How Climate Change Is Economically Shaking Indian Cities

Economists stressed that extreme weather events induced climate change which severely disrupt urban infrastructure, agriculture, and workforce, writes Surabhi Gupta.

New Delhi:As Delhi grappled with severe air pollution with AQI reaching 288 on Friday, December 13, a larger concern which has a bearing on sustenance surfaced. Indian cities are becoming increasingly vulnerable due to the economic impacts induced by climate change.

On Thursday, December 12, the AQI, which ranges from 0 to 500, was 270 at 11 am, rising to 273 by 12 pm, 286 by 3 pm, and 296 by 8 pm. On Thursday, the average AQI was 288, indicating 'bad', compared to 'moderate' 199 the previous day.

From heatwaves and rising sea levels to storms and urban flooding, these environmental challenges are not just threatening lives but also straining the economic backbone of urban India.

With urbanisation accelerating at an unprecedented rate, the risks posed by climate change require immediate attention. The economic fallout is no longer a distant possibility but an unfolding reality that demands sustainable growth strategies, stronger infrastructure, and better urban planning.

The Growing Economic Toll on Cities

Indian cities, particularly metros such as Delhi, Mumbai, and Kolkata, are already feeling the heat. Extreme weather events like heatwaves, cold waves, and storms not only disrupt daily life but also impact critical sectors such as agriculture, transportation, logistics, and construction.

Economist Sharad Kohli elaborated on the issue, saying, "If we talk about the climatic impact on metro cities, take Delhi, for example. Extreme heatwaves, touching 50°C in summers, and cold waves in winter disrupt normal life and logistics. The smog in October and November halts economic activity by delaying the movement of goods and vehicles. Similarly, Mumbai, being a coastal city, faces frequent flooding and heavy rains, which disrupt traffic, damage infrastructure, and affect freshwater supplies due to saltwater intrusion. These recurring disruptions impact workforce productivity, supply chains, and overall economic efficiency.”

The situation is no better for Kolkata, where extreme storms and cyclones are becoming common. Surrounding agricultural areas, vital to the city’s economy, face severe losses due to erratic weather patterns. Kohli noted that such events amplify economic losses in terms of labour productivity, property damage, and agriculture yields, affecting the overall economic health of urban India.

Rising Costs of Climate Change

Indian cities are urbanising at an extraordinary rate, with the urban population expected to reach 871 million by 2050, according to the United Nations. However, this rapid growth exposes them to more severe climate-related risks. Poor urban planning exacerbates the situation, leaving cities ill-equipped to handle heat island effects, flooding, or rising sea levels.

For instance, Mumbai, Kolkata, and Chennai are directly threatened by rising sea levels. When Cyclone Amphan hit the Sundarbans in 2020, it caused widespread damage in Kolkata and surrounding areas. The storm surge reached 14.8 feet, devastating crops, homes, and infrastructure. Economically, such events deplete resources, halt trade, and divert funds meant for development into emergency relief.

Impact on Public Health and Infrastructure

Extreme weather impacts urban health, infrastructure, and productivity. The combination of high temperatures and humidity, measured as the Wet Bulb Globe Temperature (WBGT), has already reached dangerous levels in Delhi, Kolkata, and Mumbai. Prolonged exposure to such conditions strains human resilience and reduces workforce efficiency. This, in turn, affects economic productivity, particularly in labour-intensive sectors like construction and agriculture.

Professor Seema Sharma, an economist from IIT Delhi, emphasised, “Cities like Mumbai and Kolkata face severe risks from rising sea levels and storms, which could cripple basic infrastructure. Floods and cyclones disrupt public transport, water supplies, and power systems, leading to public crises and massive economic losses. It is crucial to prioritise green technologies and transition to sustainable practices to mitigate these impacts.”

She added saying while short-term measures like carbon trading can help, long-term solutions require global cooperation and policy shifts. "Public-private partnerships, coupled with incentives for businesses, could pave the way for a sustainable transition. The corporate sector must also recognise that their survival depends on addressing these challenges,” she added.

Sectoral Impacts: Agriculture, Logistics, and Beyond

Climate change has far-reaching implications for various economic sectors.

1. Agriculture: Surrounding urban areas often depend on agriculture for food supply and livelihood. Erratic rainfall, floods, and heatwaves destroy crops, pushing food prices higher and affecting urban populations.

2. Logistics and Trade: Disruptions in transportation due to extreme weather increase costs and delay goods delivery. For example, during heavy rains in Mumbai, waterlogged roads paralyze the movement of essential supplies.

3. Urban Planning and Real Estate: Rising sea levels and extreme storms lead to property damage and increased insurance premiums. This discourages investments in coastal and flood-prone areas, impacting urban development.

Solutions for Building Climate-Resilient Cities

Building resilience in Indian cities requires a multi-pronged approach

1. Sustainable Urban Planning: Reducing the heat island effect through better city design, green spaces, and efficient water management systems.

2. Green Energy Transition: Investing in renewable energy and incentivizing businesses to adopt cleaner technologies.

3. Public-Private Partnerships: Combining resources from the government and private sector to fund large-scale climate adaptation projects.

4. Community Awareness: Educating citizens on sustainable consumption and waste management practices.

As Sharma pointed out, “Awareness among consumers and corporate responsibility are essential. Green finance and global carbon trading markets can provide some relief, but only if supported by strong domestic policies.”

Need for Immediate Action

With 2024 on track to be the hottest year on record, the impacts of climate change are only intensifying. Heatwaves are lasting longer, storms are becoming stronger, and sea levels are rising at an alarming rate. The Indian Ocean, which has warmed significantly over the past decades, is a hotspot for severe cyclones, making cities like Chennai, Mumbai, and Kolkata particularly vulnerable.

According to the World Meteorological Organization, the global rise in sea levels has accelerated in the past 30 years. In India, the rate of rise is even higher in certain coastal areas. This trend, combined with the destruction of natural barriers like mangroves, leaves cities defenceless against storm surges and flooding.

A Collective Responsibility

India’s battle with climate change is as much about economic resilience as it is about environmental sustainability. As Sharma remarked, “We are the ones who created this problem, and it is our responsibility to solve it. Prioritising green policies, incentivising sustainable practices, and fostering global cooperation are non-negotiable steps toward a safer future.”

Kohli added that ignoring these challenges will lead to compounded economic losses, from agriculture to logistics and manufacturing. "Climate resilience must be integrated into every aspect of urban governance,” he added.

The road ahead is fraught with challenges, but as cities bear the brunt of climate change, the urgency to act cannot be overstated. For a country on the brink of becoming an economic superpower, addressing these vulnerabilities is not just a moral imperative, it is a necessity for sustained growth and prosperity.