India Set To Be Worst Hit As Climate Change Begins To Impact Asian Economies

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According to GIZ, India is the most vulnerable country to climate change, “not only because of its physical exposure to climate-related disasters, but also due to the economic dependency of a high percentage of its population on climate-sensitive sectors.” Heat stress is perhaps the most evident and direct effect of climate change.

Impacts on economy ranging from infrastructure damage to loss in agricultural productivity are easier to quantify. Yet, labour productivity may be one of the biggest costs to the Indian economy. A recent report by the ILO predicts that heat stress is projected to reduce total working hours worldwide by 2.2% and global GDP by US$2,400 billion in 2030. The impact on labour productivity is expected to the highest in Southern Asia, costing 5.3% of the GDP.

In particular, heat stress is most likely to affect those in indecent work – which have longer hours, greater informality and are physically-intensive such as agriculture and construction. To this end, heat stress may exacerbate pre-existing inequalities within the workforce.

Within Asia, India will be most affected by heat stress, losing 5.8% of working hours in 2030, across sectors. In aggregate terms, this will account to 34 million full-time jobs lost in 2030 as a result of heat stress. The agrarian sector is expected to be affected most.

In urban areas, the urban heat island effect is expected to cause higher temperatures, with workers in construction most likely to be affected. Those on the margins of society, are yet again, predicted to be hardest hit by climate change, with multiple deprivations, such as low access to water and poor health conditions, making those in poverty and rural areas most vulnerable to heat stress. So, what can be done?

Working hours lost to heat stress by subregion in 1995 and projections for 2030.

On the government level, this involves consulting pre-existing occupational health standards and regulations. For instance, the Factories Act 1948 and the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act 1996, which regulate the construction industry, are equally ambiguous on the impacts of heat stress on workers like brickmakers.

Moreover, a Reuters article highlights, workers are not aware of their rights, and with limited opportunities, many continue working in dangerous conditions. Precautionary and adaptive measures must be taken to equip workers who will be enduring heat stress conditions, such as adequate water access and scheduled breaks.

For instance, in the brickmaking profession, Bengal, Sett and Sahu (2014) found “an increase in temperature of 1°C causes approximately a 2% loss in productivity.” Surveyed workers took limited breaks, and whilst they were aware of their “physiological stress parameters, such as peak heart rate and cardiac strain,” they were ill-equipped to act on it. This calls for stronger climate change awareness amongst labour unions. Reform of pre-existing laws may be the most accessible for grassroots movements to demand change.

At the climate policy level, State Action Plans on Climate Change (SAPCC) allow for district, city and village specific adaptation plans which are appropriate to the dominant sectors. GIZ cite, that these might be more effective mechanisms, than national adaptation plans to engender policy change. Adaptation rarely occurs in silos, and the report encourages policymakers to “integrating climate change into district planning process, generating awareness and facilitate access to climate finance from national and international sources.”

One example of adaptation response to heat stress is Ahmedabad’s cool roofs initiative, incorporated in its 2017 Heat Action Plan. As the ILO notes, this provides “access to affordable cool roofs for the city’s slum residents and urban poor, those who are most vulnerable to the health effects of extreme heat. The initiative aims to turn the roofs of at least 500 slum dwellings into cool roofs, improve the reflectivity of roofs on government buildings and schools, and raise public awareness.”

Impact on labour productivity, beckons employers to play a more active role in implementing measures to manage heat stress. For example, in the case of brick-workers, at present, working premises have “limited or non-existent on-site cooling options.” More widely, as research surrounding firm-level adaptation in India indicates, most actions taken by firms are reactive. Action “is not systematically undertaken for future climate risks, especially of large magnitude.”

Firm incentivisation requires integrating labour productivity losses into revenue forecasts, especially in the longer term. Initiatives such as Carbon Disclosure Project, or Transition Pathway Initiative, may help nudge firms in this direction. Carbon and climate risk disclosure further incentivises early movers in adaptation, as private sector players may want to minimise their losses.

There has been growing appetite for this, with 52 Indian companies responding to CDP’s Climate Change questionnaire, in 2018. Some of the leading companies incorporating climate risk have been construction firms such as Ambuja Cement and Tata Steel, both receiving a level 4 (Strategic Assessment), the highest category, on the TPI. Given the impact of heat stress on workers in these sectors, it is important for behaviour change to occur imminently.

Overall, businesses need technological investments and behavioural change to cope with increasing heat stress. The ILO calls for skills development and awareness raising amongst workers in high risk sectors: agriculture and construction. In the longer term, as India undergoes a structural transformation away from agriculture, governments need to avoid adopting a myopic sectoral approach. Rapid urbanisation and heat stress faced in cities, needs to be ever present on the agenda.

Financing for climate adaptation also remains a key task. As the Grantham Research Institute on Climate Change note, “Private sector involvement is especially relevant considering that the five-year total budget requirement of State action plans on climate change altogether is £114 billion… even with support from the developed world, which India seeks in Paris, financing adaptation will require greater engagement and effort.”

In terms of adaptation, India is actively seeking global climate change adaptation finance sources, such as the Adaptation Fund, the Global Environment Facility (GEF) and the Green Climate Fund (GCF). Yet, these need to be an acceleration tool as opposed to a stepping-stone to adaption implementation.

The risk of heat stress to labour productivity is evident. Governments, employers and workers need to partner together to better prepare for increasingly hotter working conditions. The consequences are equally clear. Together, we still have the chance to retain productivity and adapt accordingly.

Featured image for representative purpose only.
Featured image source: Biswarup Ganguly/Wikimedia Commons.
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