultivation is viable up to 300 meters above sea level, requiring a minimum monthly rainfall of 90-100 mm and an annual rainfall between 1500-2000 mm.

Temperature and Soil Conditions:

• Ideal cocoa growth necessitates warm and consistent temperatures, typically ranging from 15°C to 39°C, with an optimal temperature of 25°C.
• Deep, well-drained soils are essential for cocoa cultivation. Soil with poor drainage negatively impacts plant growth, with most cocoa plantations situated on clay loam and sandy loam soil. The ideal pH range for cocoa growth is 6.5 to 7.0.

Agroforestry:

• Cocoa trees thrive in shaded environments and are commonly cultivated under taller tree canopies. This agroforestry method helps maintain the necessary microclimate and supports biodiversity.

Cocoa Production in India:

• In India, cocoa cultivation thrives in coconut and areca nut plantations, where cocoa receives 30-50% sunlight under the areca nut canopy.
• Major cultivation areas in India include Andhra Pradesh, Karnataka, Kerala, and Tamil Nadu, often as an intercrop with arecanut and coconut.
• The National Horticulture Mission extends a Rs 20,000 per hectare subsidy to cocoa farmers in Andhra Pradesh for the initial three years.
• The Central Plantation Crops Research Institute conducts structured cocoa enhancement programs through germplasm introductions.