IDEAS home Printed from https://ideas.repec.org/p/osf/socarx/4dhy6_v1.html

Economic Impact of Global Warming in India: An Updated Review of Methods, Policies, and Recent Empirical Literature

Author

Listed:
  • Kumar, Naveen
  • Maiti, Dibyendu

Abstract

This Chapter reviews empirical methodologies studying the impact of global warming on economic indicators inIndia. We begin with an analysis of global climate dynamics, which includes definitional debate of level and growtheffects, using climate econometrics to highlight the methodological issue in temperature-GDP econometrics, andsummarising methodological discussion on differentiation between weather and climate change. The chapter thenevaluates India's vulnerability to climate shocks, detailing macroeconomic impacts on critical sectors such asagriculture, health, and productivity, and reviews the evolution of India's environmental policies. We further reviewthe role of fiscal, regulatory, and monetary policies in facilitating climate adaptation and mitigation. Additionally,we explore diverse econometric approaches for estimating climate change impacts, including cross-sections andpanel methods. This review highlights the urgency of coordinated international action and the need for India toimplement robust climate policies to ensure sustainable economic growth and fulfil its emission reduction targets.

Suggested Citation

  • Kumar, Naveen & Maiti, Dibyendu, 2026. "Economic Impact of Global Warming in India: An Updated Review of Methods, Policies, and Recent Empirical Literature," SocArXiv 4dhy6_v1, Center for Open Science.
    • Handle: RePEc:osf:socarx:4dhy6_v1
    DOI: 10.31219/osf.io/4dhy6_v1
    as

