The Burning Quarter

The Indian summer is here. While March allowed a peek into what’s in store, the worst would be in April and May. What does that mean for India’s economy? The Intersection takes a look.

Good morning! India recently witnessed the warmest February in over a 100 years. Then came the unseasonal rains and hailstones in March, which devastated crops all over the country. Such freak weather portends what is to come if the world doesn’t get its climate goals in order. A weather-weary India is stepping into peak summer even as water and power woes (and demands) escalate by the day. What effect will unbearable heat have on human labour, utilities, and the economy? Today’s story, with graphics by Abdul Shafiq, outlines the sobering truth. Plus: a curated list of this week’s best longreads.

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This is a weather report. It is quite dire.

India was hoping to start the fiscal year 2023-24 on a positive note with an uptick in industrial activity and a bountiful Rabi harvest. But the weather has other ideas.

Unseasonal rains have been destroying standing Rabi crops, including wheat and vegetables in Punjab, cumin and onions in Rajasthan, and mangoes and grapes in Maharashtra. La Nina patterns, which bring unpredictable downpours, are expected to give way to El Nino conditions that turn up the heat. We saw a trailer in March, when many parts of the country suddenly got warm. States such as Kerala and Karnataka, known for pleasant weather at this time of the year, reported temperatures of 40° Celsius. Forests in Goa and Tamil Nadu caught fire.

Although a twist in weather patterns have cooled northern India with rains, the Indian Meteorological Department (IMD) has forecast that several parts of the country will be swept by heatwaves in April and May. These include Gujarat, Odisha, Madhya Pradesh, Chhattisgarh, Bihar, northern Maharashtra, parts of Andhra and Telangana, and a part of Rajasthan, all regions that host important industrial corridors.

Graphics by Abdul Shafiq

Tamil Nadu, the third most industrialised state in the country, Uttar Pradesh and Haryana are not yet on IMD’s list, but they invariably have an annual tryst with heat waves. Wet bulb temperature (WBT) in Chennai is already pushing 27° Celsius. In fact, WBT readings all along the coast of the Bay of Bengal are already flashing red.

Now that is a killer—for workers and productivity. Wet bulb temperature (WBT) is heat measured by covering the bulb of a thermometer with wet cloth, imitating humid conditions. This reading will be lower than dry bulb temperature, because evaporation will cause the thermometer to cool.

This is important because human bodies cool down by sweating. At the critical threshold of 35° Celsius, that mechanism stops working and the body’s core temperature rises fatally. The United Nations' Intergovernmental Panel on Climate Change says India is one of the countries highly vulnerable to high WBT due to climate change.

The heat does not need to rise to those levels for economic activity to stall, however. Research by the Energy Policy Institute of the University of Chicago (EPIC) shows that in industries that employ a large number of workers, productivity starts dipping at about 27° Celsius. In places such as Delhi and Gujarat, productivity drops by as much as 4% for every degree rise in temperature, ‘The Impact of Temperature on Productivity and Labor Supply: Evidence from Indian Manufacturing’ (pdf) found.

Per the study, about 5% of workers do not turn up for work when there is a heatwave. The impact of rising summer heat is such that output falls by as much as 3% when annual average daily high temperatures rise by 1%.

Here is The Intersection’s ground report from 2022 on how heatwaves impact livelihoods and cities become death traps for outdoor workers.

Journal Lancet reported that 470 billion hours of work or 139 hours per person were lost in 2021. That was an increase of 37% from the annual average in 1990–99. Unsurprisingly, two thirds of all work hours lost globally that year were in farming, 87% of it in countries that score low on human development, the Lancet Countdown 2022 said.

The IMD said monthly mean temperatures for India in 2022 were above normal for ten months of the year, except in January and February. Temperatures were consistently 3°C-8°C above normal for more than six days during the month of March and April 2022, breaking many decadal and some all-time records in several parts of the country. By April 29, almost 70% of India was affected by the heatwave.

The immediate impact of hot summers is on water availability. Drought-like conditions in 2014 and 2015 across 11 of India’s 29 states likely cost the economy $1 trillion. India’s per capita surface water availability is projected to shrink to 1401 cubic metres by 2025. Industries are the first to face power and water cuts in summers as state governments are loath to deprive homes and farms of the utilities. Last year, Maharashtra slashed water supplies, while Rajasthan cut power to industries.

Graphics by Abdul Shafiq

One report estimated that India’s losses across sectors, including manufacturing and services, totted up to $159 billion or 5.4% of GDP in 2021. The heatwaves of April and May in 2022 brought down India’s wheat production by 3%, robbing it of the opportunity to export the cereal when international prices were high. (On a separate note, when we export food, we also ship huge quantities of water out of the country. India exported more than 10 trillion litres of embedded or virtual water through the export of ~37 lakh tonnes of Basmati rice in 2014-15.)

That spectre of low productivity and output losses is looming again this year. The EPIC survey had found that one of the sectors that remained unaffected by labour productivity loss was steelmaking. However, that was also because the sector has a high level of automation. Even those might be impacted by shortage of power. During April-May 2022, industries were crippled by a surge in electricity demand that far outstripped supply. It topped out at 207 gigawatts in 2022. but could rise to as high as 240 gigawatts this year.

Graphics by Abdul Shafiq

Here is an ominous assessment by the World Bank: By 2030, over 160-200 million people across the country could be exposed to lethal heatwaves annually. Around 34 million people in India will face job losses due to heat stress-related productivity decline. The current food loss due to heat during transportation is close to $13 billion annually.

Here is the positive spin, however. The bank estimates that as temperatures rise, the cooling business in India is a $1.6 trillion investment opportunity. By 2037, the demand for cooling is likely to be eight times more than current levels. This means there will be a demand for a new air-conditioner every 15 seconds. That will raise annual greenhouse gas emissions by 435% in 20 years. Mitigating that is a 2-million-jobs opportunity, it says.

Also, refrigerated transport can help reduce food loss by about 76%. Not easy, as The Intersection found last year.

With inputs from Soumya Gupta and Roshni P. Nair


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