Energy transition poses inflation risks


The one member of the RBI’s Monetary Policy Committee (MPC) to vote against continuing with the central bank’s ‘accommodative’ policy stance said that the ongoing worldwide transition to green energy poses a significant risk of triggering energy price shocks similar to the 1970s, which would accelerate inflation.


GS-III: Indian Economy (Growth and Development of Indian Economy, Inflation), GS-III: Environment and Ecology (Environmental Pollution and Degradation, Conservation of Environment and Ecology)

Dimensions of the Article:

  1. Connecting the 1970 energy crisis and the present
  2. What are the Immediate Causes of the Current Crisis?
  3. Was Global Energy Crisis an impending issue?
  4. What would be the Impact of the Crisis on the World?
  5. Back to Basics: What is Greenflation?

Connecting the 1970 energy crisis and the present

  • There were a series of energy crises between 1967 and 1979 caused by problems in the Middle East but the most significant started in 1973 when Arab oil producers imposed an embargo.
  • The energy shocks of the 1970s, prompted by the 1973 Arab oil embargo and the 1979 Iranian revolution, factored heavily in the inflationary forces of that decade.
  • The decision to boycott America and punish the west in response to support for Israel in the Yom Kippur war against Egypt led the price of crude to rise from $3 per barrel to $12 by 1974.
  • This period was also marked by ramped-up government spending on social programs and the war in Vietnam. Increased government spending fueled high consumer demand.
  • The price of petrol rocketed, making all transport more expensive.
  • There were no offsetting tax hikes or spending cuts in other programs to offset the spending. Consequently, demand exceeded supply in the economy for several years, and inflation moved up.
  • This is relatable as currently, oil prices are trading over $80 a barrel even though oil demand has not returned to pre-pandemic levels yet. Many experts think it is only a matter of time before they reach $100.

What are the Immediate Causes of the Current Crisis?

  • Demand Rebound: The rise can be attributed to the bounce back witnessed in consumer demand as economic activity returns to normal after the pandemic. Production, however, has failed to bounce back as quickly due to disruptions to the supply chain caused by the pandemic.
  • Greenflation: The rise in energy prices can also be seen as an example of ‘greenflation’ caused by increasing restrictions placed by governments on traditional energy sources.
  • Unviable Renewable Energy Sources: A fall in generation from other sources has also affected the availability of electricity. Lower production from hydropower plants in the southern regions of China and a decline in output of wind turbines in Europe exacerbated the energy crisis.
  • Coal Output Disruption: Globally, the output of coal mining was affected by heavy rains in countries such as Indonesia and Colombia. Elsewhere, labour shortages caused by the pandemic affected production.

Was Global Energy Crisis an impending issue?

  • Depleting Resources: Currently, fossil fuels contribute to 80% of our energy needs. The supply chains are so severely depleted, the system cannot accommodate any type of disruption. Energy prices are expected to remain high and to go even higher.
  • Access to Energy: The majority of the world’s energy reserves is concentrated in a few regions. Oil reserves are located mostly in Africa, the Caspian Basin, and the Persian Gulf. Around half of the world’s gas reserves are located in Iran, Qatar, and Russia. The strained relationship between many of the nations/regions and high-energy-consuming nations makes future access a bit uncertain.
  • Climate Change: A series of extreme weather events and unusual seasonal patterns have impacted both gas demand and supply. Extreme Winter and Summer temperatures have boosted demand for gas for electricity.
  • High Interdependence: Everyday goods and services are dependent on a complex, international logistics system that has little room for error, with companies prioritizing costs over diversification.
  • Climate Change Policy: Climate policy itself is pushing up energy prices. Carbon allowance prices are reaching record levels, driven by climate reforms. Policies to address climate change may lead to carbon price volatility, which, in turn, could feed energy price volatility.
  • Pace of Energy Transition: Uncertainty about the pace of transition may lead to periodic shortfalls in supply if climate action shutters traditional fossil fuel infrastructure before alternatives can pick up the slack. And if fossil fuel supply is curbed faster than the pace at which fossil fuel demand falls, shortfalls can result in market crunches that cause prices to spike and exacerbate existing geopolitical risks.

What would be the Impact of the Crisis on the World?

  • Sky-rocketing Energy Prices: The prices of natural gas, oil, coal and other energy sources have hit multi-year highs. The price of natural gas in Europe, for instance, has risen by over 400% since the beginning of the year while the price of electricity has risen by over 250%.
  • Impact on Production: China’s factory output in September shrunk for the first time in 18 months, thus putting the brakes on the country’s recovery from the coronavirus pandemic, owing to power disruptions caused by inadequate coal supplies.
  • Supply chain disruption: Since energy prices affect economic decisions across the supply chain, the rise in prices has had a significant impact on economies. The price of domestic natural gas in India, which was hiked by over 60% recently, too has risen in tandem with international prices. Thermal plants that run on imported coal have slashed imports due to rising prices
  • Indian consumers are already paying more for their cooking gas delivered through pipelines and cylinders. Pump prices of petrol, diesel, and compressed natural gas have also been rising.
  • Backlash against Renewables: Going forward, there could also be a backlash against renewable energy as more people realise the economic cost of achieving emission targets. With renewable energy sources such as wind and solar energy turning out to be unreliable especially during winters, countries may be forced to rely on traditional fossil fuels and governments may need to rethink their energy policy.

