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Impact of climate change in IndiAN economy.pptx

  1. IMPACT OF CLIMATE CHANGE ININDIAN ECONOMY WRITTEN & PRESENTED BY :- SACHIN PRATAP SINGH BBA-MBA INTEGRATED, SCHOOL OF BUSINESS, UPES DEHRADUN SAP ID – 500091199,ROLL NO :- R270221032
  2. • It is evident that the temperature changes are increasing disparities amongst countries and have economic implications. • Even though there is an enormous variance in the level of economic impact that climate change could have, depending on the geography and the kind of sectors that contribute to the GDP of a country, there usually are a few kinds of economic costs that are clearly visible: • Firstly, the long term impact, where climate change could reduce the productivity/crop yield of any region, which is usually irreversible • Secondly, the temporary damage done to infrastructure (in case of floods, cyclones, hurricanes) which has huge costs for reconstruction • Thirdly, rebuilding power grids that can’t sustain the extreme weather events (However, this could lead to positive impact in the long run as the focus shifts to increasing efficiency or finding alternative sources of energy). These examples showcase the varying degress of the effects climate change could possibly have. • According to another study32, the effects of global warming might vary from time, region, and economic sectors but overall tend to increase. They are relatively higher for poor African and Asian nations with low GDP.
  3. CONTENT:- Impact of Climate change on sectors of Indian economy • Agriculture • Energy • Insurance • Tourism • Human health • Infrastructure • ecosystem • Productivity • Data , fact & figures
  4. IMPACT ON AGRICULTURE • Agriculture in India accounts for a substantial share in GDP (14%), and an even larger share in employment (42%). The criticality of the sector can be judged from the fact that it has a direct bearing on the lives of 1.38 billion people. • According to the 2011 census, 69% of the population remains rural and intimately connected to agriculture sector, which provides forward and backward linkage economy. • The share of agriculture in overall employment dropped to 42% in 2016 from 70% in 1981. • The sector’s contribution has had drastic impacts for the past few years majorly due to unusual rains and frequent droughts. India has experienced 24 large scale droughts from 1891 to 2012 and the frequency has been ever since increasing. • Higher temperatures tend to reduce crop yields and favour weed and pest proliferation. Water is the most critical agricultural input but more than 50% of the total cultivated areas do not have proper irrigation facilities in place. • The negative effects of climate change impact the irrigated crop yields across agro ecological regions both due to high temperature and changes in water availability.
  5. IMPACT ON AGRICULTURE • India is the 4th largest emitter of GHG in the world after China, European Union and the United States. • The energy sector is by far the largest contributor of GHG emissions, accounting for about two-thirds of the total emissions. • There exists a delicate balance between mitigating the harmful emissions produced and providing access to energy. If coal continues to be the dominant source of power, the emissions are bound to increase. • To maintain this delicate balance, India relies on 2 core pillars – Increasing energy efficiency on both demand and supply side, and promotion of low carbon energy sources such as solar and wind power. The Government of India has set a target of installing 175 GW of renewable energy capacity by the year 2022, with 100 GW from solar, 60 GW from wind, 10 GW from bio-power and 5 GW from small hydro-power, and overall 450 GW by 2030. • The amount collected from this tax is deposited in the National Clean Energy Fund. This fund is to be used to finance and promote clean energy initiatives. • Further, all new Ultra Mega Power Plants – Plants with more than 4 GW capacity – have to adopt High Efficiency Low Emission (HELE) technologies. The aim is to have 50% all Indian coal based fire plants adopt HELE technologies by 2030. • There is also a trend of thermal power companies also getting involved in the renewable energy field, such as the TATAs, NTPC and Adani Power about the typical weather patterns in your country throughout the calendar year.
  6. IMPACT ON ENERGY • India is the 4th largest emitter of GHG in the world after China, European Union and the United States. • The energy sector is by far the largest contributor of GHG emissions, accounting for about two-thirds of the total emissions. • There exists a delicate balance between mitigating the harmful emissions produced and providing access to energy. • If coal continues to be the dominant source of power, the emissions are bound to increase. • To maintain this delicate balance, India relies on 2 core pillars – Increasing energy efficiency on both demand and supply side, and promotion of low carbon energy sources such as solar and wind power • Currently, there are two major drivers of mitigation, one being the ma. rket forces which are increasingly incentivizing move towards energy efficiency like the Perform, Achieve and Trade (PAT) which aims to improve energy efficiency by 1-2% per year for very large energy intensive industries. • The second factor is the push to meet India’s NDCs, and the energy targets adopted. The Government of India has set a target of installing 175 GW of renewable energy capacity by the year 2022, with 100 GW from solar, 60 GW from wind, 10 GW from bio-power and 5 GW from small hydro-power, and overall 450 GW by 2030.
