Storms caused $17 billion loss to fixed assets and sales in India in 2021: ADB

Chennai: Intense storms in India have caused damage to fixed assets and reduction in sales valued at $17 billion in 2021, finds Asian Development Bank. By 2070, climate change under a high-end emissions scenario could cause a loss of around 24.7 per cent of India’s GDP, it warns.

The ADB study finds that intense storms in India are currently leading to a 5.5 per cent reduction in fixed assets, while average storms reduce fixed assets by 2.2 per cent. Intense storms decrease sales by 7.8 per cent, and average storms lead to a 3.1 per cent drop in sales.

Intense storms in India have caused significant damage, affecting 0.2 per cent of the total fixed capital or around $2.8 billion and 0.3 per cent of total sales or around $14.5 billion in 2021.

Superstorms increase the likelihood of no formal education by 4.6 percentage points and reduce higher educational attainment by up to 20 percentage points, indicating long-term de-skilling of affected areas. The reduction in lifetime aggregate earnings, attributed to diminished educational attainment due to a yearly average storm exposure, is estimated at approximately $15.1 billion in 2021.

According to the report, India will witness 24.7 per cent loss of GDP due to climate change by 2070. The total loss across the Asia and Pacific region will be 16.9 per cent of GDP. These losses are concentrated in Bangladesh with 30.5 per cent, Viet Nam 30.2 per cent, Indonesia 26.8 per cent and India 24.7 per cent. Losses between 2050 and 2070 will be more than those between 2030 and 2050.

For many countries, effects on labour productivity from heat waves are large. The GDP loss in 2070 from reduced labour productivity is found to be 11.6 per cent of the GDP in India and 4.9 per cent for the region.

Increased energy demand becomes a substantial economic cost as economies struggle to cope with heat waves. Higher temperatures increase demand for cooling sufficiently to lead to a 3.3 per cent GDP reduction for the Asia and Pacific region by 2070. Losses are concentrated in climates with hotter seasonal temperatures and where energy usage for cooling is highest. These include India with 5.1 per cent and China 3.7 per cent.

Increased river-based flooding causes large economic impacts in selected countries and subregions. Due to increased river-based flooding the GDP loss in 2070 for Asia and the Pacific is 2.2 per cent and 4 per cent for India.