How vulnerable is India’s economy to climate change?

Summary

In this episode of Macro Sura, Deputy Editor Sharad Ragavan and Associate Professor Radika Pand discuss India's vulnerability to climate change, ranking India among the top 10 most affected countries. They highlight the impact on sectors like agriculture, coal, and steel due to climate change and emphasize the need for climate-resilient infrastructure, research, and adaptation strategies. The conversation also covers financing green initiatives, the importance of sustainable growth, and India's approach to carbon taxes and international trade.

Takeaways

• 🌍 India ranks among the top 10 countries most vulnerable to climate change according to global indices, with significant impacts on fatalities and economic losses.
• 🏞️ Certain states in India's eastern region, including Assam, Bihar, and Odisha, are particularly vulnerable to climate change due to their geographic and climatic conditions.
• 🌾 The agriculture sector is highly susceptible to climate change impacts, with marginal farmers being disproportionately affected, leading to crop loss and reduced livelihoods.
• 💧 Water-intensive industries such as thermal coal power plants and steel manufacturing are at risk due to potential water scarcity exacerbated by climate change.
• 🌡️ Extreme heat affects labor productivity, not only in agriculture but also in construction and other outdoor sectors, leading to economic implications.
• 🌱 Developing climate-resilient seeds and investing in agricultural R&D are crucial steps for India to adapt to and mitigate the effects of climate change on agriculture.
• 💧 Effective water management through improved irrigation and water storage infrastructure is essential for enhancing the resilience of various sectors, especially agriculture.
• 💼 The potential impact of climate change on India's credit rating underscores the need for proactive measures to address productivity losses and economic stability.
• 💵 Financing climate change adaptation and mitigation strategies requires a combination of public finance, international support, and private investment, with a focus on concessional finance.
• 🌿 Transitioning towards renewable energy and improving energy efficiency in heavy industries are necessary for India to meet international environmental standards and maintain trade relations.

Q & A

What is India's position in global climate vulnerability indices?

India is ranked among the top 10 most vulnerable countries in global climate vulnerability indices. The Global Climate Risk Index places India as the seventh most affected country by climate change in terms of fatalities and economic losses.

Which Indian states are particularly vulnerable to climate change?

According to a study by the Department of Science and Technology, the Eastern region states such as Assam, Bihar, Odisha, and Mizoram are highly vulnerable to climate change. Another study by the Council of Energy, Environment and Water also identifies Assam, Andhra Pradesh, and Maharashtra as more vulnerable states.

How does climate change impact the agriculture sector in India?

Climate change impacts the agriculture sector in India through crop loss, reduced labor productivity due to extreme heat, and increased food inflation. Small and marginal farmers with less than 0.5 acres of land are disproportionately affected, leading to livelihood challenges.

What are the steps that can be taken to make Indian agriculture more resilient to climate change?

To make Indian agriculture more resilient, the government needs to focus on developing climate-resilient seeds, investing in agricultural R&D, improving irrigation and water storage facilities, and incentivizing farmers to grow less water-intensive crops like pulses and millets.

How can India finance its transition towards climate-resilient infrastructure?

India can finance its transition by leveraging both public and private finance. Public finance could come from international bodies and advanced economies, while private finance could be mobilized through Sovereign green bonds and green deposits in banks.

What is the potential impact of climate change on India's GDP?

Studies suggest that the impact of climate change on India's GDP could range between 3 to 10%, with some global estimates suggesting a peak loss of around 12% due to climate change.

How is India progressing towards its goal of transitioning away from coal?

India is gradually transitioning away from coal, with a shift in international discourse from 'phasing down' to 'transitioning away'. India has been successful in increasing its reliance on non-fossil energy sources beyond its nationally determined contributions for 2030.

What are the challenges and opportunities in India's electric vehicle (EV) infrastructure?

While India faces challenges in developing its EV infrastructure, it has the opportunity to learn from its digital transformation successes, such as the UPI system. Policy formulation, implementation, and the right incentive framework are crucial for progress.

Are carbon taxes and cap and trade policies effective, and should India implement them?

Carbon taxes and cap and trade policies are being considered by many countries, including India. While empirical evidence on their effectiveness varies, India needs to develop its own carbon tax mechanism to claim deductions from the EU's carbon tax and invest in monitoring emission intensities.

How can India address the issue of food inflation exacerbated by climate change?

India can address food inflation related to climate change by making agriculture more resilient through investments in climate-resilient seeds, agricultural R&D, irrigation, and promoting less water-intensive crops.