Climate change may cost India 2.8% of GDP, says World Bank

New Delhi: Changing monsoon patterns and rising temperatures driven by climate change could cost India 2.8% of gross domestic product (GDP), says a new World Bank report.

Climate change could depress the living standards of nearly half the India’s population by 2050, which now lives in the vulnerable areas, said the report on the impact of climate change on countries in South Asia.

In a country where over 75% of the population is dependent on agriculture, falling yields from climate change would lead to a decline in living standards for agriculture-dependent households, while the effect on people’s health would worsen the overall impact.

“In India, around 600 million people live in locations that could either become moderate to severe hotspots by 2050 under a business-as-usual scenario, where the living standards would be most affected,” the report stated, identifying states in the central, northern and north-western parts as most vulnerable to changes in average temperature and precipitation.

Low-income states such as Chhattisgarh and Madhya Pradesh, which are also home to large tribal populations, are predicted to be the top two climate hotspots by 2050 that are likely to experience a decline of over 9% in their living standards—followed by Rajasthan, Uttar Pradesh, and Maharashtra. Cities like Kolkata and Mumbai face a substantial risk of flood-related damage over the next century.

The report also highlights that seven out of the top 10 most-affected hotspot districts would belong to the Vidarbha region of Maharashtra.

It is expected that India’s average annual temperatures could rise by 1- 2°C by 2050 even if preventive measures are taken along the lines of those listed in the Paris Agreement, while the rise would be 1.5-3°C if no steps are taken.

“These weather changes will result in lower per capita consumption levels that could further increase poverty and inequality in one of the poorest regions of the world, South Asia,” said report author Muthukumara Mani, a lead economist specializing in South Asia at the World Bank.

To reduce the rising risk to living standards, the report suggests enhancing educational attainment, reducing water stress and improving job opportunities in the non-agricultural sectors.

“A 30% improvement on these measures could halt the decline in living standards by almost 1% from -2.8% to -1.9%,” it stated.