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New research by Maplecroft discusses the economic cost of climate change and puts the focus on building flood defences and other infrastructural resilience. Surely the focus should be on rethinking big business’s destruction of local ecologies instead?

 Natural embankments Maplecroft study

 

Even as Odisha and Andhra Pradesh continue to fight the aftermath of cyclonic storm Phailin, new research suggests that cyclones, floods, drought and other climate change-induced disasters will affect one-third of the world’s emerging economies, severely hampering them. 

The research reveals that 31% of global economic output will come from countries that are at ‘high’ or ‘extreme’ risk of impact of climate change by 2025. Released by Maplecroft, the research indicates a 50% increase in current levels of risk, more than double the risk level when the research process began in 2008. It explains that at least $44 trillion worth of combined output from the 67 countries in study will be under increasing threat from the physical impact of frequent and extreme climate-related events such as severe storms, floods and drought. 

The report ranks countries on a CCVI (Climate Change Vulnerability) Index, as part of the sixth annual Climate Change and Environmental Risk Atlas, and shows that the economic impact of climate change will be most keenly felt by Bangladesh (first, and most at risk). India, ranked 20th, is in the ‘extreme risk’ category. Neighbour Pakistan is at 24, also in the ‘extreme risk’ category. China, a giant emerging economy, is 61st and classified as ‘high risk’. The CCVI gives an analysis of key risks to business in the areas of climate change vulnerability and adaptation; emissions and energy use; environmental regulation; and ecosystem services. It includes 26 indices and interactive maps, which have been developed to identify, evaluate and compare climate change and environmental risks down to 22 km² worldwide and provide insight into current and emerging trends. It does so by evaluating three factors: exposure to extreme climate-related events, including sea level rise and future changes in temperature, precipitation and specific humidity; sensitivity of populations, in terms of health, education, agricultural dependence and available infrastructure; and the adaptive capacity of countries to combat the impacts of climate change, which encompasses R&D, economic factors, resource security and the effectiveness of government.

Market and ‘investments for profit’ are concerns

The report raises concerns about investments coming into developing economies like India, whose importance to the world economy is increasing. Highlighting Phailin, the report states that the storm caused an estimated US$4.15 billion worth of damage to the agriculture and power sectors in Odisha, which is also India’s most important mining region. Upto 1 million tonnes of rice were destroyed, while key infrastructure including roads, ports, railways and telecommunications was severely damaged causing major disruption to company operations and the supply chains of industrial mineral users.

By 2025, China’s GDP is estimated to triple from current levels to $28 trillion, while India’s is forecast to rise to $5 trillion -- between them totalling nearly 23% of global economic output. The report worries about investors and advises business houses to stay alert about climate change-induced events. A spokesperson of the company says: “Cyclone Phailin demonstrates the critical need for business to monitor the changing frequency and intensity of climate-related events, especially where infrastructure and logistics are weak.”

People and environment first

Although climate change puts business at risk, people and the environment should be of greater concern. The report, naturally, talks only about one dimension: the market and risks it will be exposed to. What concerns us, as a post-Phailin lesson, is the need for ecological adaptability. 

“With global brands investing heavily in vulnerable growth markets to take advantage of the spending power of rising middle class populations, we are seeing increasing business exposure to extreme climate-related events on multiple levels, including their operations, supply chains and consumer base,” says a company spokesperson. Further, according to the company, the ability of vulnerable countries to manage the direct impact of extreme events on infrastructure will be a significant factor in mitigating the economic impacts of climate change and could present opportunities for investment. Adaptive measures such as building flood defences and greater infrastructure resiliency will, however, call upon the sustained commitment of governments.

Let’s invest in the local natural economy

This is where we have serious concerns. For business and profit-making investors, infrastructure means more constructions. Flood defences, for them, constitute embankments and sea walls; and sustained government commitment translates to loose and lenient environmental rules and regulations in order to facilitate investments. In reality, it’s these very things that have contributed to climate change. As coal investments increase, so has climate change. And artificial infrastructure only makes for ecologically destructive ways of adaptation, ways that are beyond the capacity of local people.

Phailin has left behind a huge trail of destruction, warning us yet again that we are headed in the wrong direction. We have cut down the mangroves and are planning to raise concrete sea walls.  (Uttarakhand still has to recover from the June 2013 disaster, yet we continue to encroach on the flood plains and build in ecologically sensitive zones.) We may have successfully evacuated people before Phailin struck, thereby drastically reducing the scale of human casualties, but we ended up with more casualties in the aftermath, for which we are unprepared.

The report warns that the number and severity of cyclones and floods along the coast will increase. This means more deaths -- both of human beings and animals -- greater destruction of forests, increased ingress of the sea, devastation of farms and the increased misery of farmers. Indeed, the Odisha coast has a long history of devastating cyclones. Meteorologists say that the Bay of Bengal is extremely vulnerable to cyclones; according to Jeff Masters, well-known meteorologist and hurricane hunter, 26 of the 35 deadliest tropical cyclones in world history have been experienced in the Bay of Bengal. In the last two centuries, he says, of all the deaths associated with tropical cyclones, 42% have occurred in Bangladesh, and 27% in India.

The impact of climate change will affect people and the environment far more than it will business.  The solution therefore must take the form of improving adaptation capacities and building community resilience. We should stop tampering with the coastal ecology, and protect the sea with natural embankments. People’s traditional coping methods should be integrated in disaster management planning. They should be offered government support through technology, resources and other means to learn to live with disasters, not control them. 

Ultimately, reducing the number of disasters depends on global economic decisions that affect climate change. There is therefore little point in business houses worrying about the risks unless they can influence the global economy to stop encroaching upon local-ecology-based sustainable economies.

(Ranjan K Panda is a water practitioner, researcher and writer. He convenes a network called Water Initiatives)


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