Conveying climate statistics: Framing economic risks for action

By Akhilesh Tilotia

A recent statement by the chairperson of the Network for Greening the Financial System (NGFS) sparked an interesting conversation. She was quoted as saying that unchanged global climate policies could cost India 19% of its GDP and the world 15% by 2050. These numbers are stark: how should numbers like these be interpreted and communicated?

The NGFS is a group of 144 central banks contributing to the development of environment and climate risk management in the financial sector, and to mobilise mainstream finance to support the transition to a sustainable economy. NGFS climate scenarios explore a range of plausible outcomes: the fifth iteration was released in November 2024. They provide a common and up-to-date reference point for understanding how climate change (physical risk) and climate policy and technology trends (transition risk) could evolve in different futures.

Note that forecasters, especially of the deep future, point to median numbers: the range for India’s fall in potential GDP in 2050 ranges from ~10% to ~30%. India’s economy is currently projected, across a range of forecasters, to grow at a baseline rate of, say, 7% per annum, while the world economy is expected to grow at 2% annually. Most of these forecasts do not explicitly take into account any climate damage function. With these basic data points, let’s see what conclusions can emerge.

Different ways to communicate data

Loss of one India’s GDP by 2050: If climate inaction were to indeed shave off 19% of India’s GDP in 2050, then a reasonable calculation is to see what the GDP could have been without any climate damage and reduce it by 19%. Starting from the base of $4 trillion in 2025, a 7% annual real growth takes India’s GDP to $21.7 trillion by 2050. A 19% reduction implies a $4 trillion shortfall in the value of India’s GDP in 2050 — equivalent to India’s GDP of today.

Only 90 bps of lower annual growth: If India’s GDP were to settle at the lower $17.6 trillion in 2050, this translates into an annual growth rate of roughly 6.1% over the next 25 years — a deceleration of 90 basis points (bps) each year. Communicated this way, it appears a more manageable number: possibly a combination of policies, reforms, and technological innovations could boost the economic growth back to its trendline. Since most of the climate damage, according to the NGFS, is expected to come from droughts and heatwaves, adaptation measures and policies could help bring down some of these losses.

India could lose $35 trillion over a generation: If we were to assume that India grows, on an average, at 6.1% annually and juxtapose this with a 7% growth line, then the total cumulative loss of the GDP over 25 years can be as high as $35 trillion over the 25-year forecast horizon. This is more than the current stock of wealth in India! Is this incentive enough to take action?

Possible 5% lower growth in GDP in a year: But then there’s a catch: the 90 bps is just a point estimate. The annual impact might oscillate between 75 and 125 bps, with some years seeing a bruising 400-500 bps hit and others barely registering a blip. A steady 90-bps loss might not sound alarming enough to stir action, but framing it as sporadic, high-impact shocks could. Look no further than Pakistan in 2022 when floods had one-third of the country under water. Is this shock the right way to spur action?

A 3x growth hit for the world: Contrast India’s numbers with the global picture. The world economy, which is expected to grow at a more modest 2% annually, could see its GDP shrink by 15% by 2050. Using the same logic and calculations as above, this could imply an annual growth rate of just 1.3% — a loss of 70 bps per year. For a slower-growing global economy, this is far more material. A 70-bps loss of growth over a 200-bps annual number is a loss of 35% of the growth potential; compare that with India’s 13% (90/700). Should we say that the world could see a 3x growth hit from climate than India?

A global climate-led contraction: Now if the average growth is expected to come by 70 bps, it is possible that there could be years when the impact is above 200 bps. This could mean that the entire growth potential of the world is lost that year. It is plausible to imagine a scenario that climate change could tip the world into a contraction in a particularly nasty year. Is that the kind of headline (“Climate change risks global recession”) that grabs attention and forces leaders to act?

Communicating for action

None of the above statements are wrong, per se. They are simply different ways of looking at the long-term forecasts and visualising the outputs. Dry basis points and GDP forecasts possibly don’t cut it — they’re too academic, too distant. Maybe citizens and policymakers need dramatic stories that resonate. When does the precision of science become the hyperbole of a politician?

Communicating climate risk isn’t just about presenting numbers — it’s about framing them in ways that provoke action. A 90-bps drop in annual growth might sound manageable, but losing an entire year’s GDP or plunging the global economy into recession paints a far more urgent picture.

Policymakers, industry leaders, and citizens must recognise that climate action is not just an environmental necessity but an economic imperative. The discussion must move beyond abstract projections to real-world consequences — disruptions to livelihoods, food and water security, health crises, and financial instability. Only when statistics translate into relatable, urgent narratives can they drive the momentum needed for meaningful change.

India has the opportunity to mitigate these risks through proactive policies, sustainable investments, and international cooperation. The choice is clear: act now.

The writer is distinguished fellow at the Infravision Foundation.

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