Climate
India’s Infrastructure Push Is Racing Ahead of Its Climate Insurance Cover
India’s infrastructure spending has crossed 3% of GDP, but climate risk is rising even faster. As floods and extreme weather become more predictable, parts of the country are edging towards the limits of insurability—raising urgent questions about how resilient India’s growth really is.
India is investing in infrastructure at a scale unprecedented in its post-liberalisation history. Capital expenditure on infrastructure has now crossed 3% of GDP, spanning railways, highways, ports, power plants and airports—assets designed to last well over half a century. Yet, as new research shows, a growing share of this infrastructure is coming up in regions increasingly exposed to climate extremes, raising a critical question for policymakers, insurers and investors alike: can India afford to insure the future it is building?
A new report by Climate Trends on climate risks and insurance for India’s infrastructure argues that climate impacts are no longer episodic shocks. Instead, they are following a clear upward trajectory in frequency, severity and geographic spread, particularly after the mid-2010s. Hydro-meteorological disasters—floods, extreme rainfall, cyclones and landslides—now dominate India’s climate risk profile, with flood risk emerging as the most persistent hazard for fixed, high-value assets.
When Growth and Risk Rise at Different Speeds
One of the report’s central findings is the non-linear relationship between asset growth and climate exposure. Using Delhi as a case study, the analysis shows that while urban expansion grew at roughly 1.3% CAGR between 1986 and 2016, flood exposure increased at nearly 2.46% CAGR, creating a widening divergence that is projected to grow further over time.
This divergence matters because infrastructure assets are geographically fixed and designed for long operational lives. As asset concentration rises and climate impacts become more predictable, the report warns that certain regions may approach the threshold of uninsurability, where premiums become unaffordable or coverage simply unavailable.
Insurers See Opportunity—and Limits
To test these risks against market realities, the researchers surveyed leading non-life insurers and reinsurers operating in India, including SBI General Insurance, Munich Re India, Swiss Re India and General Insurance Corporation of India.
The responses reveal a nuanced picture. Insurers broadly agree that most of India remains insurable, and climate risk insurance is still viewed as a business opportunity. However, hydropower projects and national highways located in flood- and landslide-prone regions repeatedly emerged as areas of concern. One insurer reported rising premium unaffordability for hydropower projects—an especially notable finding given that many planned hydropower assets are located in high-risk Himalayan regions vulnerable to landslides, floods and glacial lake outburst floods (GLOFs).
| >> Globally, insured property losses exceeded USD 140 billion in FY 2024–25 |
| >> India’s natural catastrophe losses in 2023 alone reached USD 12 billion |
A consistent challenge flagged across insurers is the difficulty of pricing climate risk under deep uncertainty. Respondents highlighted gaps in modelling for long-term risks such as sea-level rise, forest fires and compound events, raising the likelihood of a widening protection gap between economic losses and insured coverage.
Losses Are Already Mounting
The financial context underscores why these concerns are intensifying. Globally, insured property losses exceeded USD 140 billion in FY 2024–25, while India’s natural catastrophe losses in 2023 alone reached USD 12 billion, significantly above the previous decade’s average.
Sub-national data further sharpens the picture. States such as Assam, Andhra Pradesh, Odisha, Uttarakhand, Himachal Pradesh, Sikkim, Ladakh and several north-eastern states are identified as among the most climate-vulnerable. Yet these regions also host some of India’s largest infrastructure investments, amounting to nearly Rs 2.95 lakh crore—from port modernisation projects in Odisha and Andhra Pradesh to tunnels, highways and hydropower projects in the Himalayas.
Insurance Is Evolving—but Not Fast Enough
Insurers acknowledge the gap and point to ongoing innovation. Parametric insurance products for heat stress, excess rainfall and flooding are gaining traction, alongside state-level risk transfer mechanisms. Yet coverage remains absent for several high-impact events, including cloudbursts and landslides, even as these hazards grow more frequent.
At the same time, India’s insurance market is expanding rapidly. Premiums are projected to grow at 6.7% in life insurance and 8.3% in non-life insurance through 2028, reflecting both economic growth and rising climate vulnerability.
The concern, however, is whether risk pricing can keep pace with physical reality.
Integrating Climate Risk Before the First Brick
The report also says that climate resilience must shift from being a post-disaster consideration to a core design constraint in infrastructure planning. Among its key recommendations are the standardisation of regulatory frameworks for risk disclosure, underwriting, premium pricing and loss assessment, alongside investment in advanced actuarial models and innovative instruments such as parametric insurance and catastrophe bonds.
