India may lose 3-10% of its GDP annually by 2100 due to climate change: Study

The study looks at the current and projected economic impact of climate change in India

India may lose around 3% of its Gross Domestic Product (GDP) due to global warming of 1° Celsius over pre-industrial levels. At an increase of 3° Celsius, the risk to GDP could rise to as much as 10%. According to a new report by London-based think thank ODI, declining agricultural productivity, sea-level rise and increased health expenditure due to global warming are likely to dent India’s economic prospects.

The study titled, ‘The costs of climate change in India’, is a first-ever literature review on the economic costs of climate inaction in India. It states that India is already experiencing damages at 1 degree Celsius of global warming. Extreme heat waves, heavy rainfall, severe flooding, catastrophic storms and rising sea levels are damaging lives, livelihoods and assets across the country, it says.

The average temperature across India increased by 0.62-degree celsius over the last 100 years. Between 1985 and 2009, western and southern India experienced 50% more heatwave events than in the previous 25 years, it notes.

One of the studies cited in the paper found that India’s GDP would be around 25% higher were it not for the current costs of global warming. The study published last year by Oxford Economics, and authored by economist James Nixon, found out that with 3 degree Celsius of warming, India’s GDP will be 90% lower in 2100 than it would have been without climate change.

“India is already feeling the costs of climate change, with many cities reporting temperatures above 48°C in 2020 and a billion people facing severe water scarcity for at least a month of the year. If action is not taken to cut emissions enough to limit the global temperature rise to 1.5°C, the human and economic toll will rise even higher,” said Angela Picciariello, Senior Research Officer at ODI.

Another study by Ignacio Cazcarro cited in the paper, estimated that  60% of cropland and pastureland in Ganges-Brahmaputra-Meghna and Mahanadi deltas regions is devoted to satisfying demand from elsewhere, and climate change-induced disappearance of this activity would entail local economic losses of 18–32% of GDP.

The report also points out that income and wealth levels, gender relations and caste dynamics will likely intersect with climate change to perpetuate and exacerbate inequalities. The combination of rising cereal prices, declining wages in the agricultural sector and the slower rate of economic growth attributable to climate change could increase India’s national poverty rate by 3.5% in 2040 – equating to around 50 million more poor people that year.

“As we are seeing now with Cyclones Tauktae and Yaas, low-income and other marginalised groups are most vulnerable to the impacts of climate change. They often live in dense settlements that lack basic services and infrastructure that could reduce risk. Many households also live on hazardous sites such as steep slopes and floodplains. It is, therefore, crucial to bring climate and development goals together,” said Amir Bazaz, Senior Lead-Practice at the Indian Institute for Human Settlements.

The study suggests that although India has low historical and per capita emissions,  pursuing a more carbon-efficient and resilient pathway would enable India to climate-proof its development gains average. Incomes in the country remain low and millions still lack access to decent housing, basic services and secure livelihoods which shifts its focus from mitigating climate change, it notes.

India should set more ambitious targets of mitigation for itself because higher levels of global warming will devastate human and economic loss and a more climate-smart development trajectory would potentially yield a range of benefits, including cleaner air, higher rates of job creation and greater energy, food and water security, it notes.

It also advocates ending public support for coal and improving the performance of electricity distribution systems as it could create the space to support economic diversification in regions that heavily depend on coal for jobs and revenues.

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