    Download full text from publisher

    File URL: https://osf.io/download/6a245d81e43e82782a8f993e/
    Download Restriction: no
    File URL: https://libkey.io/10.31219/osf.io/4dhy6_v1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Kelly, David L. & Kolstad, Charles D. & Mitchell, Glenn T., 2005. "Adjustment costs from environmental change," Journal of Environmental Economics and Management, Elsevier, vol. 50(3), pages 468-495, November.
    2. Frances C. Moore & David B. Lobell, 2014. "Adaptation potential of European agriculture in response to climate change," Nature Climate Change, Nature, vol. 4(7), pages 610-614, July.
    3. Benjamin F. Jones & Benjamin A. Olken, 2010. "Climate Shocks and Exports," American Economic Review, American Economic Association, vol. 100(2), pages 454-459, May.
    4. Nordhaus, William D, 1991. "To Slow or Not to Slow: The Economics of the Greenhouse Effect," Economic Journal, Royal Economic Society, vol. 101(407), pages 920-937, July.
    5. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    6. Martin L. Weitzman, 1974. "Prices vs. Quantities," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(4), pages 477-491.
    7. Damini Singh & Indrani Gupta & Sagnik Dey, 2022. "Effect of Air Pollution on Cognitive Performance in India," IEG Working Papers 452, Institute of Economic Growth.
    8. Dibyendu Maiti & Naveen Kumar & Debajit Jha & Soumyadipta Sarkar, 2024. "Post-COVID Recovery and Long-Run Forecasting of Indian GDP with Factor-Augmented Error Correction Model (FECM)," Computational Economics, Springer;Society for Computational Economics, vol. 63(3), pages 1095-1120, March.
    9. Gregory Casey & Stephie Fried & Ethan Goode, 2023. "Projecting the Impact of Rising Temperatures: The Role of Macroeconomic Dynamics," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 71(3), pages 688-718, September.
    10. Marshall Burke & Solomon M. Hsiang & Edward Miguel, 2015. "Global non-linear effect of temperature on economic production," Nature, Nature, vol. 527(7577), pages 235-239, November.
    11. Michael T. Kiley, 2024. "Growth at risk from climate change," Economic Inquiry, Western Economic Association International, vol. 62(3), pages 1134-1151, July.
    12. Carleton, Tamma A & Hsiang, Solomon M, 2016. "Social and economic impacts of climate," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt2vz2d2zz, Department of Agricultural & Resource Economics, UC Berkeley.
    13. Maximilian Kotz & Leonie Wenz & Annika Stechemesser & Matthias Kalkuhl & Anders Levermann, 2021. "Day-to-day temperature variability reduces economic growth," Nature Climate Change, Nature, vol. 11(4), pages 319-325, April.
    14. Naveen Kumar & Dibyendu Maiti, 2024. "The Dynamic Causal Impact of Climate Change on Economic Activity - A Disaggregated Panel Analysis of India," Working papers 345, Centre for Development Economics, Delhi School of Economics.
    15. Maddison, David & Rehdanz, Katrin, 2011. "The impact of climate on life satisfaction," Ecological Economics, Elsevier, vol. 70(12), pages 2437-2445.
    16. Birthal, Pratap S. & Hazrana, Jaweriah, 2019. "Crop diversification and resilience of agriculture to climatic shocks: Evidence from India," Agricultural Systems, Elsevier, vol. 173(C), pages 345-354.
    17. Hardeep Singh Amale & Pratap Singh Birthal & Digvijay Singh Negi, 2023. "Delayed monsoon, irrigation and crop yields," Agricultural Economics, International Association of Agricultural Economists, vol. 54(1), pages 77-94, January.
    18. Jonathan Colmer, 2021. "Temperature, Labor Reallocation, and Industrial Production: Evidence from India," American Economic Journal: Applied Economics, American Economic Association, vol. 13(4), pages 101-124, October.
    19. Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2014. "What Do We Learn from the Weather? The New Climate-Economy Literature," Journal of Economic Literature, American Economic Association, vol. 52(3), pages 740-798, September.
    20. Afridi, Farzana & Mahajan, Kanika & Sangwan, Nikita, 2022. "The gendered effects of droughts: Production shocks and labor response in agriculture," Labour Economics, Elsevier, vol. 78(C).
    21. Mendelsohn, Robert & Arellano-Gonzalez, Jesus & Christensen, Peter, 2010. "A Ricardian analysis of Mexican farms," Environment and Development Economics, Cambridge University Press, vol. 15(2), pages 153-171, April.
    22. Joshua Graff Zivin & Matthew Neidell, 2014. "Temperature and the Allocation of Time: Implications for Climate Change," Journal of Labor Economics, University of Chicago Press, vol. 32(1), pages 1-26.
    23. Wolfram Schlenker & Maximilian Auffhammer, 2018. "The cost of a warming climate," Nature, Nature, vol. 557(7706), pages 498-499, May.
    24. Chancellor, Will & Hughes, Neal & Zhao, Shiji & Soh, Wei Ying & Valle, Haydn & Boult, Christopher, 2021. "Controlling for the effects of climate on total factor productivity: A case study of Australian farms," Food Policy, Elsevier, vol. 102(C).
