The Economic Toll of Climate Change on India: Sectoral Emissions, GDP Loss, and Strategic Fiscal Innovation for A Low-Carbon Transition

Abstract

Climate change poses a significant threat to India’s economic stability, with rising temperatures, extreme weather events, and environmental degradation contributing to substantial GDP losses. This research paper quantifies the economic impact of climate change on India’s GDP, examining sector-specific vulnerabilities. It further explores how investments in renewable energy can serve as a critical mitigation strategy, not only reducing economic losses but also fostering industrial growth, job creation, and increased participation in global trade. By analyzing trade dynamics, the paper highlights how India’s transition to a green economy can enhance its export competitiveness, attract foreign investment, and strengthen its position in international climate agreements. Additionally, the study provides an overview of key policies and innovations—such as carbon pricing, green bonds, and sustainable infrastructure development—that can accelerate the shift toward a low-carbon economy. Through a combination of data-driven analysis and policy evaluation, this research offers insights into how India can balance economic growth with climate resilience, ensuring long-term sustainability and global competitiveness in an era of climate uncertainty.