Aarti Khosla, Founder and Director of Climate Trends, notes: “As India seeks big investments at the World Economic Forum and plans double-digit (nominal) growth over the next five years, it would be remiss to not point out the risks to India’s infrastructure posed by climate impacts and extreme weather events – which are unarguably increasing in frequency, severity, and geographical spread. The country’s rising exposure for its essential assets could thus lead to mounting climate-induced losses, which would be a fiscal and financial burden. Climate resilience must therefore be integrated into infrastructure planning from the very beginning to minimise the costs of post-disaster reconstruction. Also, several steps will have to come together to ensure long-term insurance viability for such assets, such as advanced actuarial models and standardised frameworks for risk disclosure, premium pricing and loss assessment.”
The Risk Beneath the Growth Story
India’s infrastructure push is central to its growth ambitions and long-term self-sufficiency. But the evidence suggests that climate risk is fast becoming a primary determinant of whether that growth remains financially sustainable. Without integrating resilience and insurability into planning decisions today, the cost of tomorrow’s infrastructure may be borne not just by insurers, but by public finances and future generations.
Climate
Could Global Warming Make Greenland, Norway and Sweden Much Colder?
A Nordic Council report warns that global warming could make Norway colder if the Atlantic ocean circulation collapses, triggering severe climate impacts.
Global warming is usually associated with rising temperatures—but a new Nordic report warns it could drive parts of northern Europe into far colder conditions if a major Atlantic ocean current collapses.
Greenland, Norway and Sweden could experience significantly colder climates as the planet warms, according to a new report by the Nordic Council of Ministers that examines the risks linked to a possible collapse of the Atlantic Meridional Overturning Circulation (AMOC).
The report, A Nordic Perspective on AMOC Tipping, brings together the latest scientific evidence on how global warming is slowing the AMOC—one of the world’s largest ocean circulation systems, responsible for transporting heat from the tropics to the North Atlantic. While a full collapse is considered unlikely, the authors warn that it remains possible even at relatively low levels of global warming, with potentially disruptive consequences for northern countries.
The Reversal
If the circulation were to weaken rapidly or cross a tipping point, the report notes, northern Europe could cool sharply even as the rest of the world continues to warm. Such a reversal would have wide-ranging effects on food production, energy systems, infrastructure, and livelihoods across the Nordic region.
“The AMOC is a key part of the climate system for the Nordic region. While the future of the AMOC is uncertain, the potential for a rapid weakening or collapse is a risk we need to take seriously,” said Aleksi Nummelin, Research Professor at the Finnish Meteorological Institute, in a media statement. “This report brings together current scientific knowledge and highlights practical actions for mitigation, monitoring and preparedness.”
A climate paradox
The AMOC plays a central role in maintaining the relatively mild climate of Northern Europe. As global temperatures rise, melting ice from Greenland and increased freshwater input into the North Atlantic are expected to weaken this circulation. According to the report, such changes could reduce heat transport northwards, leading to colder regional conditions—particularly during winter—even under a globally warming climate.
Scientists caution that the impacts would not simply mirror gradual climate change trends. Instead, an AMOC collapse could trigger abrupt and uneven shifts, including expanded sea ice, stronger storms, altered rainfall patterns, and rising sea levels along European coastlines. Some of these impacts would occur regardless of when or how quickly the circulation weakens.
The report also highlights global ripple effects. A slowdown of the AMOC could shift the tropical rain belt southwards, with potentially severe consequences for monsoon-dependent regions such as parts of Africa and South Asia, underscoring that AMOC tipping is not a regional concern alone.
Calls for precaution and preparedness
Given the uncertainty surrounding when—or if—the AMOC might cross a critical threshold, the report urges policymakers to adopt a precautionary approach. It stresses that any additional global warming, and prolonged overshoot of the 1.5°C target, increases the risk of triggering a collapse.
Key recommendations include accelerating emissions reductions, securing long-term funding for ocean observation networks, and developing an early warning system that integrates real-world measurements with climate model simulations. The authors argue that such systems should be embedded directly into policymaking to enable rapid responses.
The report also calls for climate adaptation strategies that account for multiple futures—including scenarios in which parts of Northern Europe cool rather than warm. It emphasises that AMOC collapse should be treated as a real and significant risk, requiring comprehensive risk management frameworks across climate, ocean, and disaster governance.
