MGI Research

Will India get too hot to work?

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Extreme heat and humidity could put millions of lives and billions of dollars at risk across India. What will it take to reduce the risk?

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 riskif 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).

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.

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.

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.

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