Climate change could shave off nearly 3% off India's GDP in future, says the World Bank
World Bankexpect that India’s GDP could fall by 2.8 percentage points by 2050 as a result of the change in rainfall patterns and a 1.5-3°C rise in temperatures
- In addition, living standards for half of India’s population are expected to deteriorate at current rates.
- The states of Madhya Pradesh, Chhattisgarh, Rajasthan, Uttar Pradesh and
Maharashtrawill bear the brunt of climate change.
While a recent report by the World Bank states the obvious - that climate change will be harmful for India’s future economic growth and development - it adds some concerning quantifiable predictions to the mix. The institution’s economists expect that India’s gross domestic product could fall by 2.8 percentage points by 2050 as a result of the change in rainfall patterns and a 1.5-3°C rise in temperatures.
In addition, despite predictions that the future will bring about a vast improvement in living standards due to technology, climate change could actually cause living standards for half of India’s population to deteriorate and income inequality to increase further in the next three decades.
This is largely due to the fact that underdeveloped areas, or “hotspots” and the 600 million people living in them will bear the brunt of climate change. Higher temperatures will result in lower crop yields as well as lower labour productivity in sectors that involve outdoor work like farming and construction. Lower agricultural productivity will translate into lower per capita consumption levels, which are used as a proxy for living standards in this report.
The areas in India that are the most vulnerable to climate change are in the north, central and northwest part of India. Specifically, the states of Madhya Pradesh and Chattisgarh will see the largest decline in living standards - around 9% - followed by Rajasthan, Uttar Pradesh and India’s richest state, Maharashtra. In fact, seven out of the 10 most vulnerable districts are in Maharashtra.
Current mitigation measures are ineffective
A major point of concern is that these changing climate patterns are well underway. Even if India were to impose measures as required by the Paris Climate Agreement in late 2015, temperatures will still rise by as much as 2°C by 2050, as per the report. Earlier this month, The Energy and Resource Institute (TERI) found that India had lost 2.5% of its GDP in 2014-15 due to the degradation of agricultural land.
The World Bank suggested a number of structural fixes to prevent some of the aforementioned consequences from taking place. These include diversifying the economy - or reducing India’s economic reliance on agriculture - improving
The report concludes by stating that India doesn’t have the luxury of choosing not to do anything, estimating that it will lose $1.2 trillion as a result of inaction.
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