Sorting grains at a market in New Mumbai, India. Poor Indian farming households will suffer in particular from climate change.
Photo: ©FAO/Atul Loke

Welfare drop by one third because of climate change

Climate change may reduce the welfare of Indian subsistence farmers dramatically whereas households above the poverty line may even benefit.

Global climate change threatens to decrease the welfare of poor Indian farming households in particular, and may cost them one third of their consumption by the end of this century, according to an analysis published in December 2019. The study, published in the journal Economics of Disasters and Climate Change, was led by the Berlin climate research institute MCC (Mercator Research Institute on Global Commons and Climate Change). 

Around 1.4 billion people currently live in India, the world's second most populous country. 270 million of them live below the poverty line – predominantly in rural areas strongly dependent on agriculture. 

Indian farmers living below the poverty line are adversely affected by a hotter spring and a drier summer, whereas a milder winter might have a positive effect on their consumption. Households above the poverty line are much less sensitive to these changes in temperature and precipitation, the study shows. They can cope better with the negative fallouts, for instance because they have access to bank loans, assets, or land ownership. 

The scientists based their research on the "business-as-usual scenario" presented in the latest Assessment Report by the Intergovernmental Panel on Climate Change (IPCC). This means, no further ambitious policies are adopted to mitigate global climate change, with the global mean temperature increasing by 3.7 degrees over the course of the 21st century. 

The local temperature and precipitation resulting from this scenario would reduce consumption of Indian subsistence farmers by one third by the end of the 21st century compared to a world without climate change, they say. On the contrary, households above the poverty line are likely to see their consumption increase by approximately 3 per cent. Importantly, these numbers only refer to the impact of climate change, independent of for example economic growth.  

(MCC/ile)

Reference:
Sedova, B., Kalkuhl, M., Mendelsohn, R., 2019, Distributional Impacts of Weather and Climate in Rural India, Economics of Disasters and Climate Change
dx.doi.org/10.1007/s41885-019-00051-1

Read more at MCC website: https://www.mcc-berlin.net/en/news/information/information-detail/article/climate-change-may-reduce-welfare-of-indian-subsistence-farmers-by-one-third.html