The Hindu Business Line : Global warming: Hot

Of late, there has been a lot of discussion both in the press and on the TV and radio on the impending doom that mankind might face sooner than expected, due to global warming. It is interesting to note that some Kerala astrologers too have taken up the issue, predicting the world is heading towards a pralaya, as foretold in our puranas.

Even the Reserve Bank of India (RBI) in a communiqué titled Corporate Social Responsibility Sustainable Development and Non-Financial Reporting: Role of Banks, has dwelt on this topic at length. A joint study by Asian Development Bank (ADB), UNDP and ESCAP points out that “India has regressed in the matter of carbon dioxide emission and consumption of ozone-depleting CFCs”.

Understanding the concept

What is global warming? Also called the ‘greenhouse effect’, it describes the gradual increase in air temperature in the earth’s lower atmosphere.

Since the Industrial Revolution 200 years ago, mankind has been releasing extra quantities of greenhouse gases into the atmosphere which trap more heat, enhancing the greenhouse effect. Thus, ‘enhanced’ greenhouse effect is the direct result of human activities. Current computer models have projected global average surface temperature could be anywhere from 1.4 to 5.8 C higher by the end of the present century. The Kyoto Protocol is one of the initiatives taken under the aegis of the United Nations in 1997 to initiate global effort to reduce greenhouse gas emission. A total of 169 countries have ratified the agreement, notable exceptions being the US and Australia.

India and China, which have ratified the Protocol, are not required to reduce carbon emissions under the present agreement, though some developed countries are exerting pressure on India in this regard. The Protocol is a voluntary treaty to reduce greenhouse gas emissions by 5.2 per cent below the 1990 level from 2008-2012. The Protocol aims to tackle global warming by setting target levels for nations to reduce emissions world-wide. The concept of carbon credit is part of the Protocol.

India is in a position to reap maximum benefits from the global carbon trade, as being a developing country, it is exempted from the rigours of the Protocol. It can, however, sell the carbon credit to developed countries. It could emerge as one of the largest beneficiaries accounting for 31 per cent of the world’s total carbon trade, raking in at least $5-10 million over a period of time.

5 commitments

The RBI has exhorted all banks to keep the consequences of carbon emission in mind while assessing and sanctioning loans for projects. In order to make an impact, banks (and also the corporate sector) need to integrate the concepts of CSR with their business strategy through five ‘commitments’, namely:

Sustainability: the idea of prioritising profit maximisation should be expanded to a vision of social and environmental sustainability;

To do no harm: commitment to do no harm by preventing and minimising the environmentally and/or socially detrimental impacts of their portfolios and their operations;

Responsibility: to bear full responsibility for the environmental and social impacts of their transactions;

Accountability: to be accountable to their stakeholders, particularly those affected by the activities and side effects of the companies they finance; and

Transparency: to be transparent to stakeholders, not only through robust regular and standardised disclosure but also through being responsive to stakeholder needs for specialised information on banks’ policies, procedures and transactions.

(The author is a company secretary. blfeedback@thehindu.co.in))

More Stories on : Environment | Society & Development | Impressions

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Cargo controls

Aviation ‘spirit’-ualism

Global warming: Hot

Opportunity in a crisis

Sri Lanka needs political solution

‘We should avoid unfettered access to FII money’

Optimism about 2009

Need to build confidence