Will climate change mean India will get too hot to work?

(22 pages)

While India is managing the COVID-19 pandemic, it cannot lose sight of climate risk, which is rising. The coronavirus crisis holds profound lessons that can help us address climate risk—if we make greater economic and environmental resiliency core to our planning for the recovery ahead. Indeed, economic stimulus in the wake of the pandemic can help restore growth, while also addressing climate risk.

India faces a rapidly changing and degrading physical environment. The challenges of water scarcity and air pollution are well known. Less well appreciated is the impact extreme heat and humidity will likely have on the economy and the toll it could take on human life. In this case study we analyze the direct impact of climate change-driven heat and humidity extremes on India.

We first analyze the “inherent risk,” absent adaptation and mitigation, to assess the magnitude of the challenge and highlight the case for action. We assess inherent risk over the next decade, and then examine the evolution of that risk through to 2050. To assess inherent risk, we relied on the RCP 8.5 scenario (see sidebar, “An overview of the case study analysis”).

An overview of the case study analysis

In Climate risk and response: Physical hazards and socioeconomic impacts, we measured the impact of climate change by the extent to which it could affect human beings, human-made physical assets, and the natural world. We explored risks today and over the next three decades and examined specific cases to understand the mechanisms through which climate change leads to increased socioeconomic risk.

In order to link physical climate risk to socioeconomic impact, we investigated cases that illustrated exposure to climate change extremes and proximity to physical thresholds. These cover a range of sectors and geographies and provide the basis of a “micro-to-macro” approach that is a characteristic of McKinsey Global Institute research. To inform our selection of cases, we considered over 30 potential combinations of climate hazards, sectors, and geographies based on a review of the literature and expert interviews on the potential direct impacts of physical climate hazards. We found these hazards affect five different key socioeconomic systems: livability and workability, food systems, physical assets, infrastructure services, and natural capital.

We ultimately chose nine cases to reflect these systems and to represent leading-edge examples of climate change risk. Each case is specific to a geography and an exposed system, and thus is not representative of an “average” environment or level of risk across the world. Our cases show that the direct risk from climate hazards is determined by the severity of the hazard and its likelihood, the exposure of various “stocks” of capital (people, physical capital, and natural capital) to these hazards, and the resilience of these stocks to the hazards (for example, the ability of physical assets to withstand flooding). We typically define the climate state today as the average conditions between 1998 and 2017, in 2030 as the average between 2021 and 2040, and in 2050 between 2041 and 2060. Through our case studies, we also assess the knock-on effects that could occur, for example to downstream sectors or consumers. We primarily rely on past examples and empirical estimates for this assessment of knock-on effects, which is likely not exhaustive given the complexities associated with socioeconomic systems. Through this “micro” approach, we offer decision makers a methodology by which to assess direct physical climate risk, its characteristics, and its potential knock-on impacts.

Climate science makes extensive use of scenarios ranging from lower (Representative Concentration Pathway 2.6) to higher (RCP 8.5) CO2 concentrations. We have chosen to focus on RCP 8.5, because the higher-emission scenario it portrays enables us to assess physical risk in the absence of further decarbonization. (We also choose a sea level rise scenario for one of our cases that is consistent with the RCP 8.5 trajectory). Such an "inherent risk" assessment allows us to understand the magnitude of the challenge and highlight the case for action. For a detailed description of the reason for this choice, see the technical appendix of the full report.

Our case studies cover each of the five systems we assess to be directly affected by physical climate risk, across geographies and sectors. While climate change will have an economic impact across many sectors, our cases highlight the impact on construction, agriculture, finance, fishing, tourism, manufacturing, real estate, and a range of infrastructure-based sectors. The cases include the following:

For livability and workability, we look at the risk of exposure to extreme heat and humidity in India and what that could mean for that country’s urban population and outdoor-based sectors, as well as at the changing Mediterranean climate and how that could affect sectors such as wine and tourism.
For food systems, we focus on the likelihood of a multiple-breadbasket failure affecting wheat, corn, rice, and soy, as well as, specifically in Africa, the impact on wheat and coffee production in Ethiopia and cotton and corn production in Mozambique.
For physical assets, we look at the potential impact of storm surge and tidal flooding on Florida real estate and the extent to which global supply chains, including for semiconductors and rare earths, could be vulnerable to the changing climate.
For infrastructure services, we examine 17 types of infrastructure assets, including the potential impact on coastal cities such as Bristol in England and Ho Chi Minh City in Vietnam.
Finally, for natural capital, we examine the potential impacts of glacial melt and runoff in the Hindu Kush region of the Himalayas; what ocean warming and acidification could mean for global fishing and the people whose livelihoods depend on it; as well as potential disturbance to forests, which cover nearly one-third of the world’s land and are key to the way of life for 2.4 billion people.

We find that India could become one of the first places in the world to experience heat waves that cross the survivability limit for a healthy human being resting in the shade, and this could occur as early as next decade. Moreover, rising heat and humidity levels will impact labor productivity and economic growth in an economy that relies substantially on outdoor work.

How big is the threat of extreme heat and humidity in India?

While the hottest air temperatures ever recorded have been in places like Saudi Arabia, the Sahara Desert, and Death Valley, California, in the United States, the north of India has historically exhibited some of the world’s hottest wet-bulb temperatures. Wet-bulb temperature is an indicator that combines air temperature and relative humidity and provides a more accurate measure of heat stress on the human body than air temperature alone (see sidebar, “Understanding wet-bulb temperatures”). According to the scientific literature, 35 degrees wet-bulb temperature is commonly regarded as the heat-stress limit for human survival. At 35°C wet-bulb a healthy human being can survive, resting in the shade, for approximately five hours.

