To tackle the climate crisis, address inequalityExtreme heat could ultimately lead to a 15% decline in 'outdoor working capacity'.
Anirban Bhattacharya
Last Updated IST
Representative image. Credit: Getty images
Representative image. Credit: Getty images

Every morning, when we turn the pages of the newspaper, we get a glimpse of a rather grim future. We read about the 54 bodies in the hospital in Ballia who succumbed during a heat wave; the Yamuna seemed to have avenged its neglect in the national capital. We read about the second straight year when our wheat production has taken a hit due to the heat wave and about the skyrocketing tomato prices amid extreme heat and heavy rains.

As much as 90% of India’s total area is in extreme heat danger zones, says Ramit Debnath, a Cambridge scholar.

Extreme heat could ultimately lead to a 15% decline in “outdoor working capacity”. This translates into a reduction in the quality of life for up to 48 crore Indians, and will cost 2.8% of GDP by 2050. Other reports are more dire.


According to a McKinsey report, the lost labour hours due to increasing heat and humidity could put approximately 2.5–4.5% of GDP at risk by 2030. India is already losing the most in the world due to heat, a whopping US$101 billion annually, according to a report by Nature Communications.

If we are to look for the culprits causing this global warming, they are the well-off with a consumption pattern that is unsustainable. They are the beneficiaries of a system built on the idea of insatiable greed and unending growth that is both extractive and unequal. The top 1% of emitters globally each have carbon footprints of over 50 metric tonnes of CO2, which is more than 1,000 times greater than those of the bottom 1% of emitters.

The same is true when we look within our own boundaries. The bottom half of the population emits only 1 metric tonne per year in India, while the top 1% of the richest Indians emit 32.4 tonnes on average. In fact, in terms of emission inequality within national borders, India, China, and most of the emerging economies fare worse than the advanced economies.

Who bears the carbon brunt? Crop failures will certainly affect farmers significantly. But even otherwise, it is the poor who are disproportionately exposed to the extremes of the climate. As per a 2019 study that compared exposure to heat between low-income and other neighbourhoods in several cities of the subcontinent, including Delhi, it was revealed that it is the people in densely built, low-income neighbourhoods with no open green spaces who tend to suffer the most as the buildings of these neighbourhoods trap heat. Then again, another study shows that the cumulative cost of the Mumbai floods in 2005 was much greater for the poor as a proportion of their income than it was for the rich, as the poor had to repeatedly spend on repairs to their homes. While the rich contribute far more to the climate crisis, it is the poor who suffer.

In a letter addressed to the World Bank and the UN, more than 200 economists, including Jayati Ghosh, Joseph Stiglitz, and Thomas Piketty, have said that “Extreme poverty and extreme wealth have risen sharply and simultaneously for the first time in 25 years.” They were backed by the likes of former UN secretary general Ban Ki-moon and New Zealand’s former prime minister Helen Clark, among others. They said that “without a sharp reduction in inequality, the twin goals of ending poverty and preventing climate breakdown will be in clear conflict.”

We would need an immense amount of public investment to ensure a just transition, to build the social and material infrastructure that is climate resilient, or to mitigate and adapt to the extremes. To both address inequality and raise the resources needed to combat the climate emergency, taxing the super rich is an idea whose time has come.

Just before the global summit in Paris last month, a group of more than 100 leading economists urged taxing extreme wealth to spend on the energy transition of the poorer economies or on loss
and damage. Research suggests that if the combined emissions of wealthy
countries were to be accounted for the climate crisis’s impact on poorer countries, the rich would owe the poor $6 trillion
a year in reparations.

Now, while we team up and heighten the pressure by all means on the global north to pay up, the deaths and suffering won’t wait. There have been over 1,338 deaths in India due to extreme weather in 2020; the death toll was 1,750 in 2021. And last year, it was 2,220. These are the official numbers; the actual numbers are likely to be much higher.

We can’t let the poor suffer when we can make the superrich of the country (who participate in superfluous consumption and emissions) pay at least partly for the transition, mitigation, or damage through a minimal wealth and inheritance tax. Just for the sake of demonstration, the total wealth of the top 1% of the wealthy in 2021 was about INR 427 lakh crore. Only a 2% wealth tax on the top 1% could generate about INR 8.54 lakh crore for the exchequer. In fact, over less than 10 years, such a tax could have generated what the RBI estimates to be our cumulative total expenditure (Rs 85.6 lakh crore) for adapting to climate change by 2030.

Alternatively, a progressive wealth tax of 2-6% spread over five wealth slabs on, say, the 1,007 individuals having above Rs 1,000 crore of wealth in India (as per the Hurun Rich List, 2021) could have generated Rs 2.76 lakh crores. Alongside, if we could add a modest 33% inheritance tax on just the top 1% rich (which is less than say Japan’s 50% or equivalent to that of Ireland), we could cumulatively generate nearly Rs 10 lakh crore, which can help in addressing the food insecurity, health
expenditure, and other welfare expenditure that the climate crisis is going to bring in its wake.

It is high time that we take such measures before more such news stories like the Ballia Hospital, floods, or food crises find their way into our newspapers.

(The writer leads the National Finance team at the Centre for Financial
Accountability, New Delhi.)

(This is the ninth in a series of articles on inequality in India, curated in
collaboration with the Centre for
Financial Accountability, New Delhi)

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(Published 20 July 2023, 23:51 IST)