Assessing the Macro-Economic Impacts of Climate Change: An Analysis of Flooding in the Brahmaputra Valley

The Brahmaputra Valley, a lifeline for millions in northeastern India, holds immense economic and cultural significance. Its fertile plains and abundant water resources support an agrarian economy, thereby stimulating the state’s fiscal revenue. However, climate change-induced flooding threatens this region’s economic stability and growth, thereby making it essential to understand the macroeconomic impacts of these environmental changes. Examining indicators like Gross Domestic Product (GDP), Consumer Price Index (CPI), expenditure on relief for natural calamities, Per Capita Income (PCI), and unemployment rates, reveals the broader economic repercussions. This paper employs a robust methodological framework, combining Integrated Assessment Models (IAMs) with newer panel data models and case study analyses to capture the complex dynamics of climate impacts on the Brahmaputra Valley’s economy. The decade-long analysis shows significant shift in Assam’s Gross State Domestic Product (GSDP), transitioning from an agriculture-centric economy to one increasingly oriented towards industry and services. Such a shift highlights the vulnerabilities of agricultural productivity amid escalating climate events. Accordingly, the research findings emphasize the need for strategic policy interventions, sustainable economic planning, and resilience-building. This study broadens the understanding of climate change’s macroeconomic impacts and offers practical insights for policy formulation and adaptation strategies in climate-vulnerable regions.