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How has climate change affected the Indian economy


A growing body of evidence suggests that climate change is having an impact on the path of countries’ development globally, with obvious ramifications for the economy, the society, and the environment.

According to the World Economic Forum's Global hazards Report 2020, the top five hazards to this path for the next ten years, in terms of likelihood, are all climate-related, including natural disasters, climate change, failure of climate action, biodiversity loss, and extreme weather. Developing nations like India are especially at risk as the world struggles with the effects of climate change. Climate risk will therefore be a key factor in determining company strategy, national-level policy, and reorientation of finance among other things.


Here are a few areas which are going to be affected directly by climate change that causes environmental deterioration. These consist of a vast array of subjects such as agricultural yield, energy crisis, infrastructure stress and demographic inequalities. These are expected to pose a threat to a sustainable future.


  • Lower Crop Yield: Weather patterns may become less predictable as a result of climate change. Farmers' decisions regarding what crops to plant and when to grow them are impacted by uncertainty about monsoonal fluctuations, which lowers productivity.

Additionally, glaciers are expected to become less solid, causing faster snowmelt which will result in decreasing river flow that is usually needed for irrigation.


  • Energy Crisis: The International Energy Agency (IEA) projects that by 2030, India's primary energy demand would have doubled. Because of the unique interaction between energy and climate, rising temperatures necessitate increased energy use in order to help mitigate the consequences of heat. Consequentially, regulations related to climate change are frequently at odds with the expanding energy demands.


  • Impact on Infrastructure: A strong and reliable infrastructure significantly boosts a country's GDP. Climate change's increased extremes of natural disaster have had a significant impact on the infrastructure. For instance, in the past ten years, floods in India have cost the country $3 billion in economic losses,i.e., 10% of the total. Infrastructure, both causes and results in pressurization of ecology in any given area.

  • Impact on Drainage System: With the Indo-Gangetic Plain serving as the "breadbasket", India draws 34% of its annual water supply from the area. Himalayan glaciers are melting faster and more frequently due to rising temperatures and increased seasonal unpredictability. If the rate rises, glacial lakes may overflow their boundaries and river basins supplied by these glaciers may flood. Subsequently, the flows would decrease, leading to a shortage of water.


  • Exacerbation of Inequality: In India, levels of adaptability differ according to state, depending on factors like geography, socioeconomic standing, etc. Low-income families are especially susceptible to financial losses brought on by climate change since they are directly touched by rising cereal costs and falling minimum wages.Therefore, for the welfare of individuals with a decreasing amount of resources, coping with climate change may lead to budget constraints and slow economic progress.

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