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Summary
India's dream of becoming a developed country by 2047 faces a climate threat. Wet-bulb heat is rising and could stall worker productivity. Here’s a rescue package the government, IMF, World Bank and other institutions should consider.
Viksit Bharat is not a distant ambition; it is an active economic sprint being run on a worsening track. As record-breaking heat domes breach 48° Celsius, the Indian economy is at risk. Productivity could evaporate as people labour under a ‘metabolism tax,’ a levy that no administration can cut but weighs GDP growth down.
That the biological effect of heat and humidity can throttle growth is slowly becoming apparent. Just as an engine slows if its cooling system fails and it begins to overheat, a vast proportion of the Indian workforce is experiencing exhaustion.
The human body’s biological cooling system of evaporative perspiration breaks down if humidity and heat are both high—and if ‘wet-bulb’ temperature rises above the ‘survival ceiling’ of 35° Celsius, it could prove fatal. Climate change has gradually been raising humidity and heat both, exposing Indian workers without air-conditioning to a thermal shock.
For the country’s 490 million informal workers, a tax that never appears on a ledger is threatening to crush their productive capacity. If India cannot protect this human capital, its ‘demographic dividend’ risks becoming a liability. By one estimate, the country loses 160 billion labour hours annually to extreme heat. This is a crisis.
Think of the metabolic Gini: The global development consensus has long treated the Gini coefficient—a measure of income inequality—as the north star of progress. This is an accounting relic. In an era of extreme heat, the new measure of inequality is the ‘metabolic Gini,’ the chasm between an elite that has the air under control and the working class, who suffer worsening conditions.
The metabolic tax is bearing down heavily on the heat-stressed informal sector; its workers are ageing faster, suffering chronic kidney distress and losing cognitive performance—even as they try hard to work.
Re-clock the tropics: The nine-to-five workday is a legacy of British rule and was designed for the UK’s temperate latitudes. In our 48° Celsius tropical reality, this model is oppressive. To help mitigate the productivity problem, India must adjust its work hours.
In summer months, the best hours for the sectors of heavy manufacturing, construction and outdoor logistics may be from 10pm to 8am. At 2am, ambient temperatures are often 15° Celsius lower and humidity is less. As India overcomes its electricity deficits, lighting up work zones is no longer as difficult as it once was.
Focus on resilience: Before the problem worsens, governments and multilateral development banks (MDBs) must start focusing on human resilience. This could be achieved through a few steps. MDBs could, for example, adjust the cost of lending to states up or down on the basis of resilience metrics. This can act as an incentive system to take action in favour of the vulnerable. A municipal government that implements an ‘Albedo-District’ programme, under which reflective films on windows and other materials are used as a way to lower ambient temperatures, should see an improved credit rating. This would reduce the population’s metabolic tax and aid productivity.
On their part, governments should treat investments in heat resilience with the same tax-favouritism reserved for heavy machinery. A company that invests in bio-resilient housing for its factory workers—using passive cooling and optimized ventilation—should receive an appropriate tax break.
Another programme could move from a relief system based on claims and institute a framework for sensor-triggered payments. It could work like an automated insurance policy that makes payouts to identified beneficiaries on the basis of climate events that have indisputably occurred. So, if regional sensors spot a breach of a 34° Celsius wet-bulb threshold (just below the danger mark, i.e.) for an extended period of, say, 48 hours, it could trigger an automatic non-conditional transfer directly into the digital wallets of vulnerable workers.
For those who live off daily wages, this welfare device could prevent people from facing a choice between starvation and heat-stroke. A well-designed welfare system to secure outdoor workers from heat could also help families put together enough money to access healthcare and acquire cooling systems.
We need a major shift in focus: The human body must not be viewed as a ‘unit of labour’ that can be squeezed for work until it hits the fatality limit. Nobody would disagree with this proposition. However, awareness seems to remain low of how climate change is pushing up heat and humidity levels.
Institutions could change that by treating it like the crisis it actually is. When the World Bank or International Monetary Fund negotiates a loan deal with an emerging country, the headline conversation should not just be about ‘fiscal consolidation,’ but equally about climate resilience.
If the majority of a country’s population suffers a 15% drop in cognitive capacity due to heat stress, such a nation would be unable to maximize its economic potential and repay its loans. Linking an economy’s prospects with the ability of its workforce to withstand global warming would force a shift in priorities and serve the country’s long-run interests.
The author is senior fellow, Pune International Centre, and former lead economist, World Bank.
English (US) ·