Be wary as climate change can put economy and human survival at risk

It should be the coordinated and collective efforts of all stakeholders both Central and State Governments, corporates, regulators, financial institutions and every citizen to involve, engage and take effective steps and climate change mitigating efforts for achieving ‘Green Economy’

Concerns are being expressed throughout the world about the substantial risks to the economy, financial sector’s stability and loss of life due to climate change. These come in the wake of an unprecedented rise of extreme weather catastrophes like heat wave, wildfires, hurricanes, earthquakes, abnormal rainfall, cloud bursting and unseasonal rainfall. Each has caused substantial destructions, including taking a heavy toll of lives and economic losses. These have adversely impacted health, food security, water availability and an alarming dearth of clean water.

Recent instances like the massive earthquake at Turkey not killed many people but also caused damages estimated at $ 34 billion, roughly four per cent of the annual output.

In India, recently we witnessed the issues of subsidence-hit Joshimath town in Chamoli district in Uttarakhand. Extreme heat waves, which will not only have a bearing on the day to day life of people but also affect the availability of water, reduce food production or cause damage to standing crops. It is reported that for every one degree increase in temperature, the yield of wheat, soybean, mustard, groundnut, potato and such other food products are expected to decline by up to seven per cent. There is also the threat of E1 Nino, observed every 3-5 years, which will affect normal monsoon that is paramount for the success of our agriculture.

We are all aware of the importance and significance of ‘nature’ in our life. In fact, our very existence depends on nature’s bountiful benefits like our forests, rivers, oceans and earth. However, humans, for their selfish benefits, have exploited all natural resources, forests and excessive land use.

In the words of Karen Ellis, Chief Advisor, Economics and Development WWF-UK, “If we start to understand the value of nature to our society and economy, we will recognise the importance of living in harmony with nature rather than destroying it for short-term gains. So many governments and businesses around the world are now realising this, and starting to act- it gives me real hope for the future”.

As per the latest The Living Planet Report 2022 there has been an average decline of 69% in species population since 1970.

According to the report “the evidence is unequivocal- we are living through the dual crises of biodiversity loss and climate change driven by unsustainable use of our planet’s resources “

United Nations’ Intergovernmental Panel on Climate Change “has warned that humanity is not doing enough to limit the effects of climate change. IPCC noted the nearly half of the world population was already vulnerable to increasingly dangerous climate impacts”.

According to the UN report, “Land degradation now affects half of the world’s population and its economy. Damage to soils and water, has dire consequences for humanity. The economic returns of restoring land and reducing degradation, greenhouse gas emissions and biodiversity loss could be as high as $140 trillion every year-up to 50%more than $93 trillion global GDP in 2022.”

Every April 22 is celebrated as World Earth Day to promote awareness and to show our commitment to save the planet.

This year its theme was ‘Invest in our Planet’, which emphasised the need to take immediate action to protect our planet by addressing problems related to climate change and environmental challenges. Let us all rise up and come together to do out bit to save nature and the environment by reducing emissions, food wastage and pollution, reclaiming degraded land, responsible use of water, protecting and preserving forests, planting trees, respecting the freedom to live of birds, animals, insects, and other wildlife animals. There is also a necessity to consume less meat and avoid excessive killing of animals.

All of us are aware of the dangers coming from climate change like global temperatures have risen abnormally in recent years.

According to the World Economic Forum (WEF) global carbon dioxide emissions have risen to record highs last year. Such CO2 emissions are causing the greenhouse effect, trapping heat and making the earth 1.11 degrees warmer. This will lead to lot of health issues.

According to World Health Organisation (WHO) “climate change is the biggest health threat facing humanity as will take 2.50 lakh lives every year between 2030 and 2050 through heat stress, malaria and malnourishment.

Prime Minister Narendra Modi has given a call for Mission 2070 - A Green New Deal for Net-zero India. Accordingly, India has submitted its first NDC in 2016 that included a number of qualitative and quantitative elements like a target of 49% installed electricity generation capacity from non-fossil based energy resources by 2030, a target to use 5% biodiesel in railways, a commitment to reduce economy-wise emissions intensity with respect to GDP by 33-35% below 2005 levels by 2030, a carbon removal target of creating an additional carbon sink of 2.5-3 billion metric tons of CO2 equivalent through additional forest and tree cover by 2030, an intent to continue economic development while decarbonising and increasing adaptation actions.

According to the Mission, the country’s transition to net-zero economy would create over 50 million jobs and contribute more than $one trillion in economic impact by 2030 and around $15 trillion by 2070. It should be the coordinated and collective efforts of all stakeholders both Central and State Governments, corporates, regulators, financial institutions and every citizen to involve, engage and take effective steps and climate change mitigating efforts for achieving ‘Green Economy’. A lot of action has already been taken in terms of alternative energy like solar, wind, hydropower, electricity vehicles, corporates adopting ESG and initiating actions to reduce carbon emissions, disclosure by Business Responsible and Sustainable Reporting and establishing a National Hydrogen Mission.

The RBI had last July issued a discussion paper on climate change. After receiving feedback, the bank stated in February it would issue three guidelines providing framework for how Indian banks may accept deposits invested in Green activities, another framework for disclosing climate-related financial risks and guidance related to climate scenario analysis and stress testing. RBI has since issued guidelines for Green deposits.

Climate change and environmental setbacks put at risk several factors, including economic risk, financial and human survival, which can have both short-term and long-term negative impacts. Developed and developing countries have to work together to reduce the heat levels by limiting warming to 1.5 degrees by the end of the century. This is a bold step towards mitigating climate change.

Commemorating the World Environment Day, India has given a new slogan of “Vasudhaiva Kutumbaka” or “ One Earth, One Family , One Future “.

Essentially, the theme affirms the value of all life-human, animal, plant and microorganisms - and their interconnectedness on the universe. The theme also spotlights LiFE ( Lifestyle for Environment) , with its associated, environmentally sustainable and responsible choices, both at the level of individual lifestyles as well as national development, leading to globally transformative actions resulting in a cleaner, greener and bluer future.

This is an opportunity for all of us towards saving earth, environment and the planet to ensure a secure future of the future generations.

(The author is former Chairman & Managing Director of Indian Overseas Bank)