India faces increasing climate-induced disasters with over 80% of its population residing in high-risk districts, but adaptation strategies remain reactive due to fragmented risk assessments.

What Are Climate Physical Risks (CPRs)?

• CPRs refer to long-term risks arising from climate change, including acute shocks (floods, cyclones, heatwaves) and chronic stresses (droughts, changing monsoons).
• These are not limited to weather events but include their cascading impacts on infrastructure, livelihoods, health, and national security.
• Determinants of CPR: As per the IPCC, CPR is determined by three factors:
  • Hazard such as extreme weather events)
  • Exposure : people, assets, ecosystems at risk)
  • Vulnerability : system’s ability to withstand and recovery
• Beyond Weather Forecasting: Unlike weather forecasts, CPRs require long-term modelling to track trends and predict evolving hazards.
  • Existing forecasting systems are insufficient to address deep-seated vulnerabilities driven by climate change.
• Need for a New Framework on Climate-Related Risk: A structured climate risk assessment framework is essential to shift from reactive responses to proactive planning based on long-term, localised climate projections and vulnerability mapping.

Role of Global Agreements in Tackling Climate Physical Risks

Paris Agreement (2015)

• Focus on Adaptation: The Paris Agreement under Article 7 mandates all countries to undertake adaptation planning and actions to reduce vulnerability to climate-related physical risks.
• National Adaptation Plans (NAPs): The Paris Agreement encourages countries to develop National Adaptation Plans that integrate long-term climate risk assessments into national planning and development strategies.

Sendai Framework for Disaster Risk Reduction (2015–2030)

• Holistic Risk Reduction: The Sendai Framework promotes understanding and managing disaster risk, emphasizing risk-informed investments and early warning systems to reduce the impacts of extreme weather events.

Challenges in Setting Up a New Framework for Climate Physical Risk (CPR) Assessment

• Fragmented Climate Risk Assessments: Despite mounting evidence, India lacks a unified, scientific system to assess CPRs.
  • Multiple institutions such as IIT Gandhinagar, IMD, and NIDM conduct CPR-related studies, but operate in silos with inconsistent methodologies.
  • This fragmented landscape makes it difficult for policymakers and businesses to make proactive, informed decisions.
• Absence of Standardised Climate Risk Data: Existing tools like flood maps or vulnerability atlases are not integrated into a central repository.
  • Without standardised metrics or accessible datasets, climate risk insights remain isolated and ineffective for long-term planning.
  • Globally, developing countries face similar issues e.g., Sub-Saharan African nations lack region-specific climate datasets to inform planning
• Reactive to Proactive: India’s current adaptation strategies are largely reactive, focusing on damage control rather than risk prevention.
  • A proactive framework must anticipate risks based on long-term climate trends and local vulnerabilities.
• Technical and Modelling Limitations: Climate models such as Representative Concentration Pathways (RCPs) and Shared Socioeconomic Pathways (SSPs) are currently downscaled inadequately to capture the complexities of India’s hyper-local climatic zones.
  • Globally, even developed countries like the U.S. struggle to simulate combined sea-level rise and storm surge scenarios for specific urban zones such as  Miami.

• Private Sector Reluctance: Businesses often view climate risk disclosure as an added compliance burden
  • A 2022 global survey by CDP (Carbon Disclosure Project) revealed that only 41% of global companies have quantified climate-related financial risks.
• Funding Skewed Toward Mitigation: International climate finance prioritises emission reduction over adaptation.
  • Less than 25% of total climate finance in 2022 supported adaptation, leaving CPR framework initiatives underfunded.
• Political and Policy Discontinuity: Frequent shifts in leadership and policy priorities undermine sustained climate planning. 

Way Forward 

• Unified National CPR Framework: Create an integrated system combining data from IMD, NIDM, and academic institutions with standardised metrics and methodologies.
• Centralised Climate Risk Data Hub: Set up a national repository for localised, real-time climate risk data to support public and private decision-making.
• Enhance Regulatory Mandate: Make climate risk disclosures mandatory across financial sectors, aligning with global standards like IFRS ISSB S2.
• Investment in Adaptation Infrastructure: Prioritise funding for resilient infrastructure, local capacity-building, and early-warning systems through public-private partnerships.
• Role of Financial Institutions: Integrating Climate Risks into Financial Oversight.
  • The Reserve Bank of India (RBI) has begun integrating climate risks into its regulatory and supervisory frameworks such as Disclosure Framework on Climate-related Financial Risks.
  • SEBI’s Disclosure: The Securities and Exchange Board of India (SEBI) encourages listed companies to report on Environmental, Social, and Governance (ESG) risks, including climate-related exposures.
• International Models: Countries like the U.S., U.K., and New Zealand use national climate risk frameworks that inform financial regulations and planning.
  • India must adopt a similar approach to integrate CPR into governance and economic decision-making.
• Ensure Policy Continuity: Establish permanent climate risk assessment bodies to ensure consistent, science-based policy across political transitions.

Conclusion

To achieve climate-resilient growth and Viksit Bharat by 2047, India must institutionalise CPR assessments through a unified, science-driven framework that safeguards its people, economy, and environment from escalating climate risks.

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