India must act now to prevent a loss of nearly $35 trillion in economic potential over the next 50 years due to unmitigated climate change, a report from Deloitte Economics Institute said on August 23.
The report titled 'India’s turning point: How climate action can drive our economic future' also pointed out how India could gain $11 trillion in economic value instead over the same period, by limiting rising global temperatures and realising its potential to ‘export decarbonisation’ to the world.
“We have a narrow window of time—the next 10 years—to make the decisions needed to alter the trajectory of climate change. No one is immune to the impact of climate change, but for India, this is a window of opportunity to lead the way and show how climate action is not a narrative of cost but one of sustainable economic growth," said Atul Dhawan, Chairperson, Deloitte India.
"As India aspires to be a US$5 trillion economy, it is not just foreign and domestic investments that will be key in driving growth, we must also take this opportunity to align our ambitions with climate choices," Dhawan said.
With no action taken on climate change, the average global temperatures could rise by 3°C or more by the end of this century. This will make it harder for people to live and work, as sea levels rise, crop yields fall, infrastructure is damaged, and other challenges emerge, threatening the progress and prosperity that the nation has enjoyed in recent decades, the report said.
Over the next 50 years, the top five most impacted industries in terms of economic activity are expected to incur a significant share of climate-related loss, per the report.
These industries will be services (government and private), manufacturing, retail and tourism, construction, and transport which currently account for more than 80 per cent of India’s GDP. Together, they form the basis of the country’s contemporary economic engine, the report said.
Deloitte estimates that by 2070, these five industries alone would experience an annual loss in the value-added to GDP of more than $1.5 trillion per year.
Deloitte’s research also shows that if governments, businesses, and communities act boldly and rapidly in the next decade to address climate change, average global temperature rises can be limited to around 1.5°C by 2050 – a scenario that will minimise the impact of climate change for India and the rest of the world.
“We need to transform the world’s economies towards new, low-emission pathways and India is well-positioned to play a leading role in this process globally. By making the right choices now, India could chart a more prosperous path towards a low-emission future, accelerating progress in the rest of the world by exporting key technologies, processes, and know-how,” said Viral Thakker, Partner and Sustainability Leader, Deloitte India.
Accelerated decarbonisation could bring significant benefits to India and the world, it noted.
India could use the transition to a low-emission footing to restructure its economy towards growth in advanced industrial sectors, leveraging lower-cost clean energy export markets, as the region experiences a rapid increase in energy demand over the coming years, per the report.
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