Back to Basics: What is Greenflation?

  • New government-directed spending is driving up demand for materials needed to build a cleaner economy. While tightening regulation is limiting supply by discouraging investment in mines, smelters, oil fields, or any source that belches carbon.
  • The unintended result is greenflation – rising prices for metals and minerals such as copper, aluminium and lithium, which are essential to solar and wind power, electric cars, batteries and other renewable technologies.

Neither State not Union can bar CBI, Centre tells SC


The Union Government told the Supreme Court that Mamata Banerjee’s government in West Bengal does not have any “absolute” power to keep the Central Bureau of Investigation (CBI) from investigating crimes inside the State.


GS-II: Polity and Constitution

Dimensions of the Article:

  1. Central Bureau of Investigation (CBI)
  2. Functions of CBI
  3. About the current tussle regarding CBI
  4. Union Government’s Argument:
  5. What is General Consent?
  6. Does withdrawal of General Consent mean that the CBI can no longer probe any case in the state?

Central Bureau of Investigation (CBI)

  • The Central Bureau of Investigation (CBI) was set up in 1963 after the recommendation of Santhanam committee under Ministry of Home affairs and was later transferred to the Ministry of Personnel and now it enjoys the status of an attached office.
  • Now, the CBI comes under the administrative control of the Department of Personnel and Training (DoPT) of the Ministry of Personnel, Public Grievances and Pensions.
  • The CBI derives its powers from the Delhi Special Police Establishment Act, 1946, however, it is NOT a Statutory Body.
  • CBI is the apex anti-corruption body in the country – Along with being the main investigating agency of the Central Government it also provides assistance to the Central Vigilance Commission and Lokpal.
  • The CBI is required to obtain the prior approval of the Central Government before conducting any inquiry or investigation.
  • The CBI is also the nodal police agency in India which coordinates investigations on behalf of Interpol Member countries.
  • The CBI’s conviction rate is as high as 65 to 70% and it is comparable to the best investigation agencies in the world.
  • The CBI is headed by a Director and he is assisted by a special director or an additional director. It has joint directors, deputy inspector generals, superintendents of police.
  • CBI has following divisions
    1. Anti-Corruption Division
    2. Economic Offences Division
    3. Special Crimes Division
    4. Policy and International Police Cooperation Division
    5. Administration Division
    6. Directorate of Prosecution
    7. Central Forensic Science Laboratory

Functions of CBI

  1. Investigating cases of corruption, bribery and misconduct of Central government employees
  2. Investigating cases relating to infringement of fiscal and economic laws, that is, breach of laws concerning export and import control, customs and central excise, income tax, foreign exchange regulations and so on. However, such cases are taken up either in consultation with or at the request of the department concerned.
  3. Investigating serious crimes, having national and international ramifications, committed by organized gangs of professional criminals.
  4. Coordinating the activities of the anti-corruption agencies and the various state police forces.
  5. Taking up, on the request of a state government, any case of public importance for investigation.
  6. Maintaining crime statistics and disseminating criminal information.
  7. The CBI acts as the “National Central Bureau” of Interpol in India.

About the current tussle regarding CBI

  • The Union Government has told the Supreme Court that the West Bengal State Government does not have any absolute power to keep the Central Bureau of Investigation (CBI) from investigating crimes inside the State.
  • West Bengal has challenged the CBI’s jurisdiction to register FIRs and conduct investigations in the State in myriad cases. West Bengal said it had withdrawn “general consent” to the CBI way back in 2018.
  • The Union Government, through the Department of Personnel and Training, was responding to a suit filed by the West Bengal Government against the Union of India under Article 131 of the Constitution.
  • Article 131 gives the Supreme Court original jurisdiction (i.e., the Supreme Court can hear the case first-hand rather than reviewing a lower court’s judgment) to mediate disputes between states or between the Centre and states.

Union Government’s Argument:

  • The Union Government has said that the withdrawal of general consent would not stand in the way of constitutional courts entrusting the CBI with the cases “where it is found that the State police would not effectively conduct a fair and impartial investigation”.
  • Besides, it argues that the CBI is empowered to probe cases concerning any of the Central subjects enumerated in the Union List in the Seventh Schedule of the Constitution.
  • It also argues that the alleged crimes under investigation were offences under parliamentary laws.

What is General Consent?

