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Climate change to depress living standards, erode GDP in India

New Delhi : Over 800 million people, or half the population in South Asia could see their living standards worsen by 2050 due to climate change. India is expected to be one of the worst hit, a recently released study by the World Bank has warned.

The study - South Asia’s Hotspots - focused on all six countries in South Asia and found that average temperatures in the region have increased in the last sixty years and will continue rising. Additionally, rainfall is becoming more erratic: some areas will experience more droughts, others more rain.

The rising temperatures and changing monsoon rainfall patterns from climate change could cost India as much as 2.8 per cent of GDP and depress the living standards of nearly half the country’s population by 2050.

According to the study, almost half of South Asia’s population, including India, now lives in the vulnerable areas and will suffer from declining living standards that could be attributed to falling agricultural yields, lower labor productivity or related health impacts. Some of these areas are already less developed, suffer from poor connectivity and are water stressed.

India’s average annual temperatures are expected to rise by 1.00°C to 2°C by 2050 even if preventive measures are taken along the lines of those recommended by the Paris climate change agreement of 2015. If no measures are taken average temperatures in India are predicted to increase by 1.5°C to 3°C.

The work identified vulnerable states and districts as “hotspots” using spatial granular climate and household data analysis. The report defined hotspot as a location where changes in average temperature and precipitation will have a negative effect on living standards.

These hotspots are not only necessarily higher temperature zones than the surrounding areas, but also reflect the local population’s socio-economic capacity to cope with the climatic changes.

The study has warned that by 2050, Chhattisgarh and Madhya Pradesh are predicted to be the top two climate hotspot states and are likely to experience a decline of more than nine per cent in their living standards, followed by Rajasthan, Uttar Pradesh, and Maharashtra. Seven out of the top 10 most-affected hotspot districts will belong to the Vidarbha region of Maharashtra.

“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 in the South Asia region of the World Bank.

“Identifying hotspots will help policymakers in finding specific locations and household types where the resources are needed the most to address the rising risk to living standards.”

The report provides options to prioritize investments and strategies to build local resilience to climate change. To offset the negative economic impact in India, for example, the analysis suggests enhancing educational attainment, reducing water stress, and improving job opportunities in the non-agricultural sectors.

The analysis predicts that a 30 per cent improvement on these measures could halt the decline in living standards by almost 1 per cent from -2.8 per cent to -1.9 per cent.

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