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The current pace of climate change has impacts that range from rising sea levels to extreme weather patterns, forcing governments around the world to grapple with two distinct types of risk: The physical risks of climate change include the potential destruction of land and infrastructure, lost productivity in the agriculture sector and the health impacts of heat stress and natural disasters. Minimising future impacts through decarbonisation, however, creates a set of transition risks as the economy adjusts to new regulations, energy systems and consumer sentiment. Managing these risks will entail mitigation measures that tackle the root causes of climate change – chiefly by reducing carbon emissions – and adaptation measures that build resilience to the impacts that cannot be avoided, such as investments in protective infrastructure. The impacts of climate change pose a particular threat to emerging economies by eroding economic growth, jeopardising the security and freedom from want that underpin peaceful development. Mitigating the progress of climate change requires national policies to limit greenhouse gas (GHG) emissions, but these require substantial near-term investment, altering relative prices, patterns of trade, competitiveness and industrial development. Successes and failures in this nexus also affect geopolitical, geoeconomic and security risks, not least due to their capacity to shape socioeconomic fortunes. This profile focuses on India as a country that faces high transition and physical risks simultaneously. This is the basis for India’s double cost crunch – climate damages raise adaptation needs and can weaken revenues, while transition needs increase financing requirements precisely when capital remains expensive and public resources are under pressure. The result is a compression of near-term policy space at a critical stage of structural transformation. This profile highlights the geopolitical, geoeconomic and security dimensions of this predicament and offers recommendations.
