How Did Heat Impact The GDP Of India?

On Thursday, the Climate Transparency Report 2022 was released which mentions that India lost 5.4 percent of its Gross Domestic Product (GDP) because of extreme heat in 2021.

This statistic clearly indicates that climate change has an effect on the nation’s economy and if not looked after, a nation might incur extreme losses.

The Report

The report showcases the findings of the majority of G20 nations and their actions toward climate change. According to the report, despite worsening climate crises and prior to the energy crisis caused by Russia’s invasion of Ukraine, the G20 nations continued the production of fossil fuels which reached $64 billion last year.

The report also mentioned that the losses in GDP due to extreme heat were maximum in India compared to all other G20 nations in the previous year.

“In 2021, rising temperatures have already brought income losses in services, manufacturing, agriculture, and construction sectors. Countries most affected by income losses in these sectors were India (5.4% of GDP), Indonesia (1.6% of GDP), and Saudi Arabia (1% of GDP),” the report said.

How Did Heat Impact The GDP Of India?

Owing to heat exposure, there was a loss of 167 billion potential labor hours in India. It increased by 39 percent from 1990 to 1999. Also, because of climate change, natural occurrences like floods, flash floods, and landslides have taken place in the nation due to which farmers lost $3.75 billion.

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The report mentions, “India’s rice production could decrease by 10–30%, and maize production could drop by 25–70% with temperature increases in a range of 1°C–4°C.”

The report also mentioned that due to extreme heat levels in India and Brazil, 10% of their population is said to experience heat waves in these nations. Heat waves will affect more than 20% of the Brazilian population and nearly 30% of the Indian population if temperatures rise by 3°C.

Relationship Between Climate And Economy

According to the International Monetary Fund (IMF), climate change has a significant potential of causing harm to the economy. If one country’s emissions rise, it affects many countries’ economies at once.

The most at-risk nations are those with low income. The IMF suggests that these countries’ macroeconomic policies will need to be adjusted to accommodate more frequent weather shocks, including by creating policy space to respond to shocks. To improve economic resilience, infrastructure will need to be upgraded.

Climate change can also pose significant risks to macroeconomic stability. Climate damage and stranded assets, such as coal reserves that become uneconomic with carbon pricing, pose risks to nonfinancial corporate sectors, and the disruption could have an impact on corporate balance sheet quality.

Hence, it is harmless to state that climate change can heavily impact the finances of a nation and hence, it becomes imperative for them to discover ways through which they can deal with climatic shocks and losses turn into profits. 

Image Credits: Google Images

Feature image designed by Saudamini Seth

Sources: Hindustan Times, Quint, International Monetary Fund 

Find the blogger: Palak Dogra 

This post is tagged under: climate change, climate, heat, heat waves, heat strokes, economy, economics, finance, gross domestic product, GDP, India, Indian economy 

Disclaimer: We do not hold any right, copyright over any of the images used, these have been taken from Google. In case of credits or removal, the owner may kindly mail us.

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