Here’s how the heat wave can lead to economic collapse


Extreme heat can directly harm economic growth; productivity declines, crop yields drop, energy consumption increases, and education and incomes suffer

Representative photo: iStock

Heatwave conditions have gripped several parts of India, with Delhi recently experiencing a record high of 49.2 degrees Celsius.

According to the latest advisory from the Indian Meteorological Department (IMD), heatwave conditions are most likely to continue in several states until May 22.

Watch: India’s heatwave could impact global food security

Rising temperatures not only impact people’s health, but have cascading effects on agriculture, education, energy and the economy as a whole.

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The World Meteorological Organization (WMO) said that “the heat wave in India was hitting several million people and the economy with temperatures exceeding 45 degrees Celsius”.

Four-Way Attack

Derek Lemoine, associate professor of economics at the University of Arizona, listed four ways heat waves impact a country’s economy. “As temperatures rise, economies will continue to suffer,” he said.

Citing research, he wrote in The conversation that extreme heat can directly hurt economic growth, and that higher summer temperatures reduce growth in many industries that tend to involve indoor work, including retail, services and finance. Workers are less productive in warmer weather.

Due to high temperatures, crop yields drop, energy consumption increases due to the operation of air conditioners, and education and income suffer, he wrote.

Crops suffer damage, yield drops

Like low temperatures, high temperatures can significantly harm crops. In India, rising temperatures have already affected wheat production, reaching such a point that the Center was forced to impose an export ban. For a large part of the population, wheat is a staple food, so a drop in its production has an immediate effect on inflation.

Read also : How heat waves affect wheat crops in India

According to a research paper titled “Effect of Terminal Heat Stress on Wheat and its Management with Chemicals in North West India” by Ramandeep Kaur, Simerjeet Kaur and Sandeep Singh Sandhu of Punjab Agricultural University , Ludhiana, heat stress affects 7.0 million hectares of wheat in developing countries.

“Wheat can be grown in a wide range of climatic conditions, but many biotic and abiotic factors limit its yield. Among the abiotic factors, high heat stress, a component of the physical environment, is one of the most important factors limiting agricultural production worldwide. Ambient temperatures have increased since the turn of the century and are expected to continue to rise as a result of climate change. Such an increase in temperature can cause heat stress, especially when it occurs during the reproductive and grain-filling phases,” the authors said.

In addition to worsening the spiral of inflation, the fall in wheat production is undermining India’s ambitions to expand its exports. The nation had sought to exploit the opportunity created by the war with Russia, which impacted wheat exports from market leader Ukraine. Those plans will have to wait now.

Labor Force Effects

“Heatwaves have multiple and cascading impacts not only on human health, but also on ecosystems, agriculture, water and energy supplies and key sectors of the economy,” said the Secretary General of WMO, Professor Petteri Taalas.

Heat stress affects outdoor workers such as those working in agriculture and on construction sites. This is a serious problem for many of the billion agricultural workers and 66 million textile workers (many of whom must work in factories and workshops without air conditioning) and for workers employed in emergency repair work, transport, tourism and sport, according to the report of the International Labor Organization (ILO) entitled “Working on a warmer planet – The impact of heat stress on labor productivity and decent work”.

By 2030, the equivalent of more than 2% of the world’s total working hours are expected to be lost each year, either because it is too hot to work or because workers have to work at a slower pace. In South Asia and West Africa, the resulting productivity loss could even be as high as 5%, the report says.

“Heat stress, an obstacle to economic activity”

The ILO further noted that heat stress is increasingly becoming an “impediment” to economic activity. As workers struggle to cope with the heat, companies are forced to reduce work during the hottest hours. “Adapting to these new and threatening conditions is expensive,” the ILO said. “Even if it proves possible to limit global warming by the end of the century to 1.5°C above pre-industrial levels, the accumulated financial losses due to heat stress are expected to reach $2.4 trillion. ‘by 2030.”

By 2030, the impact of heat stress on labor productivity is expected to be even more pronounced. In particular, up to 5.3% of total working hours (equivalent to 43 million full-time jobs) are expected to be lost, with two-thirds of South Asian countries facing losses of at least 2%. However, there are considerable variations within the sub-region, he added.

According to the ILO report, the country most affected by heat stress is India, which lost 4.3% of working hours in 1995 and is expected to lose 5.8% of working hours in 2030.

Source: International Labor Organization report.

“Furthermore, due to its large population, India is projected in absolute terms to lose the equivalent of 34 million full-time jobs in 2030 due to heat stress. Although most of the impact in India is felt in the agricultural sector, more and more working hours are expected to be lost in the construction sector, where heat stress affects both men and women. women,” he said.

Reduction in revenue

Changes in average weather patterns are expected to reduce living standards in India and by 2050, under the high carbon scenario, declines are projected at 2.8%. Translated into GDP per capita, changes in average weather patterns are expected to reduce incomes in severe hotspots by 9.8% in India by 2050, according to a World Bank report titled “South Asia Hotspots – The impact of changes in temperature and precipitation on the standard of living”.

Source: International Labor Organization report.

The power struggle

The heat waves have exacerbated India’s energy crisis, created by a shortage of coal and excess demand from industry. A Reuters report said electricity demand hit a record high in April as northern states reeled from the hottest pre-summer months in decades. An increase in the use of air conditioning has triggered the worst electricity crisis in more than six years.

Read also : Three Main Reasons for India’s Acute Coal Crisis

The rest of the summer should see this situation continue, or even worsen. As things stand, Indian states have increased their coal imports to weather the electricity crisis, which has put a strain on the foreign exchange situation. The sweltering heat adds considerably to the difficulty.

Indian government report

According to the report “Assessment of climate change in the Indian region” of the Ministry of Earth Sciences (MoES), the average temperature of India increased by about 0.7°C between 1901 and 2018. This increase was in largely due to greenhouse gas (GHG)-induced warming, partially offset by forcing due to anthropogenic aerosols and land use and cover change (LULC).

“In the absence of rapid, informed and far-reaching mitigation and adaptation measures, the impacts of climate change are likely to pose profound challenges to sustaining the country’s rapid economic growth and achieving the Sustainable Development Goals ( SDGs) adopted by the UN member USA in 2015,” the report states.

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