Climate Resilience as Competitiveness: India’s Risk, Reform, and Transition Pathways
1. National competitiveness is increasingly tied to resilience: the capacity to manage cascading climate risks, protect livelihoods, and sustain growth during simultaneous heatwaves, floods, cyclones, and droughts nationwide.
2. India’s recent experience with pandemic, global economic shocks, and converging climate threats shows crises can occur together or in quick succession, changing planning assumptions for policy and firms.
3. Competitiveness is no longer judged only by GDP or exports, because repeated climate disruption can erase gains, weaken long-term prosperity, and undermine national stability and services.
4. Resilience functions as a metric for inclusive prosperity by safeguarding livelihoods, maintaining essential services, and keeping growth stable during repeated climate shocks and recovery cycles.
5. Late twentieth century debates linked competitiveness with innovation, investment attraction, and export performance; India’s 1991 reforms emphasised liberalisation, efficiency, market dynamism, and services exports.
6. Standards of progress evolve; AI, digital platforms, and supply-chain shifts reshape competitiveness, while global markets increasingly value policy coherence, predictability, productive ecosystems, and institutional capacity.
7. Historical development brought gains with major costs: Panama Canal (1880–1914), Industrial Revolution pollution, and colonial extraction caused human suffering, deforestation, soil exhaustion, displacement, and cultural loss.
8. Man-made disasters illustrate catastrophic risk: Bhopal (1984) and Chernobyl (1986) produced long-lasting health and environmental impacts, underscoring the need for safeguards and oversight.
9. Mega infrastructure shows tradeoffs: Three Gorges displaced over one million and altered ecosystems; Aswan High Dam reduced silt deposition, affected fertility and fisheries, and relocated Nubian communities.
10. Policy frames development, security, and environmental preservation as interlinked priorities; Great Nicobar debate highlights ecological risks, disaster exposure, and tribal impacts alongside strategic and economic goals.
11. Heat stress already cuts average labour productivity by 5.7% in lower-middle-income countries; by 2030, India could lose 34 million job equivalents or about $450 billion output annually.
12. Highly exposed workers include construction, agriculture, and informal sectors, converting climate stress into macroeconomic competitiveness losses, especially where cooling, safety, and work redesign are limited.
13. Agriculture supports livelihoods for over 40% of India’s workforce; climate variability could reduce unirrigated farm incomes by up to 25%, widening rural vulnerability and regional disparities.
14. Recurrent shocks show persistence: Assam floods, Bundelkhand droughts, 2019 Chennai water crisis, and Cyclone Amphan 2020 causing $13 billion damages strain infrastructure and budgets.
15. 2010–2020 climate disasters cost India about $87 billion annually, near 3% of GDP; transition strategies link decarbonisation, circular economy, renewables scaling, and job creation to competitiveness.
Must Know Terms:
1.Resilience Metric
Resilience Metric: A hard, trackable score used to compare “risk-to-loss reduction” across countries/projects. Under the Sendai Framework, progress is monitored using 7 global targets (A–G) and 38 indicators (mortality, affected people, direct economic loss, damage to critical infrastructure/basic services, DRR strategies, international cooperation, early warning/risk information). The World Bank’s Resilience Rating System (RRS) rates projects from C to A+ on two dimensions and was piloted on 21 projects in FY21–FY22.
2.Heat Stress Productivity Loss
Heat Stress Productivity Loss: Measurable output loss when heat/humidity reduces safe working time or forces slower work, especially in agriculture and construction. ILO projects that by 2030, 2.2% of total global working hours will be lost due to heat stress—equivalent to about 80 million full-time jobs and about US$2.4 trillion in annual economic losses. For India, McKinsey estimates lost labor hours from heat/humidity could put ~2.5–4.5% of GDP at risk by 2030 (≈ US$150–250 billion).
3.Climate Disaster Fiscal Drain
Climate Disaster Fiscal Drain: Quantified pressure on public finances after disasters—relief + reconstruction outlays, revenue shortfalls, and higher debt/interest. IMF research finds public debt rises by about 2.5% of GDP in disaster years on average (lower growth + lower tax revenue + higher spending). India-specific IMF staff analysis reports fiscal costs from disasters ranging roughly 0.5% to 5.2% of state-level GDP, illustrating how repeated shocks can crowd out capex and social spending.
