Thought for the day

Climate Change is Likely to Frustrate PM Modi's Ambitions


 
Last updated: 16 January 2025
 
Prime Minister Modi has been making clear for some time that he wants India to graduate from its current emerging market status to become a developed country by 2047. Numerous articles have resulted offering advice on how to do it. But one crucial aspect of the project seems to be missing from all comment: climate change.

Climate change is already damaging India’s economy. A report from the Asian Development Bank estimates (page 44, figure 2.15) that the cumulative impacts from climate change could result in a 13% loss of GDP by 2050 if high emissions continue. By 2070, the losses could amount to a quarter of India’s total economic output.


Climate Change is Likely to Frustrate PM Modi





India is particularly vulnerable to climate change due to the direct impact of water stress, extreme heat and air pollution on economic activity. Increasing evidence of the negative impact of climate change is becoming a driver of asset values and foreign direct investment.

As one of the most water stressed countries in the world, India has 18% of the world’s population but only 4% of its water resources. India could lose up to 12% of its GDP by 2050 due to this vulnerability alone.

India’s average temperature is rising, and extreme heat is becoming a serious problem. Over the last decade, 44% of days in the capital reached temperatures of 35c or more. This was up from 37% in the previous decade. According to the International Labour Organisation, at 33-34c, workers operating at moderate intensity lose half of their labour capacity. Around half of India’s GDP, and 30% of its growth, is dependent on heat-exposed labour. The World Bank therefore estimates that up to 4.5% of India’s GDP is at risk by 2030 due to rising heat and humidity. With the increase in the frequency of days reaching 35c or more in the capital, this loss in GDP will continue to worsen.

Pollution is another major problem. By one metric, India is the third most air-polluted country in the world. This impacts health and productivity and is likely to continue to reduce India’s GDP each year. One estimate suggests New Delhi is already losing as much as 6% of its GDP annually because of high air pollution.

Prime Minister Modi’s ambitious plans may be difficult to turn into reality...
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