Agriculture: Heat waves can lead to drought conditions and reduce crop yields. India’s agricultural sector heavily depends on monsoon rains and any deviation from normal weather patterns can affect crop production. This, in turn, affects farmers’ incomes, food prices and rural consumption.
Labour Productivity: High temperatures directly impacts productivity. Jobs that involve working outdoors for long, such as construction, agriculture and gig workers would be most affected. Workers may need more frequent breaks or reduced working hours, impacting overall output and economic productivity.
Electricity Demand: The demand for power has already skyrocketted due to higher usage of cooling appliances. This surge can strain the power grid, leading to potential blackouts or increased costs of electricity generation. Companies will need to account for the costs of increased fuel demand for cooling, improve energy efficiency and invest in renewable energy as part of their adaptation strategies. These measures will require significant capital expenditure.
Infrastructure: Existing urban infrastructure causes heat island effect that makes it impossible to stay indoors in extreme conditions. This can even damage infrastructure such as roads, railways, and buildings, leading to increased maintenance costs and disruptions in transportation and logistics networks. London faced the melting of runway tarmac at the airport due to excess heats causing substantial loss.
Water Resources: Water, water everywhere but not a drop to drink. This is set to become a reality. Unprecedented rainfall leads to flooding and the water gets wasted and diverted to sea. At other times, drought strikes leaving all areas parch dry. Water levels in India’s 150 major reservoirs have fallen to 35 per cent of live storage capacity. Data from the Central Water Commission indicates that as of May 24, 2024, the available water was 43.293 billion cubic meters, much lower than the same period last year. The situation is more severe in the south, where the 42 reservoirs are at 14 per cent of capacity.
Healthcare Costs: In the recent Haj pilgrimage to Mecca, several people lost their lives due to extreme heat and improper planning by the local government. Heat-related illnesses such as heatstroke, dehydration can exacerbate existing health conditions. This can lead to increased healthcare expenditures both for individuals and for the government, impacting overall healthcare budgets.
Insurance Costs: Increased frequency and severity of heat waves can lead to higher insurance claims related to crop losses, property damage and health emergencies, affecting insurance premiums and financial stability. The insurance industry needs to develop tailored, innovative climate-insurance products to mitigate financial risks associated with climate change.
Government Spending: Governments may need to allocate additional resources for relief measures, such as providing subsidies, implementing water conservation programmes and supporting affected communities. The impact of a heat wave is multifaceted, affecting various sectors and requiring proactive measures from both government and private entities to mitigate the adverse effects on livelihoods and economic stability.