Science driving policy attention
The findings were developed through the Nordic Tipping Week workshop held in October 2025 in Helsinki and Rovaniemi, bringing together physical oceanographers, climate scientists, and social scientists from across Nordic and international institutions. The initiative was partly motivated by an open letter submitted in 2024 by 44 climate scientists, warning Nordic policymakers that the risks associated with AMOC tipping may have been underestimated.
By consolidating current scientific understanding and translating it into policy-relevant recommendations, the report aims to shift AMOC collapse from a theoretical concern to a concrete risk requiring immediate attention.
Climate
Excessive Reliance on Carbon Removal Could Breach Legal Guardrails, Warn Oxford Experts
Oxford study warns excessive reliance on carbon dioxide removal could breach legal climate guardrails and undermine net zero goals
A new interdisciplinary study led by researchers from the University of Oxford has warned that excessive reliance on carbon dioxide removal (CDR) technologies could breach emerging legal guardrails and potentially undermine global net-zero climate goals.
The study examines the international legal framework governing how countries plan to use carbon dioxide removal to meet climate targets. Researchers argue that while CDR will be an essential part of climate action, overdependence on future removal technologies — instead of cutting emissions immediately — could create significant legal and climate risks.
Carbon dioxide removal refers to processes that remove CO₂ from the atmosphere and store it so it no longer contributes to global warming. Methods include nature-based solutions such as tree planting, as well as emerging engineered technologies.
The study analyses how international legal principles, including the harm prevention principle and due diligence obligations clarified by the International Court of Justice’s 2025 Advisory Opinion on Climate Change, apply to national climate strategies. According to the researchers, these legal standards require countries to pursue deep and rapid greenhouse gas reductions while also taking precautionary approaches toward large-scale CDR deployment.
Applying these standards could limit countries’ ability to rely on strategies that risk overshooting the Paris Agreement’s 1.5°C temperature target, which nations are legally obligated to minimise in both magnitude and duration.
“In an uncertain world, some states are gambling on the future deployment of CDR techniques to meet their climate targets in place of more ambitious near-term mitigation measures. This approach risks overshooting the Paris temperature goal and causing serious, pervasive and irreversible climate harms. Our findings emphasise that near-term emissions reductions and feasible CDR strategies are not only ethical imperatives – they are legal requirements,” Professor Lavanya Rajamani said in a media statement.
Researchers also highlighted that many current national climate plans rely on assumptions about future technologies that may not materialise at scale.
“States increasingly plan to meet their climate targets through large-scale removals, yet many of these plans rest on unclear assumptions and technologies that may not materialise. Legal guardrails are essential to avoid passing climate risks on to future generations and to ensure that CDR does not substitute for the emissions reductions urgently needed now,” Dr Rupert Stuart-Smith said.
The study identifies two major types of legal guardrails: substantive and procedural. Substantively, countries must prioritise emissions reductions over removals, ensure CDR strategies are technically and socially feasible, minimise environmental and social harm, and avoid excessive dependence on carbon removals conducted in other countries through international credits.
The authors points out that international law already provides a strong framework to assess national climate strategies, and that many existing plans may fall short of these requirements. Strengthening alignment with legal standards will require greater focus on immediate emissions cuts and improved transparency and realism in how carbon removal is integrated into climate strategies
Procedurally, countries must provide transparent information on projected emissions and removals, clearly distinguish between different CDR methods, and disclose assumptions used in long-term climate planning.
The authors points out that international law already provides a strong framework to assess national climate strategies, and that many existing plans may fall short of these requirements. Strengthening alignment with legal standards will require greater focus on immediate emissions cuts and improved transparency and realism in how carbon removal is integrated into climate strategies.
The study, Legal guardrails on states’ dependence on carbon dioxide removal to meet climate targets, is published in the journal Climate Policy and involves collaboration between researchers from the University of Oxford, Imperial College London, the International Institute for Applied Systems Analysis, Humboldt University of Berlin, and the Potsdam Institute for Climate Impact Research.
Climate
A Green Turn with Gaps: India’s Budget Backs Clean Tech but Skips Climate Adaptation
India’s Budget 2026–27 doesn’t shout climate ambition—but it hardwires it into clean manufacturing, carbon capture and energy supply chains, quietly reshaping the country’s green economy from the inside out.
India’s Union Budget 2026–27 may not carry a standalone climate chapter, but its green intent runs deep through the fine print. From carbon capture and battery storage to critical minerals and clean manufacturing, the budget signals a strategic shift: climate action is no longer framed as an environmental add-on, but as industrial policy and economic risk management rolled into one.