4.Great Nicobar Strategic Infrastructure
Great Nicobar Strategic Infrastructure: Official project scope for “Integrated Development” includes (i) International Container Transshipment Terminal (ICTT) at Galathea Bay with planned capacity 14.2 million TEU, (ii) Township & Area Development, and (iii) 450 MVA gas-and-solar power plant, over a stated project area of 16,610 hectares in Great Nicobar. The Environment Ministry clearance letter cites File No. 10/17/2021-IA.III and is dated 11.11.2022 (EC & CRZ clearance).
5.Carbon-Linked Trade Regimes
Carbon-Linked Trade Regimes: Trade systems where market access/cost is tied to embedded carbon emissions. EU CBAM is the flagship case: it entered “transitional application” on 1 Oct 2023 and runs to 31 Dec 2025; during this phase, importers mainly report embedded emissions, and the first reporting period ended 31 Jan 2024. Covered sectors include cement, iron & steel, aluminium, fertilisers, electricity, and hydrogen. The “definitive period” starts 1 Jan 2026, when financial compliance (CBAM certificates) applies.
6.Circular Economy Transition
Circular Economy Transition: Data-driven shift from “take–make–waste” to keeping materials in use (reuse/repair/refurbish/remanufacture/recycle) and reducing virgin extraction. The key global metric is circularity rate (share of secondary materials in total material use). Circularity Gap Report 2024 documents a decline from 9.1% (2018) to 7.2% (2023)—a 21% drop in five years, meaning the world is becoming less circular despite expanding circular-economy policy and investment.
MCQ
1. In these notes, “resilience” most directly means the capacity to:
(a) Maximise exports regardless of shocks
(b) Manage climate risks, protect livelihoods, and sustain growth during multiple hazards
(c) Replace all public services with private provision
(d) Reduce trade by isolating the economy
2. The notes argue competitiveness is no longer judged only by GDP because:
(a) GDP is now banned in policy analysis
(b) Climate disruption can erase gains and weaken long-term prosperity
(c) Exports have no role in growth
(d) Innovation no longer matters
3. India’s 1991 reforms are linked in the notes with:
(a) Import substitution and high tariffs
(b) Global integration, liberalisation, efficiency, and services export growth
(c) Abolition of private investment
(d) Elimination of market dynamism
4. Which factor is explicitly listed as reshaping competitiveness today?
(a) AI, digital platforms, and shifting supply chains
(b) Lunar mining and asteroid trade
(c) Declining global interdependence
(d) Permanent end of geopolitical turbulence
5. Panama Canal construction is cited as delivering benefits while also causing:
(a) No ecological impacts
(b) Human suffering and ecological damage
(c) Only fisheries gains
(d) Universal community consent
6. The Bhopal gas tragedy (1984) is used to illustrate:
(a) Benefits of weak regulation
(b) Catastrophic industrial risk from weak safeguards
(c) Absence of long-term impacts
(d) The inevitability of accidents without prevention
7. Three Gorges Dam is described as:
(a) Displacing over one million people and altering river ecosystems
(b) Creating zero ecological change
(c) Only improving downstream silt fertility
(d) Having no social tradeoffs
8. The “triad principle” in the notes states that development, security, and environment:
(a) Are unrelated policy domains
(b) Must be treated as interlinked, not zero-sum
(c) Should prioritise only security always
(d) Should prioritise only environment always
9. Average labour productivity losses from heat stress are stated as:
(a) 1.5%
(b) 3.2%
(c) 5.7%
(d) 12.4%
10. By 2030, heat stress could cost India approximately:
(a) 3 million job equivalents and $45 billion
(b) 10 million job equivalents and $100 billion
(c) 34 million job equivalents and nearly $450 billion
(d) 70 million job equivalents and $900 billion
11. Agriculture supports livelihoods for over:
(a) 10% of India’s workforce
(b) 25% of India’s workforce
(c) 40% of India’s workforce
(d) 70% of India’s workforce
12. Climate variability could reduce farm incomes in unirrigated areas by up to:
(a) 5%
(b) 10%
(c) 15%
(d) 25%
13. The 2019 Chennai event highlighted:
(a) Major urban water scarcity disrupting life and economic activity
(b) A cyclone landfall causing coastal damage
(c) A nuclear accident release
(d) A permanent ban on groundwater extraction
14. Cyclone Amphan (2020) damages are stated as:
(a) $1.3 billion
(b) $3 billion
(c) $13 billion
(d) $130 billion
15. India’s average annual losses from climate-related disasters during 2010–2020 are stated as:
(a) $8.7 billion
(b) $27 billion
(c) $87 billion
(d) $187 billion
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