  • In order to conduct an investigation in a state, the CBI must mandatorily have the consent of that state government.
  • The general consent is routinely given by State governments for periods ranging from six months to a year to the CBI and all agencies under the Delhi Special Police Establishment (DSPE) Act, 1946.
  • The consent is necessary as the jurisdiction of these agencies is confined to Delhi and Union Territories under this Act.
  • There are two kinds of consent: case-specific and general. Given that the CBI has jurisdiction only over central government departments and employees, it can investigate a case involving state government employees or a violent crime in a given state only after that state government gives its consent.
  • “General consent” is normally given to help the CBI seamlessly conduct its investigation into cases of corruption against central government employees in the concerned state. Almost all states have given such consent. Otherwise, the CBI would require consent in every case.
  • Other states such as West Bengal, Andhra Pradesh, Rajasthan and Maharashtra have also withdrawn consent to the CBI to operate freely in their respective jurisdictions.

Does withdrawal of General Consent mean that the CBI can no longer probe any case in the state?

  • Withdrawal of consent will only bar the CBI from registering a case within the jurisdiction of such states.
  • The CBI would still have the power to investigate old cases registered when general consent existed.
  • Also, cases registered anywhere else in the country, but involving people stationed in a state that has withdrawn general consent, would allow CBI’s jurisdiction to extend to these states.
  • There is ambiguity on whether the agency can carry out a search in either of the two states in connection with an old case without the consent of the state government.
  • However, there are legal remedies to that as well. The CBI can always get a search warrant from a local court in the state and conduct searches.
  • In case the search requires a surprise element, there is CrPC Section 166, which allows a police officer of one jurisdiction to ask an officer of another to carry out searches on his behalf.
  • And if the first officer feels that the searches by the latter may lead to loss of evidence, the section allows the first officer to conduct searches himself after giving a notice to the latter.

SC on Right to protest and blocking roads indefinitely


The Supreme Court said farmers had the right to protest, but roads cannot be blocked indefinitely.


GS-II: Polity and Constitution (Constitutional Provisions, Fundamental Rights)

Dimensions of the Article:

  1. Understanding Right to protest and the Constitutional Provision
  2. Can Right to Protest be restricted?
  3. Related Supreme Court’s Judgements

Understanding Right to protest and the Constitutional Provision

  • Right to Protest can be derived from the Right to Freedom of Speech and Expression under Article 19. It is not an explicit right under the Fundamental rights.
  • Article 19(1)(a): The Right to free speech and expression, Article 19(1)(b): The Right to association, Article 19(1)(c): The Right to peaceably assemble – allows people to question and object to acts of the government by demonstrations, agitations and public meetings, to launch sustained protest movements.
  • Right to Protest ensures that people can act as watchdogs and constantly monitor governments’ acts.
  • It provides feedback to the governments about their policies and actions after which the concerned government, through consultation, meetings and discussion, recognizes and rectifies its mistakes.

Can Right to Protest be restricted?

Article 19(2) imposes reasonable restrictions on the right to freedom of speech and expression. These reasonable restrictions are imposed in the interests of the following:

  1. Sovereignty and integrity of India,
  2. Security of the State,
  3. Friendly relations with foreign States,
  4. Public order,
  5. Decency or morality
  6. Contempt of court,
  7. Defamation
  8. Incitement to an offence.

Related Supreme Court’s Judgements

  • The Supreme Court hearing the plea regarding Shaheen Bagh Protests in 2019, upheld the right to peaceful protest against the law but also cleared that public ways and public spaces cannot be occupied and that too indefinitely.
  • SC referred to its 2018 judgment in the Mazdoor Kisan Shakti Sangathan vs Union of India and Another case, which dealt with demonstrations at Delhi’s Jantar Mantar.
  • The judgment tried to balance the interests of local residents with those of protesters to hold demonstrations and directed the police to devise a proper mechanism for limited use of the area for peaceful protests and demonstrations and to lay down parameters for this.
  • In Ramlila Maidan Incident v. Home Secretary, Union Of India & Ors. case (2012), the Supreme Court had stated, “Citizens have a fundamental right to assembly and peaceful protest which cannot be taken away by an arbitrary executive or legislative action”.

Odisha to relocate families from Debrigarh wildlife


Recently, the Odisha Government has decided to relocate around 420 families from four zero-connectivity villages in Debrigarh wildlife sanctuary. The relocation is aimed at reducing man-animal conflict and providing better living conditions to the displaced families.


Prelims, GS-III: Environment and Ecology (Protected Areas in news)

Dimensions of the Article:

  1. About the Debrigarh wildlife sanctuary

About the Debrigarh wildlife sanctuary

  • Debrigarh wildlife sanctuary is situated in the Bargarh district of Odisha near Hirakud dam (Mahanadi River) and covers an area of 346.91 square kilometers.
  • It is bounded on the east and north by the huge Hirakud reservoir.
  • It was declared as a wildlife sanctuary on 8th February 1985.
  • It is an important site for in situ conservation of wildlife and its habitat in the state of Odisha.
  • In Debrigarh – Dry deciduous forests is the characteristic Flora. Four-horned antelope, Indian leopard, Indian elephant, sambar, chital, gaur, etc., are the characteristic fauna.




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