Explained: How the climate change is affecting India's economy
Climate change effect on India's economy: Climate change stands as one of the most significant challenges of the 21st century, presenting a multifaceted threat to the environment, human health, food security, and economic development. India, being the seventh most affected country according to the Global Climate Risk Index 2021, grapples with the adverse repercussions of climate change across various sectors of its economy. In the RBI’s report on Currency and Finance 2022-23, the RBI governor has also expressed his concerns about the impacts of Climate change on India’s economy. In the preface of the report, Shaktikanta Das said, “Climate change-induced risks to the macro-financial prospects of the country and the range of policy options available to mitigate climate risks require dedicated research. Such research becomes even more critical in the context of the complexity and non-linearity of the ways in which climate, economy, financial systems and related policies operate.” Here are the sectors in which climate change has a direct and visible effect despite the authorities’ increasing focus on dealing with these challenges. Impact on agriculture Agriculture, a critical sector in India's economy, faces severe disruption due to climate change. Altered temperature and precipitation patterns, increased pest infestations, soil erosion, and extreme weather events like floods and droughts significantly impact crop cycles and yield. According to India’s Centre for Science and Environment (CSE), the country experienced extreme weather events on 314 of 365 days in 2022, which claimed 3,026 lives, affected 1.96 million hectares of crop area and 4,23,249 houses, and killed over 69,899 animals. The RBI’s report also highlights the extreme weather conditions stating the fact that in 2022, India recorded its seventh wettest January since 1901, the hottest February in 2023 since record-keeping began in 1901, and March was the third driest and warmest ever in 121 years. Considering that agriculture is a major source of livelihood in India, extreme weather conditions can lead to reduced agricultural output leading to inflation in urban areas. Challenges in fisheries Climate change causes disruptions in the distribution and behaviour of fish species due to rising sea surface temperatures. According to the United States Environmental Protection Agency, the Sea surface temperature has been consistently higher during the past three decades than at any other time since reliable observations began in 1880.
