The Union Finance Ministry has decided to expand the next annual Economic Survey to include an entire chapter on financing measures to mitigate climate change. Nothing could be a more sensible and timelier step. In the present world, it is admitted on all hands that there should be a balance between economic development and the protection of the environment. But it is a great challenge. Climate change is fraught with unpredictable factors. Climate risks arising out of global warming are likely to be disproportionately high in developing economies. India has a long coastline. Its agriculture is primarily rain-fed and its rivers springing from glaciers present threats.
There is nothing known with certainty about the effects of climate change. But all assessments suggest the need for adopting strategies to meet different contingencies. Temperature fluctuations can adversely affect cropping patterns and agricultural productivity. A rise in the sea level can increase coastal water salinity and incidence of water-borne diseases. Frequent floods can hit infrastructure including dams, bridges, roads and rail. Water availability may change across regions and reduce forest cover. Innovative policies for generating renewable energy and water conservation can make mitigation of climate change more affordable, create new jobs, hike the growth rate and lessen the drain on the national exchequer. The Finance Ministry’s move is commendable. But cutting emissions and funding climate change mitigation calls for a global financial system based on consensus. A series of summit meetings from Copenhagen to Durban has so far made no headway in that direction.