India may lose 3-10% GDP annually by 2100 due to climate change, says report

India may lose anywhere around 3-10 per cent of its GDP annually by 2100 and its poverty rate may rise by 3.5 per cent in 2040 due to climate change, according to a report released by the London-based global think tank Overseas Development Institute on Tuesday.

The report, titled ‘The Costs of Climate Change in India’, looks at economic costs of climate-related risks in the country and points to the possibility of increased inequality and poverty.

India is already experiencing the consequences of 1°C of global warming, it said. Extreme heatwaves, heavy rainfall, severe flooding, catastrophic storms and rising sea levels are damaging lives, livelihoods and assets across the country, says the report.

Observing that India has made rapid progress in boosting incomes and living standards over the last three decades, but without rapid global action, climate change may reverse development gains of recent decades, it states.

“Climate change is already slowing the pace of poverty reduction and increasing inequality in India. The districts that have warmed the fastest have seen gross domestic product grow on average 56 per cent less than those that have warmed the slowest. Without rapid global action to reduce greenhouse gas emissions, rising average temperatures may actually reverse the development gains of recent decades,” it states.

The report finds that even if the temperatures are contained to 2°C, India will lose 2.6 percent GDP annually, and in case the global temperatures were to increase to 3°C, this loss will magnify to 13.4 per cent annually.

Pointing out that pursuing low-carbon development could mitigate projected costs, and would also yield other economic advantages, Economist Rathin Roy, Managing Director (Research and Policy) at ODI, said, “Pursuing a cleaner, more resource-efficient path to development could stimulate a faster, fairer economic recovery for India and help secure India’s prosperity and competitiveness in the long term. Lower-carbon options are more efficient and less polluting, producing immediate benefits such as cleaner air, greater energy security and rapid job creation.”