Understanding wet-bulb temperatures

High wet-bulb temperatures, a function of both air temperature and relative humidity, are more dangerous to human beings than extreme air temperatures. Wet-bulb temperature is technically defined as the minimum temperature to which a parcel of air can be cooled by evaporation at a constant pressure. Human beings are able to acclimatize to extreme temperatures by increasing the volume of sweat that their bodies process. With the introduction of humidity, however, the ability of air to hold additional water decreases, and the evaporation of sweat becomes more difficult, making heat stress harder to bear. At a wet-bulb temperature of 35 degrees, healthy, well-hydrated human beings resting in the shade would see core temperatures rise to lethal levels after roughly four to five hours of exposure. Any introduction of direct sunlight, activity, or dehydration would shorten this period. In order to better conceptualize this threshold, 35-degree wet-bulb temperature can be roughly defined as a convex line on a temperature/humidity axis, running between 35-degree air temperature with 100 percent relative humidity, and 50-degree air temperature with 40 percent relative humidity.

While wet-bulb temperatures during the worst heat waves in India today rarely, if ever, exceed 32 degrees, the climatological analysis conducted for this case study indicates that temperatures during the most severe heat waves in the hottest parts of India could begin to breach 34 degrees wet-bulb by 2030. Such high temperatures have been recorded only a couple of times on Earth, including a 34.6-degree wet-bulb measurement on the coast of the Persian Gulf in July of 2015, and a later 35.4-degree wet-bulb measurement in the same region. Exposure to 34-degree wet-bulb temperatures will increase mortality risk for the sick and elderly, but more importantly, due to the amplifying urban heat-island effect which can raise temperatures in urban areas, for example, due to the presence of concrete buildings and limited green spaces, urban or peri-urban centers exposed to these temperatures may cross the 35-degree survivability threshold for healthy adults. By 2050, portions of northern India could begin to experience heat waves that cross the 35-degree wet-bulb survivability with a probability of occurrence at least once in the decade centered on 2050 approaching 80 percent (Exhibit 1). As heat and humidity increase, this could also affect labor productivity in outdoor work. This phenomenon occurs not only due to the need to take breaks to avoid dangerous core temperature rise, but also because the body will fatigue to reduce the amount of work (and therefore heat) that it is able to produce.

The annual probability of lethal heat waves in India and surrounding areas is expected to increase between 2018 and 2050.

Millions of lives and billions of dollars are at risk.

Based on a district-by-district geospatial analysis of population urbanicity, we estimate that, under our “inherent risk” scenario, 160–200 million people could be living in urban areas in India with a non-zero annual probability of experiencing a lethal heatwave as soon as 2030. Today, air conditioner penetration in India is about 10 percent. Under business as usual air conditioning growth, only about half will have protection from air conditioning. The average annual probability of a lethal heatwave in those regions is projected to be about 5 percent, meaning the probability of at least one heatwave occurring during the decade centered around 2030 could be about 40 percent. By 2050, the number of people living in at-risk regions will increase to 310–480 million. If historical growth rates continue, it is expected that most people in India will own an air conditioning unit by 2050, and so will have a degree of protection against this risk. It is important that ways to reduce air conditioner carbon footprint are identified in the near term, to prevent large-scale air conditioner growth from exacerbating underlying climate risk.

Climate risk and response

Learn how Earth’s changing climate could impact socioeconomic systems

Another consequence of chronic exposure to extreme heat is a rapid decrease in the capacity for outdoor work. We estimate that the number of daylight hours during which outdoor work is unsafe will increase approximately 15 percent by 2030, compared with today’s levels (Exhibit 2).

The affected area and intensity of extreme heat and humidity is projected to increase, leading to a higher expected share of lost working hours in India and surrounding areas.

This is significant because India’s economy is highly dependent on heat-exposed labor. As of 2017, heat-exposed work produces about 50 percent of GDP, drives about 30 percent of GDP growth, and employs about 75 percent of the labor force, some 380 million people. Based on a geospatial, district-by-district analysis of exposed GDP and projected lost working hours, as well as considering effects on other sectors that exchange inputs and outputs with sectors exposed to outdoor heat and the expected transition out of outdoor work over time, we calculate that lost labor hours due to increasing heat and humidity could put approximately 2.5–4.5 percent of GDP at risk by 2030, equivalent to roughly $150–250 billion.

What would it take to reduce the risk from extreme heat and humidity in India?

Given the inherent risk of rising wet-bulb temperatures, adaptation is likely to happen in India but may need to be accelerated. For example, by shifting working hours for outdoor workers, undertaking albedo heat management efforts in cities, establishing early-warning systems and cooling shelters to protect people, and also considering movement of people and capital from high-risk areas. Investing in heat management will be critical, and stakeholders will also need to consider approaches to accelerate the transition out of outdoor work already underway.

Adaptation in general will be challenging because heat is a pervasive risk and involves fundamental changes in how people conduct their daily lives (for example, shifting work hours may entail potential cultural and economic difficulties). Adaptation will be particularly challenging for the urban poor, who will likely require public support, for example in the form of emergency shelters.

We calculate that addressing the risk of lethal heat waves by 2030, using air-conditioning, could come with capital costs of up to $110 billion. Both public- and private-sector stakeholders have an important role to play in developing and delivering the necessary technological and regulatory solutions.

For additional details, download the case study, Will India get too hot to work? (PDF–2MB).

About this case study:

In January 2020, the McKinsey Global Institute published Climate risk and response: Physical hazards and socioeconomic impacts. In that report, we measured the impact of climate change by the extent to which it could affect human beings, human-made physical assets, and the natural world over the next three decades. In order to link physical climate risk to socioeconomic impact, we investigated nine specific cases that illustrated exposure to climate change extremes and proximity to physical thresholds.