Climate Change Poses a Threat to India's Economy
According to the
Reserve Bank of India’s most recent report extreme heat and humidity might
have a negative impact on work hours and threaten up to 4.5 percent of India’s
GDP by 2030.
In talks about it, the
repercussions of climate change on the physical world frequently take central
stage. But what about its effects on the economy? By 2030, it is predicted that
eight crore jobs will be lost globally due to heat stress, with around 3.4 crore
of those jobs coming from India.
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What Climate change are we referring to?
Since records have been
kept in 1901, February 2023 in India was the warmest on record (IMD, 2023).
A large portion of the
nation saw hailstorms and torrential, out-of-season rain in March, raising
fears that growing crops might sustain significant damage. According to India’s
Centre for Science and Environment (CSE), the nation suffered extreme weather
events on 314 of 365 days in 2022, resulting in the deaths of over 69,899
animals1, 1.96 million hectares of cropland, and 3,026 human deaths.
Let’s
examine the impact in many areas to better grasp this.
1. Industries may face high
Operational costs
The
industrial sector can experience higher operational costs and lower
profitability. High costs may result from the implementation of new
climate-friendly regulations, decreased use of outdated inventory, and
investment diversion to greener infrastructure. The economic loss may also
increase as a result of the relocation of industrial procedures and activities
caused by climatic losses.
2.
Greater
vulnerability of the primary sector to climate change
Low agricultural yields can result
from climate change, which can seriously disrupt crop cycles. The main source
of income in India and a major economic contributor is agriculture and related
industries. Low yields have a negative impact on rural economies and can
increase inflation in cities as well.
Around
35 million people in India could be at risk of yearly coastal flooding by the
middle of the present century, and 45–50 million by the end of this decade
(World Bank, 2021).Additionally, the lack of groundwater and the rising sea
level would have serious negative effects on the agriculture and fishing industries.
According to the literature, the
majority of India has been suffering from the negative effects of temperature
on living standards, with the households most affected being mostly dependent
on the agricultural sector for their livelihood.
3.
Rising temperatures are causing
productivity loss and health issues
By
2030, India may be responsible for 34 million of the 80 million predicted
employment losses worldwide due to heat stress-related productivity drop (World
Bank, 2022. Heat stress is defined as heat over what the body can withstand
without experiencing functional harm. It typically happens in conditions of
high humidity and temperatures above 35°C.
Workplace
heat poses a health risk to employees since it limits their physical abilities,
capacity for work, and productivity. Heatstroke, which can be fatal, may result
in extreme circumstances. Health issues could reduce productivity and force
people to leave locations that are more vulnerable to climate risks.
Indian
industry and agriculture are particularly prone to decreases in labour
productivity brought on by heat-related stress (combined with construction
activities) (Somnathan et al., 2021).
4.
Substantial impact on low-income group of people
The ability to adapt
to India varies by state, geography, and socioeconomic status. Low-income
families are especially prone to financial losses brought on by climate change
since they are directly touched by rising cereal costs and falling agricultural
wages.
Therefore, for the welfare of
individuals with fewer resources, coping with climate change may lead to budget
constraints and slow economic progress.
5. Impact
on Service Industry
The
services industry may face a variety of challenges, such as pressure on
financial services brought on, instance, by a rise in insurance claims, as well
as disruptions to travel, transportation, and business services
Climate
policy holds the key to reducing disaster risk and protecting people and
the environment. A comprehensive climate action plan, based on growing public
and political will, involves three major dimensions: design, implementation,
and ongoing evaluation to determine what works and what does not. The strategic
action plan addresses both mitigation – cutting CO2 emissions – and adaptation
– learning to adjust while seeking climate-resilient economic development.
.