Impact of climate change on economic growth: a case study of India

This study examines climate change impact on economic growth in the Indian context. Using state and district level data on climate variables and growth rate of per capita real GDP, the present study evaluates the short- as well as medium-run effects of climate change on growth. The results based on state-level analysis are suggestive of negative effects of rising temperature on growth during 1980-2019. These aggregate level results are further reinforced by the results from district-level analysis. First, higher temperatures have significant negative impact for poorer districts with a 1°C rise in temperature leading to nearly 4.7 percent fall in growth rate of district per capita income. Second, higher temperatures not only have level effects, but also growth effects, especially for richer districts. Credit access, electrification and urbanization and increased roads and market network may play a significant role in mitigating the negative impact of climate change.