  7. IMPACT ON TOURISM According to World Travel and Tourism Council (WTTC), travel and tourism contributed 9.6% to India’s GDP in 2018 and ranked 7th in the world in terms of contribution to the GDP. In 2019, the travel and tourism industry in India contributed around USD 268 billion to the GDP and roughly 4.2 crore jobs were created in this sector, which accounts for 8.1% of the total employment in the country. Looking at the growth in this sector, the total contribution by travel and tourism sector to India’s GDP is expected to increase from INR 15.24 lakh crore (USD 234.03 billion) in 2017 to INR 32.05 lakh crore (USD 492.21 billion) in 2028. In 2019, India recorded over 10.89 million foreign tourist arrivals, indicating a 3.2% growth rate from 201854. To boost the growth in the Hotel and Tourism sector, cumulative FDI inflow of USD 15.28 billion were received between April 2000 and March 202052 and 100% Foreign Direct Investment (FDI) is allowed through the automatic route. In addition to this, a five-year tax holiday has been offered for 2, 3 and 4-star category hotels located around UNESCO World Heritage sites India, being a geographically diverse country, has multiple offering for tourists. However, the sector is highly susceptible to extreme weather events that are caused due to increasing climate change, with massive impact on infrastructure, requiring emergency preparedness measures, increasing maintenance costs, and disrupted commercial activity.
  8. CONT.. • The transportation of tourists exposes the industry to the challenge of finding mechanisms to reduce environmental impacts and carbon dioxide (CO2) emissions. • Reductions in seasons (spring and summer) causes losses for certain types of tourism, especially coastal (sea rise, bleaching and mortality of coral reefs) destinations. • On the other hand, loss to mountains (snow melting) is detrimental to the winter tourism sector. • Various tourist activities depend on meteorology and climatology and therefore unfavourable conditions can affect the tourist’s activities, operations, comforts, and flow of tourist to a large extent. • The impact worsens due to flight delays, cancellations and re-routing, affecting tourist movement. • In terms of radiative forcing, tourism contributes to 4.6% of global warming. The transport sector, including air, car and rail, generates the largest proportion, with 75% of all emissions. • Air travel is responsible for 40% of the total carbon emissions caused by this sector, and 54-75% of radiative forcing. The accommodation sector accounts for 20% of emissions through heating, air-conditioning and the maintenance of accommodation infrastructure. Museums, theme parks, events or shopping also contribute to roughly 3% of emissions
  9. IMPACT ON INSURANCE • Extreme weather events have become more frequent in recent years on account of climate change, which results in losses of billions of dollars. • For instance, the Kerala floods of 2018 led to about USD 5.6 billion worth of damage. • Unpredictable weather patterns, with short, intense monsoons have led to disruption in agriculture. According to global climate risk index 2020, India suffered an economic loss of USD 37 billion in 2018 due to climate change. • Such huge quantum of losses puts substantial pressure on the insurance sector. While climate change poses a risk for the sector, it also provides opportunity to reorient the flow of capital towards climate-resilient investments, thereby making insurance a potential tool to address climate change issues. • Innovative insurance products are being developed by World Bank and IFC in emerging markets. • In order to tackle the risks of climate change, it is important to use data analytics to better assess possible impacts of climate change on the firm, which, in turn, will help insurers to be better prepared.
  10. • Global warming has caused the Indian economy to be 31% smaller. • Since past, India has suffered severe socio-economic losses due to recurring floods and droughts during boreal summer and as per IPCC7, India, like other developing nations, is likely to suffer losses in all major sectors of the economy including energy, transport, agriculture, and tourism. There are around 700 million people residing in rural areas, dependent on climate sensitive economic sectors like agriculture and forests, fisheries for food and livelihoods. • According to World Bank, central districts of India are the most susceptible to climate change damage owing to lack of infrastructure and agrarian nature3. The report by World Bank states that 7 of the 10 severe hotspot districts are in the Vidarbha region of Maharashtra. The rest are in Chhattisgarh and Madhya Pradesh. • In these severe hotspots, the GDP loss could be as high as 9.8% against the national average of 2.8%. The report estimated the overall loss in national GDP in actual terms could be USD 1,178 billion by 2050 under the carbon- intensive scenario. In many sectors, high temperatures can make life wretched for workers and decrease their productivity. • According to the International Labor Organization, the loss in productivity by 2030 because of heat stress could be equivalent to India losing 34 million fulltime jobs (up from 15 million in 1995) - the highest among the world’s most populous nations (ILO 2019)23. According to TERI, desertification, land degradation and drought cost around 2.5% of GDP in 2014-15
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