Economic Costs of Climate Change in India and Policy Responses

India, one of the fastest-growing economies globally, is projected to grow at 6.8% in real GDP for 2024, outpacing many of the world's largest and emerging economies. Despite this economic success, India faces significant challenges due to climate change, which has severe implications for its growth and sustainability.

Impact of Climate Change on India's Economy

Since 1990, India has lost around 420 million hectares of forest land due to resource exploitation driven by economic and population growth. This deforestation contributes to global warming and climate change, leading to increased frequency and severity of extreme weather events such as floods, cyclones, droughts, and biodiversity loss. These climate-related disruptions have economic repercussions, with India experiencing a loss equivalent to $159 billion, or 5.4% of its GDP, in recent years. This figure could rise to 35% of GDP by 2100 if high emissions continue, significantly impacting the nation's economic stability.

Human and Social Costs

Climate change also poses significant human and social costs. Heat-related incidents alone caused a loss of 191 billion labor hours in 2022 and led to the deaths of 252 people in 2023. The agricultural sector, heavily reliant on monsoon rains, suffers from abnormal rainfall patterns, affecting productivity and livelihoods. Climate-induced migration is another critical issue, with an estimated 45 million Indians expected to relocate by 2050 due to climate disruptions. Additionally, climate change exacerbates malnutrition and health issues, with child stunting projected to increase by 35% by 2050, and diseases related to extreme weather expected to cause 250,000 deaths between 2030 and 2050.

Policy Responses and Initiatives

To address these challenges, India has implemented several policies and initiatives:

Post-Disaster Needs Assessment (PDNA): Adopted in states like Jharkhand, Gujarat, Maharashtra, Meghalaya, and Odisha, PDNA assesses damages and recovery needs post-disaster to mitigate economic losses and plan for future resilience.
Climate-related Financial Risks Guidelines: Issued by the Reserve Bank of India (RBI) for 2024, these guidelines mandate the disclosure of governance, strategy, risk management, and metrics for climate risk assessment and reporting.
Union Budget Allocations: The 2024-25 budget saw a 110% increase in funding for solar power projects and a five-fold increase for the National Hydrogen Mission, highlighting a significant push towards renewable energy.
National Action Plan for Climate Change (NAPCC): Launched in 2008, NAPCC comprises eight missions focused on various aspects of climate mitigation and adaptation, including solar power, energy efficiency, sustainable habitat, green cover, water conservation, strategic knowledge, sustainable agriculture, and Himalayan ecosystem protection. Successes under NAPCC include the installation of 61 GW of solar power and significant advances in energy savings, sanitation, and afforestation.
International Commitments: At COP 26 in Glasgow, India committed to achieving carbon neutrality by 2070 and set targets for 2030, including reaching 500 GW of clean energy, fulfilling 50% of energy requirements from renewable sources, reducing carbon emissions by 1 billion tons, and decreasing carbon intensity by 45%.
Loss and Damage Fund: Conceptualized at COP 27 and adopted at COP 28, this fund aims to support developing nations, including India, in mitigating the adverse impacts of climate change. Around $700 million has been pledged to assist in addressing damage from heatwaves, floods, cyclones, landslides, and other climate-related events.

Conclusion

Climate change poses a significant threat to India's economic growth and social well-being. Comprehensive and effective climate policies are crucial to combatting these challenges. By leveraging national and international initiatives, India can work towards a sustainable future, balancing economic development with environmental preservation.

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