Presented by Finance Minister Nirmala Sitharaman on February 1, 2026, the budget places clean energy and climate-aligned manufacturing at the heart of India’s growth narrative. With a GDP growth target of around 7 percent and a sharp focus on fiscal discipline, sustainability is being embedded into supply chains, cities, transport and finance—quietly but deliberately.
Carbon Capture Takes Centre Stage
The most striking climate-linked announcement is the Rs 20,000 crore allocation over five years for Carbon Capture, Utilisation and Storage (CCUS), aimed at hard-to-abate sectors such as power, steel, cement, refineries and chemicals. For the first time, industrial decarbonisation is being backed at scale through public finance, signalling recognition that renewables alone cannot carry India’s net-zero journey.
As Arunabha Ghosh of CEEW notes, the budget’s “prioritisation of carbon capture, utilisation and storage across power, steel, cement, refineries, and chemicals” places these sectors squarely at the centre of India’s long-term climate pathway. This marks a decisive move from aspiration to infrastructure.

Building the Clean Energy Ecosystem
The energy transition is supported by coordinated allocations across key ministries: Rs 32,915 crore for New and Renewable Energy, Rs 29,997 crore for Power, and Rs 24,124 crore for Atomic Energy. Customs duty exemptions have been extended to lithium-ion cells used in battery energy storage systems, inputs for solar glass manufacturing, and nuclear power project imports till 2035.
Aarti Khosla of Climate Trends captures this shift succinctly: “Coupled with the exemption given to battery manufacturing, VGF for BESS and grant to CCUS, the focus of the government is rightly tilting towards building an energy transition ecosystem.” She adds that continued reforms in power distribution could bring “360-degree improvement in India’s green energy supply chain.”
At the household level, the PM Surya Ghar Muft Bijli Yojana receives a major boost, reinforcing decentralised clean energy as a pillar of inclusive growth. Rooftop solar is increasingly being positioned not just as a climate solution, but as a competitiveness tool for small businesses and urban households.
Supply Chains, Not Just Solar Panels
Rather than headline-grabbing renewable capacity targets, Budget 2026–27 leans into industrial resilience. Duty exemptions for critical minerals processing equipment, solar glass inputs, and battery storage components underline a focus on domestic value addition.
Energy analyst Duttatreya Das of Ember observes that while there are “no big-ticket announcements for renewables,” the continued duty exemptions and manufacturing reforms are expected to “quietly strengthen clean energy supply chains.” This reflects a broader policy philosophy: competitiveness before capacity, foundations before scale.
Rare Earth Corridors and incentives for mineral-rich coastal states further indicate a push to secure upstream inputs essential for EVs, batteries, wind turbines and electronics—areas where geopolitical vulnerabilities are growing.
Clean Mobility and Greener Cities
Sustainability also shapes transport and urban planning. The budget proposes 20 new national waterways over five years, aims to double the share of inland and coastal shipping by 2047, and identifies seven high-speed rail corridors as environmentally sustainable growth connectors. Municipal finance incentives—such as Rs 100 crore support for cities issuing large bonds—open space for green urban infrastructure, including pollution control and climate-resilient services.
Labanya Prakash Jena,Director, Climate and Sustainability Initiative, highlights that such incentives can catalyse “green municipal bonds, particularly for pollution control and urban environmental projects,” linking fiscal reform directly with urban sustainability.
The Gaps That Remain
Despite these advances, the budget remains notably silent on climate adaptation. Heat stress, floods, water scarcity and climate-resilient agriculture receive no scaled-up fiscal roadmap. Vibhuti of IEEFA points out that while support for decentralised renewables and bioenergy has increased, spending on transmission and energy storage has stagnated or declined—areas that are “not optional but indispensable” for a high-renewables grid.
The absence of strong EV demand-pull measures and limited risk-sharing instruments for private capital also signal unfinished business in India’s clean transition.
A Budget of Signals, Not Slogans
Budget 2026–27 is not a climate manifesto. Instead, it is a signal budget—one that rewires incentives, de-risks clean manufacturing, and treats decarbonisation as an economic strategy rather than a moral appeal. Its strength lies in industrial tools and fiscal realism; its weakness, in adaptation and social resilience.
Whether this quiet green turn translates into measurable emissions reductions and climate resilience will depend on execution, state capacity, and private investment. But one thing is clear: India’s clean-tech transition has now entered the core of its economic planning.
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