A new report on climate change-induced economic loss has calculated that, in 2022, the total GDP loss in India was 8 per cent.
This is one per cent higher than the 7 per cent growth rate of India's GDP in 2022. The absolute figure stood at at $3,385.09 billion—healthy by all measures, especially given the post-pandemic situation, but it could have been better if not for the negative impact of climate change.
Authored by economist James Rising, the report, titled ‘Loss and Damage Today: How climate change is impacting output and capital’ concludes that the world is poorer by $1.5 trillion because of the negative impacts of climate change. In 2022, the population-weighted GDP loss of direct, international and capital losses was 6.3 per cent. A weighted number calculates the impact on the average person within the group, in contrast to say an output-based average which would be biased to the richest populations in the group.
Most of these losses are borne by the Global South. Least developed countries are exposed to an average population-weighted GDP loss of 8.3 per cent, and Southeast Asia and Southern Africa are particularly affected, with countries losing an average 14.1 per cent and 11.2 per cent of their GDP, respectively. India did only slightly better than the LDC average. These losses highlight the disproportionate burden imposed by climate change on developing nations.
Climate change is also exacerbating existing global inequalities, with many high-income countries currently experiencing net gains, including an average increase of 4.7 per cent to the GDP of European countries.
In 2022, India suffered a cumulative decrease of 7.9 per cent in capital wealth, mostly due to climate impacts to human-produced capital (eg. infrastructure). The effect on renewable capital is almost neutral, that is, the negative effect of warming (“direct” effect) is offset by the lesser GDP growth, which means less pressure on natural resources (“feedback” effect).
Since the Rio Convention, 30 years ago, India has lost a total of $3,555 billion to climate change.
It should be noted that GDP is an incomplete measure of climate impacts. It, for instance, does not take into consideration non-market channels such as increased risks of premature mortality and loss of welfare to outdoor workers. Other factors such as biodiversity loss, climate tipping points, vector-borne disease, and human capital loss are also not considered.
Rising said, “The world is trillions of dollars poorer because of climate change, and most of that burden has fallen on poor countries. I hope that this kind of information can clarify the challenges that many countries already face today, and the support they urgently need to address them.”
