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India's drought as climate 'tipping point'

An important report has been released by Allianz, a leading global financial service provider, and WWF, a leading global environmental NGO. Both do work (commercial and conservation respectively) in India. The report is titled: 'Major Tipping Points in the Earth’s Climate System and Consequences for the Insurance Sector'.

What is a 'tipping point' and how does it apply to India and our agriculture? The phrase 'tipping point' means that a small change can make a big difference for some systems - which for our project is the agro-ecological systems inhabited by our farming households. In addition, the term 'tipping element' has been introduced to describe those large-scale components of the Earth system that could be forced past a 'tipping point' and would then undergo a transition to a quite different state. That's the context in which the drought of 2009 can be examined.

Here is the short summary of the report's chapter on the Indian monsoon:

Indian Summer Monsoon - shifts in hydrological systems in Asia as a result of hydrological disturbance of monsoon hydrological regimes (particularly Indian Summer Monsoon) combined with disturbance of fluvial systems fed from the Hindu-Kush-Himalaya-Tibetan glaciers (HKHT)

Overview - The impacts on hydrological systems in India under a ‘tipping’ scenario are expected to approximately double the drought frequency and effects from the melting of the Himalayan glaciers and reduced river flow will aggravate impacts.

Drought costs - Extrapolating from the 2002 drought using a simple calculation would suggest that the future costs (in today’s prices) might be expected to double from around $US 21 billion to $US 42 billion per decade in the first half of the century. However, a range of other factors are likely to act to increase these costs and consequences in the same period. The most significant of these are likely to be the combined effects of:

• decreasing probability of consecutive ‘non-drought’ years from which to accumulate surpluses (the probability of two consecutive ‘non-drought’ years is halved from 64% to 36% and for three consecutive years reduced from 51% to 22%);
• the pressures of increasing population on food and food surpluses (identified as equal to an increase in production by >40% by 2020 and continuing thereafter); and
• impacts of climate change on irrigation (with up to a 60% reduction in dry season river flows).

The effect of all of the variables is to increase the likelihood, severity and exposure of populations and the economy to potentially devastating conditions within the first half of this century with implications for water resources, health, and food security, and major economic implications not only for India but for economies regionally and worldwide.

Insurance aspects - The potential scale of drought losses could abort the initiatives to extend insurance more widely into the rural sector. The wider repercussions of drought through an economic slow-down and deterioration in public finances would impact insurers strongly, through the liquidation of private savings and the impairment of investments in public sector securities.

You can find the report and more information here.

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I believe that in future insurance companies will incur enormous losses due to human economic activity. Some tips on this theme see on for students.

Please note that this is the opinion of the author and is Not Certified by ICAR or any of its authorised agents.