Looks like both the markets and thermometers are in the red.
As temperatures soar all over India causing heat waves, it feels like Bangalore exists in a parallel universe (recording the coldest day in May in years; whaaaattt).
Even though we can’t stop talking about wildfires sweeping across countries, there’s one essential thing we tend to ignore –
Heat waves aren’t just a climate threat; they are turning into an economic one too.
Now, heat waves aren’t uncommon in India, but the past decade has shown us what massive impact soaring temperatures can have on economic business as usual.
Developing countries have to pay a higher price for this – productivity loss in workers due to heat is going to cost nations a whopping $4.3 trillion in the next 7-8 years. In fact, the International Labour Organization report, 2019, stated that India lost around 4.3% of working hours due to heat stress in 1995.
In India, work hours lost to extreme heat is set to increase by about 15% by 2030. That puts the country’s GDP in jeopardy by at least 2.5% or $150 billion.
Hotter temperatures are expected to wreak havoc on the agricultural sector, which employs 940 million people and pushes workers, crops, and cattle beyond their physiological heat and drought tolerances. This will result in lost labour, lower agricultural yields, higher consumer prices, and negative effects on livelihoods.
According to a World Bank research there will be a 9% drop in living standards in certain parts of India by 2050. This will be caused by changes in weather patterns and the resulting repercussions on agriculture and other sectors.
Over 600 million Indians are projected to live in these areas, costing the country 2.8% of GDP and delaying efforts to lift substantial segments of the population out of poverty.
Construction and mine workers, farmers, and gig workers, like delivery personnel, are the ones most affected by high heat. Construction is expected to lose 3.5% of its total annual economic activity ($1.2 billion) to heat by 2050, while agriculture, which is also affected by decreased crop yields, will lose 3.7% ($130.7 million).
The heat waves have also ensured that power cuts become more frequent – small scale businesses that rely on their constant electricity supply are not at their most productive anymore, thanks to the once rare, but now frequent power cuts.
What adds to India’s heatwave woes is the ongoing Russian war on Ukraine – in terms of exports, India is trying to cover for the world’s wheat supplies as Russia takes a backseat. That puts added pressure on the agricultural sector that’s currently reeling from the heat. Secondly, importing coal and keeping up with power and energy requirements has become an expensive affair – which, again thanks to Russia’s war, is driving the coal prices through the roof.
Although some efforts have been made to minimise and adapt to significant weather-related shocks, an immediate mitigation and adaptation plan is required to combat further economic degradation.
There was no national heatwave response plan in place before 2015 to combat similar disasters. The first Heat Action Plan was established by the Ahmedabad Municipal Corporation (AMC) in 2013, following the horrific heatwave-related deaths in 2010.
In 2016, the National Disaster Mitigation Agency (NDMA) released comprehensive guidelines for developing major national plans to mitigate the effects of heatwaves.
So, the next time you order food or groceries, don’t forget to offer your delivery person a glass of water; you’ll be in your slightest and most indirect manner be helping the economy too. 🙂
Anugrah Shrivastava, Founder, smallcase, recently penned down an interesting tweet debunking the myths that surround smallcases. Check it out below –
Love makes you climb the highest mountains; what are a few tractor sales numbers? :’)
Climate change is truly en route to manifesting its most ugly face; in these urgent action-warranting situations, make sure your choices and investments both are environment friendly. Who knows, maybe going green could be our way of seeing the markets into the green as well.
Until next week, stay hydrated and invested!
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