CLIMATE

CHANGE
EFFECT
ON ECONOMY
BY – KOMAL JOSHI
Definition :
• Climate change is a long-term change in the average
weather pattern that have come to define Earth’s local,
regional and global climates.
• Often climate change refers specifically to the rise in
global temperature from the mid-20th century to
present.
Causes :
■ Increased use of fossil fuels
■ Deforestation
■ Increasingly intensive agriculture

■ Earth orbital changes

■ Ocean current
■ Solar variation
Effect of Climate Change on economy

■ Not only climate change is a serious threat to the planet and to people but
climate change is also threatening to the economy. It is one of the biggest
threat to economic stability.
■ India’s GDP is mostly contributed by the agriculture sector.
■ The RBI annual report stated that the country is witnessing more intense
droughts, downward shifts in average rainfall as well as a higher
frequency of cyclones. In 2019 alone, eight cyclones along with rainfall
led to “an increase in the extent of crop area damaged.“
■ All these climate changes are undermining farm income.
■ The agriculture sector contributed around 15% to India's
economic growth in the financial year ending March 2020 and
accounts for 12.6% ($154 billion) of the overall credit of
banks.

■ It means a shake to agriculture can have a direct impact on the

health of India's financial system. Farmers are likely to default
on loans taken for agricultural equipment and inputs such as
tractors, motor pumps, seeds, and fertilizers. Additionally, crop
losses would lead to political pressure on banks to write off
loans or offer loans at unsustainable interest rates .
■ And according to Saudamini Das, a professor at the Institute of
Economic Growth, around 3% of the GDP will be spent on
countering climate changes adverse impacts.
■ So, the issue of climate change needs to be taken seriously.
■ Also World Bank has warned that if we don’t do something
immediately then climate change could push 100 million
people into poverty.
Solution :
■ Renewal energy
■ Sustainable transport
■ Waste management and recycling
■ Circular economy ( use of 3R )