    25. Marco Letta & Richard S. J. Tol, 2019. "Weather, Climate and Total Factor Productivity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(1), pages 283-305, May.
    26. Millner, Antony & McDermott, Thomas K. J., 2016. "Model confirmation in climate economics," LSE Research Online Documents on Economics 67122, London School of Economics and Political Science, LSE Library.
    27. Chang, Jun-Jie & Mi, Zhifu & Wei, Yi-Ming, 2023. "Temperature and GDP: A review of climate econometrics analysis," Structural Change and Economic Dynamics, Elsevier, vol. 66(C), pages 383-392.
    28. Marshall Burke & W. Matthew Alampay Davis & Noah S. Diffenbaugh, 2018. "Large potential reduction in economic damages under UN mitigation targets," Nature, Nature, vol. 557(7706), pages 549-553, May.
    29. Mahajan, Kanika, 2017. "Rainfall Shocks and the Gender Wage Gap: Evidence from Indian Agriculture," World Development, Elsevier, vol. 91(C), pages 156-172.
    30. Emerick, Kyle, 2018. "Agricultural productivity and the sectoral reallocation of labor in rural India," Journal of Development Economics, Elsevier, vol. 135(C), pages 488-503.
    31. E. Somanathan & Rohini Somanathan & Anant Sudarshan & Meenu Tewari, 2021. "The Impact of Temperature on Productivity and Labor Supply: Evidence from Indian Manufacturing," Journal of Political Economy, University of Chicago Press, vol. 129(6), pages 1797-1827.
    32. Maggie Liu & Yogita Shamdasani & Vis Taraz, 2023. "Climate Change and Labor Reallocation: Evidence from Six Decades of the Indian Census," American Economic Journal: Economic Policy, American Economic Association, vol. 15(2), pages 395-423, May.
    33. Simon Dietz & Nicholas Stern, 2015. "Endogenous Growth, Convexity of Damage and Climate Risk: How Nordhaus' Framework Supports Deep Cuts in Carbon Emissions," Economic Journal, Royal Economic Society, vol. 0(583), pages 574-620, March.
    34. Marshall Burke & Kyle Emerick, 2016. "Adaptation to Climate Change: Evidence from US Agriculture," American Economic Journal: Economic Policy, American Economic Association, vol. 8(3), pages 106-140, August.
    35. Acevedo, Sebastian & Mrkaic, Mico & Novta, Natalija & Pugacheva, Evgenia & Topalova, Petia, 2020. "The Effects of Weather Shocks on Economic Activity: What are the Channels of Impact?," Journal of Macroeconomics, Elsevier, vol. 65(C).
    36. David S. Blakeslee & Ram Fishman, 2018. "Weather Shocks, Agriculture, and Crime: Evidence from India," Journal of Human Resources, University of Wisconsin Press, vol. 53(3), pages 750-782.
    37. Teevrat Garg & Maulik Jagnani & Vis Taraz, 2020. "Temperature and Human Capital in India," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 7(6), pages 1113-1150.
    38. Aggarwal, Raavi, 2021. "Impacts of climate shocks on household consumption and inequality in India," Environment and Development Economics, Cambridge University Press, vol. 26(5-6), pages 488-511, October.
    39. Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2012. "Temperature Shocks and Economic Growth: Evidence from the Last Half Century," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(3), pages 66-95, July.
    40. Eshita Gupta, 2012. "Global warming and electricity demand in the rapidly growing city of Delhi: A Semi-parametric variable coefficient approach," Discussion Papers 12-02, Indian Statistical Institute, Delhi.
    41. Birthal, P.S. & Khan, T.M. & Negi, D.S. & Agarwal, S., 2014. "Impact of Climate Change on Yields of Major Food Crops in India: Implications for Food Security," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 27(2).
    42. Blakeslee, David & Chaurey, Ritam & Fishman, Ram & Malghan, Deepak & Malik, Samreen, 2021. "In the heat of the moment: Economic and non-economic drivers of the weather-crime relationship," Journal of Economic Behavior & Organization, Elsevier, vol. 192(C), pages 832-856.
    43. Auffhammer, Maximilian & Mansur, Erin T., 2014. "Measuring climatic impacts on energy consumption: A review of the empirical literature," Energy Economics, Elsevier, vol. 46(C), pages 522-530.
    44. Kalkuhl, Matthias & Wenz, Leonie, 2020. "The impact of climate conditions on economic production. Evidence from a global panel of regions," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).
    45. Carpena, Fenella, 2019. "How do droughts impact household food consumption and nutritional intake? A study of rural India," World Development, Elsevier, vol. 122(C), pages 349-369.
    46. Riccardo Colacito & Bridget Hoffmann & Toan Phan, 2019. "Temperature and Growth: A Panel Analysis of the United States," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 51(2-3), pages 313-368, March.
    47. repec:plo:pmed00:1002619 is not listed on IDEAS
    48. Mendelsohn, Robert & Nordhaus, William D & Shaw, Daigee, 1994. "The Impact of Global Warming on Agriculture: A Ricardian Analysis," American Economic Review, American Economic Association, vol. 84(4), pages 753-771, September.
