Prof. D. Mukhopadhyay, Dr. Kamal Agarwal
Challenges for sustainability faced by the Mother Earth on account of climate change has been a burning issue before the global leaders all across. The Sharm el-Sheik COP27 has just been concluded at Cairo , the capital city of the Egypt where all the leaders of the UNO recognized countries, 195 delegates deliberated in minute details on the consequences of carbon and green house gas emission on the atmosphere and environment which costs havoc in terms of ecological imbalance, deforestation etc. caused by frequent forest fires and abnormally high pollution due to persistent rise in the Mercury which is significantly abnormal . The United States of America and India have been made responsible for highest volume of carbon emission in 2022 by the COP 27 which is certainly a serious issue for any country and it needs serious and immediate attention of the governmental establishments. Hon’ble Minister for Environment , Forest and Climate Change, Government of India represented India in the COP27 held at the Egyptian Capital in November, 2022. It is a fact that global carbon and greenhouse gas emission rate is growing exponentially than that of early 1990s. The Kyoto Protocol adopted on 11th December, 1997, an international agreement, which called for the industrialized nations to reduce their greenhouse gas emission to a significant magnitude. In the similar manner, in the Paris Climate Agreement, on 11th December, 2015, certain resolutions were adopted for reducing carbon emissions at global levels. The Protocol to the United Nations Framework Convention on Climate Change(UNFCCC), the Kyoto Protocol, was adopted at the third session of the Conference of the Parties (COP 3) and the Doha Agreement Amendment on 8th December 2012 that amended the Kyoto Protocol, 1997 .
The Doha Amendment sets a target of reducing greenhouse gas emissions by 18% compared to 1990 levels , average reduction of 5%, for the participating countries. There were 195 Parties being the signatories of the COP 27 and all the countries are observed to have acknowledged the dreadful impacts of greenhouse gas emissions in the atmosphere. The Kyoto Protocol failed to become fruitful due to non inclusion of many developing countries and developed countries such as the United States of America who did not agree to sign the Kyoto Resolution. The Paris Agreement was adopted by 196 Parties at the COP 21 in Paris on 12fth December, 2015. The primary goal of the COP 21 was to limit global warming to below 2 and preferably 1.5 Degrees Celsius, compared to pre-industrialized levels. The Paris Agreement required that all the countries irrespective of economic status must do their part and reduce greenhouse gas emissions. All the signatories to the COP 27 expressed the necessity for doing away with consumption of fossil fuel which is the primary contributor of carbon emission and replace fossil fuel with non-fossil fuels for reaching around 25% of primary energy consumption and enhancing the installed wind and solar capacity . China has already fixed a target for achieving it by 2030 but Pakistan is still depending on coal fired power plants. It is interesting to note that China has been shifting from non-renewable sources of energy to renewable sources but investing in non-renewable energy sectors particularly coal fired power plants in Pakistan. On the contrary, India has been trying hard to reduce carbon emissions by consuming renewable energy more and more and gradually replacing coal fired power plants by solar and wind energy generating systems. The reality behind the use of nonrenewable energy as the source for keeping industrial wheel on motion is purely economic compulsions and is hardly a political phenomenon and similar issues are visible and in place in the African countries by and large.
In order to control the menace of greenhouse gas emissions, the COP 27 has been a witness to an unanimous agreement for establishing a ‘Loss and Damage Fund’ (L & D Fund) and it is certainly a welcome measure and a significant outcome of the COP 27. The fund is objectively to assist the developing countries vulnerable to the adverse effects of climate change. The COP 27 also agreed to establish a ‘transitional committee’ for making recommendations at the UAE COP 28 , 2023 on operationalisation of the ‘L & D Fund’. India has already welcome the measures adopted at the COP 27 as She has been trying to draw the attention of the signatory Parties to the UNFCCC since inception that no country alone could achieve the success in controlling the adverse effects of climate change but an unified effort is necessary . India is ready to extend the possible supports , say, technology and knowledge transfer for capacity building to any country who are prone to be impacted adversely with the effects of carbon emissions. The adverse effects of climate change is undoubtedly herculean in volume and magnitude . Global warming has been causing catastrophic devastation though increasing sea level, salinity in the oceans and typhoons and hurricanes have become the order of the day. These are some of the damages and the causing issues of great concern for which the developing countries are in dire need of funds. Moreover, industrialized nations are factually more responsible for emissions of greenhouse gas than those of the agrarian countries and low industrialized nations across the globe. Therefore , ‘the law of proportionality’ is logically applicable to determine the magnitude of contributions towards building the L & D Fund as has been adopted at the recently concluded COP 27.
