Economic Impacts of Climate Change
in India’s Cities
Kala Seetharam Sridhar
Abstract Given the significance of climate change, economic importance of cities,
and lack of adequate research in India’s context, in this paper, I deal with climate
change impacts that are linked to market transactions and directly affect a city’s
value of output produced. I examine the impact of climate change which manifests in
temperature differences and rainfall on city-level output in India. I estimate city
output regressions for India’s cities using several approaches. I find that overall,
climate change thus far has impacted India’s cities economically. I find climate
change indicators such as rainfall positively impact nonagricultural output. This
could be possibly due to the positive impact rainfall has on agricultural output, and
the multiplier effects agriculture has on consumer confidence and nonagricultural
output, in the context of developing cities. I find extreme temperature differences
have a positive impact on nonagricultural output per capita, and this could be
because when there are extreme temperatures, resources could move to nonagricultural uses. Coastal districts have higher levels of non-primary output per capita,
when compared with their inland counterparts, which could be due to the fact that
coastal cities are always ahead of others in terms of their economic growth due to
their exposure to and proximity to international markets, when compared with inland
districts. When we examine the impact of climate change on agricultural output, here
are our observations in summary: when both climate change indicators—rainfall and
extreme temperature differences are included, they do not have an impact on agricultural output; however, when rainfall is not controlled for, extreme temperatures
have a positive impact on agricultural output, as they do with nonagricultural output,
which probably refers to the volatility in agricultural output with extreme temperatures. Further, while coastal districts have a positive impact on nonagricultural
output (which is plausible), they experience significantly decreased agricultural
output, due to their salinity and other effects. The policy implications of the research
and limitations of the data are summarized.
K.S. Sridhar (&)
Centre for Research in Urban Affairs,
Institute for Social and Economic Change, Bangalore, India
e-mail: kala@isec.ac.in; kalaseetharam@gmail.com
© Springer International Publishing Switzerland 2016
S. Nautiyal et al. (eds.), Climate Change Challenge (3C)
and Social-Economic-Ecological Interface-Building, Environmental Science,
DOI 10.1007/978-3-319-31014-5_16
279
in India’s Cities
Kala Seetharam Sridhar
Abstract Given the significance of climate change, economic importance of cities,
and lack of adequate research in India’s context, in this paper, I deal with climate
change impacts that are linked to market transactions and directly affect a city’s
value of output produced. I examine the impact of climate change which manifests in
temperature differences and rainfall on city-level output in India. I estimate city
output regressions for India’s cities using several approaches. I find that overall,
climate change thus far has impacted India’s cities economically. I find climate
change indicators such as rainfall positively impact nonagricultural output. This
could be possibly due to the positive impact rainfall has on agricultural output, and
the multiplier effects agriculture has on consumer confidence and nonagricultural
output, in the context of developing cities. I find extreme temperature differences
have a positive impact on nonagricultural output per capita, and this could be
because when there are extreme temperatures, resources could move to nonagricultural uses. Coastal districts have higher levels of non-primary output per capita,
when compared with their inland counterparts, which could be due to the fact that
coastal cities are always ahead of others in terms of their economic growth due to
their exposure to and proximity to international markets, when compared with inland
districts. When we examine the impact of climate change on agricultural output, here
are our observations in summary: when both climate change indicators—rainfall and
extreme temperature differences are included, they do not have an impact on agricultural output; however, when rainfall is not controlled for, extreme temperatures
have a positive impact on agricultural output, as they do with nonagricultural output,
which probably refers to the volatility in agricultural output with extreme temperatures. Further, while coastal districts have a positive impact on nonagricultural
output (which is plausible), they experience significantly decreased agricultural
output, due to their salinity and other effects. The policy implications of the research
and limitations of the data are summarized.
K.S. Sridhar (&)
Centre for Research in Urban Affairs,
Institute for Social and Economic Change, Bangalore, India
e-mail: kala@isec.ac.in; kalaseetharam@gmail.com
© Springer International Publishing Switzerland 2016
S. Nautiyal et al. (eds.), Climate Change Challenge (3C)
and Social-Economic-Ecological Interface-Building, Environmental Science,
DOI 10.1007/978-3-319-31014-5_16
279