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Sustainable Development and Climate Change 221

absolute terms expected to lose the equivalent of 34 million full-time jobs in 2030 as a result of
heat stress. Although most of the impact in India will be felt in the agricultural sector, more and
more working hours are expected to be lost in the construction sector, because of heat stress.
These losses underscore the need for investment in building resilience and adoption of policies
for mainstreaming risks through building appropriate social protection systems, including the
provision of social insurance and social assistance which can help workers and their families to
adapt to the consequences of heat stress (ILO 2019).

Climate Risk Insurance
6.32 Climate risk insurance is an important tool for providing security against loss of livelihoods
and of assets as a consequence of disasters. The basic risk faced by agriculturalists is that
of weather variability and the uncertainty of crop yield. The magnitude and intensity of the
same is especially high in India, considering that an overwhelming majority of farmers who
excessively depend on the farming sector have extremely limited means and resources to cope
with the disastrous consequences of crop failure. Thus, given the significant contribution of
the agricultural sector in the Indian economy, coupled with looming “climatic aberrations,”
crop insurance becomes a necessity to mitigate the risks associated with a majority of the
country’s farmers. The weather index insurance for agriculture introduced in 2003, did not find
much success as it suffered from complex processes, moral hazard, adverse selection, and low
penetration of institutional credit. Insurance in Indian agriculture is challenging because of – a
large number of small and scattered landholdings, varying climatic and soil conditions, lack of
basic data, and variety of agricultural practices, making it practically impossible to implement
the scheme on a wide scale. Further, there is widespread lack of knowledge about the nature and
functions of crop insurance amongst the farmers, a majority of whom are illiterate and poor.
6.33 Studies suggest moving towards parametric insurance that agrees to make payment on just
the occurrence of a climate event, data for which is easily accessible. Further, the use of climate
information services could also be useful. The example of the Karnataka State Natural Disaster
Monitoring Centre’s Varuna Mitra which has not only benefitted 3.5 lakh farmers through its
weather advisories but also provides data to insurers at panchayat scale to improve pay-outs to
farmers (Manjunatha 2018) is a case in point.
6.34 With increasing conversion of natural/primary forests to secondary forests driven by
agriculture and development (Padma 2018) risk of new infectious diseases is high; requiring
climate risk insurance to include pandemic insurance as well. An example in this regard is the
insurance bought by Wimbledon tennis tournament against a pandemic occurrence in 2003
following the SARS outbreak, thus receiving an insurance pay-out of US$ 142 million in 2020
which was utilised to pay the prize money and staff wages (Insurance Journal 2020).

Developmental Schemes and Protection of Environment-Need for Convergence

6.35 Many Central and State level incentive schemes (especially KUSUM and state solar
policies) are promoting uptake of low carbon technologies such as decentralised solar systems
for community scale water supply and irrigation as part of its agenda to build rural resilience
in rainfed regions. Some water supply schemes mandate ground water assessments before
approving solar based pumping installations. However, these assessments do not consider
climate projections for the regions. Similarly, solar irrigation pumps are being subsidised
all over the country without any incentive for farmers to use ground water judiciously. Such