    49. Anuska Jain & Roisin O'Sullivan & Vis Taraz, 2020. "Temperature and economic activity: evidence from India," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 9(4), pages 430-446, October.
    50. Surender Kumar & Madhu Khanna, 2023. "Distributional heterogeneity in climate change impacts and adaptation: Evidence from Indian agriculture," Agricultural Economics, International Association of Agricultural Economists, vol. 54(2), pages 147-160, March.
    51. Burke, M. & Craxton, M. & Kolstad, C.D. & Onda, C. & Allcott, H. & Baker, E. & Barrage, L. & Carson, R. & Gillingham, K. & Graff-Zivin, J. & Greenstone, M. & Hallegatte, S. & Hanemann, W.M. & Heal, G., 2016. "Opportunities for advances in climate change economics," ISU General Staff Papers 3565, Iowa State University, Department of Economics.
    52. Burke, M & Craxton, M & Kolstad, CD & Onda, C & Allcott, H & Baker, E & Barrage, L & Carson, R & Gillingham, K & Graf-Zivin, J & Greenstone, M & Hallegatte, S & Hanemann, WM & Heal, G & Hsiang, S & Jo, 2016. "Opportunities for advances in climate change economics," University of California at Santa Barbara, Recent Works in Economics qt4tc5d9pb, Department of Economics, UC Santa Barbara.
    53. Anubhab Pattanayak & K. S. Kavi Kumar & Lavanya R. Anneboina, 2021. "Distributional impacts of climate change on agricultural total factor productivity in India," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 26(2), pages 381-401, April.
    54. Kahn, Matthew E. & Mohaddes, Kamiar & Ng, Ryan N.C. & Pesaran, M. Hashem & Raissi, Mehdi & Yang, Jui-Chung, 2021. "Long-term macroeconomic effects of climate change: A cross-country analysis," Energy Economics, Elsevier, vol. 104(C).
    55. Aparajita Dasgupta & Anahita Karandikar, 2021. "Gender-Gap in Learning Outcomes under Rainfall Shocks: The Role of Gender Norms," Working Papers 70, Ashoka University, Department of Economics.
    56. K. Shanmugan & Bhagirath Prakash Baria, 2019. "Agricultural Labour Productivity and Its Determinants in India," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 62(3), pages 431-449, September.
    57. Achyuta Adhvaryu & Namrata Kala & Anant Nyshadham, 2020. "The Light and the Heat: Productivity Co-Benefits of Energy-Saving Technology," The Review of Economics and Statistics, MIT Press, vol. 102(4), pages 779-792, October.
    58. Ridhima Gupta & E. Somanathan & Sagnik Dey, 2017. "Global warming and local air pollution have reduced wheat yields in India," Climatic Change, Springer, vol. 140(3), pages 593-604, February.
    59. Solomon M. Hsiang, 2016. "Climate Econometrics," NBER Working Papers 22181, National Bureau of Economic Research, Inc.
    60. Bhaskar Jyoti Neog, 2022. "Temperature shocks and rural labour markets: evidence from India," Climatic Change, Springer, vol. 171(1), pages 1-20, March.
    61. Olivier Deschênes & Michael Greenstone, 2007. "The Economic Impacts of Climate Change: Evidence from Agricultural Output and Random Fluctuations in Weather," American Economic Review, American Economic Association, vol. 97(1), pages 354-385, March.
    62. Mendelsohn, Robert & Dinar, Ariel & Williams, Larry, 2006. "The distributional impact of climate change on rich and poor countries," Environment and Development Economics, Cambridge University Press, vol. 11(2), pages 159-178, April.
    63. Shreekant Gupta & Partha Sen & Suchita Srinivasan, 2014. "Impact Of Climate Change On The Indian Economy: Evidence From Food Grain Yields," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 5(02), pages 1-29.
    64. Signe Krogstrup & William Oman, 2019. "Macroeconomic and Financial Policies for Climate Change Mitigation: A Review of the Literature," IMF Working Papers 2019/185, International Monetary Fund.
    65. Dietz, Simon & Stern, Nicholas, 2015. "Endogenous growth, convexity of damage and climate risk: how Nordhaus’ framework supports deep cuts in carbon emissions," LSE Research Online Documents on Economics 58406, London School of Economics and Political Science, LSE Library.
    66. Burke, Marshall & Hsiang, Solomon M & Miguel, Edward, 2015. "Global non-linear effect of temperature on economic production," Department of Economics, Working Paper Series qt3g72r0zv, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    67. Tol, Richard S.J., 2024. "A meta-analysis of the total economic impact of climate change," Energy Policy, Elsevier, vol. 185(C).
    68. Balakrishnan, Uttara & Tsaneva, Magda, 2021. "Air pollution and academic performance: Evidence from India," World Development, Elsevier, vol. 146(C).
    69. Gupta, Eshita, 2012. "Global warming and electricity demand in the rapidly growing city of Delhi: A semi-parametric variable coefficient approach," Energy Economics, Elsevier, vol. 34(5), pages 1407-1421.
    70. Solomon Hsiang, 2016. "Climate Econometrics," Annual Review of Resource Economics, Annual Reviews, vol. 8(1), pages 43-75, October.
