A heatwave is defined as a period with abnormally high temperatures, relative to the average temperatures for that season. With India reporting its warmest February this year since 1877 and with "average maximum temperatures touching 29.54 degrees Celsius" according to the Economic Times, concerns around an economic slowdown, due to the ongoing heatwave, for the current financial year, have begun to loom again.
The example of European and North American countries who suffer from cold climates, but are prosperous, vis-à-vis countries like Vietnam or Indonesia that suffer from toasty temperatures and relatively poor economic performance establishes a negative correlation between average temperatures and economic performance. To supplement this, a study done by North-western University identifies that there is not just a correlation but also a "substantial, contemporary causal effect of temperature on the development process.” Primarily, extreme heat results in lower levels of productivity that cause the aggregate output to decrease without any corresponding decrease in demand. As a result, inflation prevails and the average standard of living in the economy falls. From a health perspective, heat strokes, heat excursion and shorter life spans become common, all of which go against the principles of economic development.
In India, around 16% of the nation's working population depends on construction for its livelihood while nearly 40% depends upon agriculture for the same. Additionally, PLFS data shows that around 10% of workers in the trade, hotel, transport, storage and communication sector too work outdoors. In such a context, a situation like a heatwave in India is extremely worrisome on an individual as well as national level. In a study on Indian workers, published in 2018, researchers discovered that the productivity of workers engaged in the garment manufacturing industry dropped by 4% when temperatures increased above 27° Celsius. The decrease in productivity has been even higher in the case of works with greater sun exposure and manual labour like construction. Furthermore, high temperatures have reduced not just productivity levels per person but also increased absenteeism. The garment manufacturing study showed that a one-degree increase in the ten-day temperature average increased the probability that a worker would be absent by as much as 5 per cent.
Moreover, heatwaves have had a similar negative impact on the tourism sector of India. In comparative terms, whenever North India is marked by a heatwave from mid-June to mid-august, tourism shifts linearly from the plains to the hill stations. However, data from the past few years reveals that the heatwaves in North India have been so intense that even hill stations are experiencing an increase in temperatures, leading to an absolute decrease in Tourism across the country.
The concerning trend of economic output decline in hotter years, not only in Asia but across countries, underscores the far-reaching consequences of rising temperatures. Disturbingly, experts have forecasted a potential average global income reduction of 23% by 2100 due to continued warming. This should serve as a resounding wake-up call for all nations to intensify their efforts in addressing climate change. The urgency to implement comprehensive measures to mitigate and adapt to these challenges is paramount, as it is crucial to safeguard global economic stability and ensure a sustainable future for generations to come.
Gaurika Bhanot
Ug 25
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