Further, certain burning issues need to be addressed and taken into consideration by the agency responsible to make the L&D Fund ope- rationalized. To be more specific, the basis of the quantum of contributions of the Parties to the L&D Fund, should be an annual contribution in totality on the basis of the Paris Agreement more or less. In the Paris Agreement-COP 21, it was proposed that annual contribution should be garnered to the tune of $100 billion. The second issue arises as to who would be delegated by the L & D Authority for managing the financial assets of the fund and who will be the recommending authority for payout from the corpus’ earnings to the concerned vulnerable Parties. Persistent rise in the sea levels due to climate change and environmental impurity is a burning threat to most of the Island nations such as Maldives, Kiribati, Solomon Islands, Fiji, Philippines etc who have been vocal since long for establishing a compensatory fund and it needs to decide whether the nations most vulnerable to the adverse effects of climate change should get priority over other nations while allocating financial resources out of the L & D Fund. Similarly , it should also decide whether firstly a fixed and target amount of a corpus is to be built, say for initial first five years and income generated out of the invested corpus shall be paid out or whether a certain percentage of income generated by the corpus should be capitalized annually and a certain percentage of income shall be paid out .
There may be certain other policy issues that need the attention of UNFCCC. It is pertinent to mention that a new a branch of Accountancy , Management Accounting Theory and Practice’ under the nomenclature-‘Environmental Management Accoun-ting (EMA)’ is in place and and this is in good practice under the ‘Triple Bottom Line, a Sustainability Management Model used in measuring success in the key areas such as Profit, People and Planet. Cost and Management Accountants (CMAs) are the experts in quantifying and measuring the magnitude of adverse effects of climate change and making the requisite trade off between cost and benefit of any project and measuring environmental costs with scientific methods and techniques . Greenhouse gas emissions control and prevention is undoubtedly a global project under the supervision and control of the UNFCCC and, therefore, the responsibility for managing the L & D Fund should be entrusted with the experts attributed with professional education and training. Similarly, each country should also establish a dedicated fund in similar process so that the Parties to the UNFCCC can uninterruptedly contribute to the the L & D Fund regularly without much financial hassles. Global warming is a serious threat to the modern civilization irrespective of geographical topography and economic status of any nation in the world. It may sound sensible to mention the adverse effects of the ongoing Covid-19 Pandemic and many less economically developed countries faced unbearable stress to protect their citizens from the demonized claws of the Pandemic because of poor healthcare services and infrastructures, inadequate research and development and technological know how. Therefore, the UNO should ponder over the issue of establishing, say ‘ Pandemic Rehabilitation Fund’ in the same manner as L& D Fund or any other suitable model. Empirical observations evidence that Covid-19-Pandemic like global disasters takes place normally every century as such ‘the Spain Swine Flue’ had taken place in in 1917. Therefore, a healthy fund may be made readily available to mitigate the challenges arising out of the pandemic or pandemic like situations from the accumulated and compounded earnings of the fund so created. For instance, Tsunami is another thereat to many Island Nations such as Japan, Philippines, Fiji etc across the globe.
The UNO should establish the illustrative funds as mentioned above and it should assess the magnitude of outcome of payouts from the dedicated funds on regular basis by the qualified auditors and cost auditors seem to be the most appropriate professionals having specialized professional education and training and expertise in administering cost audits and exercising cost-benefit analyses. India is the pioneer in developing the systematic and scientific methodology for administering cost audits, for examining the viability and performance evaluation of any project, which is place for last 50 or more years. Cost audit is statutorily performed by the practising CMAs of the Institute of Cost Accountants of India(ICAI) and other countries can also avail the professional services of the practising CMAs of the ICAI . It is a matter of satisfaction that the agendum for establishing a fund for compensating loss and damages caused by climate change as a consequence of emissions of greenhouse gases leading to global warming remaining pending to be resolved for last 30 years has been at the operational stage of logical conclusion as the said agendum has unanimously been adopted at the Cairo COP 27 .
Therefore, this may be a significant development as a historic COP so far ever in the annuls of the UNFCCC. Once the ball starts rolling, it needs little more time for gaining momentum for generating the desired outcomes. As far as India is concerned, She should be much more proactive in curbing carbon emissions not only in global interest but in her own interest too. Besides Delhi-NCR , the city of New Delhi is one of the worst hit metropolitan cities in the country which remains eclipsed by environmental pollution for quite a long duration in a year besides Kolkata and other Indian metropolitan cities across. Therefore, Government of India should take more active initiatives besides the existing measures in order to control and prevent emitting greenhouse gas in the atmosphere as it would reduce the degree of sufferings from many dreadful diseases prone to the consequences of carbon emissions and it would save social cost to a significant extent. A significant percentage of allocation from the exchequer needs to be made every financial year. Besides, the top industry houses may be motivated to make significant contributions to this fund and necessary fiscal benefits under the Income Tax Act, 1961, GST Act, 2017 etc may be provided for as the means of encouragement for contributing to the cause of making India a pollution free nation and achieve the target for reducing carbon emissions as India is one of the prominent Parties to the UNFCCC.
(The author is An Educationist and Former Interim Vice Chancellor, SMVD University, India & Associate Professor at Bangalore Campus , NMIMS University, India)