    71. Kumar, Naveen & Maiti, Dibyendu, 2024. "Long-run macroeconomic impact of climate change on total factor productivity — Evidence from emerging economies," Structural Change and Economic Dynamics, Elsevier, vol. 68(C), pages 204-223.
    72. Eshita Gupta, 2016. "The Effect Of Development On The Climate Sensitivity Of Electricity Demand In India," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 7(02), pages 1-49, May.
    73. Anubhab Pattanayak & K. S. Kavi Kumar, 2021. "Does weather sensitivity of rice yield vary across sub-regions of a country? Evidence from Eastern and Southern India," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 26(1), pages 51-72, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kumar, Naveen & Maiti, Dibyendu, 2025. "Climate change, state capacity and uneven growth: A disaggregated analysis of India," Economic Modelling, Elsevier, vol. 153(C).
    2. Naveen Kumar & Dibyendu Maiti, 2024. "The Dynamic Causal Impact of Climate Change on Economic Activity - A Disaggregated Panel Analysis of India," Working papers 345, Centre for Development Economics, Delhi School of Economics.
    3. Tarsia, Romano, 2024. "Heterogeneous effects of weather shocks on firm economic performance," LSE Research Online Documents on Economics 124251, London School of Economics and Political Science, LSE Library.
    4. Chang, Jun-Jie & Mi, Zhifu & Wei, Yi-Ming, 2023. "Temperature and GDP: A review of climate econometrics analysis," Structural Change and Economic Dynamics, Elsevier, vol. 66(C), pages 383-392.
    5. Lianxiao Yao & Minghui Jin, 2025. "The uneven impact of temperature on the macroeconomy: a perspective on total factor productivity," Economic Change and Restructuring, Springer, vol. 58(4), pages 1-35, August.
    6. Olper, Alessandro & Maugeri, Maurizio & Manara, Veronica & Raimondi, Valentina, 2021. "Weather, climate and economic outcomes: Evidence from Italy," Ecological Economics, Elsevier, vol. 189(C).
    7. Kumar, Naveen, 2025. "Beyond GDP: Quantifying Heterogeneous Impact of Climate Change on Well-being and Social Progress," SocArXiv j5kyc_v1, Center for Open Science.
    8. Valenti, Giulia & Vona, Francesco, 2024. "Hot Wages: How Do Heat Waves Change the Earnings Distribution?," FEEM Working Papers 348848, Fondazione Eni Enrico Mattei (FEEM).
    9. Tol, Richard S. J., "undated". "The Economic Impact of Weather and Climate," FEEM Working Papers 309917, Fondazione Eni Enrico Mattei (FEEM).
    10. Curtin, Finbar & Burgess, Matthew G., 2026. "The empirically inscrutable climate-economy relationship," SocArXiv g8khf_v2, Center for Open Science.
    11. Newell, Richard G. & Prest, Brian C. & Sexton, Steven E., 2021. "The GDP-Temperature relationship: Implications for climate change damages," Journal of Environmental Economics and Management, Elsevier, vol. 108(C).
    12. Chaitat Jirophat & Pym Manopimoke & Suparit Suwanik, 2022. "The Macroeconomic Effects of Climate Shocks in Thailand," PIER Discussion Papers 188, Puey Ungphakorn Institute for Economic Research.
    13. Valerio Intraligi & Marco Biagetti, 2026. "Occupational Heat Stress and Employment Dynamics in Italy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 89(2), pages 1-31, February.
    14. Zhang, Huiming & Zhang, Aixin & Wu, Kai & Cai, Yinyin & Qiu, Yueming (Lucy) & Wang, Shouyang & Wang, Weiwei & Zhao, Yongfan, 2025. "Unequal impacts of temperature deviations on poverty:International Evidence," Structural Change and Economic Dynamics, Elsevier, vol. 74(C), pages 970-990.
    15. Pierre Mérel & Matthew Gammans, 2021. "Climate Econometrics: Can the Panel Approach Account for Long‐Run Adaptation?," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(4), pages 1207-1238, August.
    16. Yalçınkaya, Ömer & Emeç, Abdulkadir Sezai & Kaplan, Fatih & Yurttançıkmaz, Ziya Çağlar, 2026. "The monetary implications of climate risks in the US: Temperature shocks and price stability," International Review of Economics & Finance, Elsevier, vol. 105(C).
    17. Berg, Kimberly A. & Curtis, Chadwick C. & Mark, Nelson C., 2024. "GDP and temperature: Evidence on cross-country response heterogeneity," European Economic Review, Elsevier, vol. 169(C).
    18. Giraldo, Carlos & Giraldo, Iader & Gomez-Gonzalez, Jose E. & Uribe, Jorge M., 2025. "Climate growth at risk in the global south," Energy Economics, Elsevier, vol. 149(C).
    19. Desbordes, Rodolphe & Eberhardt, Markus, 2024. "Climate change and economic prosperity: Evidence from a flexible damage function," Journal of Environmental Economics and Management, Elsevier, vol. 125(C).
    20. Ha Minh Nguyen & Samuel Pienknagura, 2025. "Rising Temperature, Nuanced Effects: Evidence from Seasonal and Sectoral Data," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 88(12), pages 3513-3545, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:osf:socarx:4dhy6_v1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: OSF (email available below). General contact details of provider: https://arabixiv.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.