Odisha Shows the Economic Cost of Hidden Climate Losses

Driving about 10 km out of the coastal town of Puri, coconut trees begin lining both sides of the highway to Odisha’s capital Bhubaneswar. Rows after rows of green canopies extend into the blurry horizon. But some groves have gaps while others are a bit scattered, as if the missing trees have been plucked out.

This is the legacy of the devastating cyclone Fani, which hit Odisha in 2019, uprooting around 14 lakh coconut trees, and driving the coconut and related coir industries into the ground overnight. All areas around Sakhigopal, Odisha’s coconut growing hub and about 20 km inland from the sea, was brought to its knees.

Over the past seven years, the coconut industry has somehow revived. The coconut sellers are back on the sides of the highway, with their green, oval shaped wares. But it is not the same anymore. The coconuts’ taste, size, and water volume have all decreased, according to five coconut sellers that CarbonCopy spoke to.
Coconut seller on the Puri-Bhubaneswar highway. Photo: Shaswata Kundu Chaudhuri

These are all non-economic loss and damages, as they affect the quality of the coconut. But this, in turn, has affected the marketability of the coconut, as its value decreased, affecting thousands of coconut farmers and sellers. 

This is a prime example of how non-economic loss and damage leads to economic loss and damage. 

Surviving Fani

“80% of the coconut trees were damaged by Fani. The surviving trees are shorter in size, as are the coconuts. The taste is also not as sweet,” said 34-year-old Dhananjay Sahoo, a resident of Sakhigopal, who has native coconut trees in his backyard.

According to him, the native species grew to about 50-60 feet in height earlier, but nowadays, the coconut trees grown on the farms reach a maximum of 20 feet. 

Dr Sujit Kumar Sahoo, a scientist working with the department of Forest and Environment, Government of Odisha, confirmed this. “After the cyclone, the characteristics of the coconut changed. It went through a deformation process. Both its quality and value decreased, its sweetness decreased, and some infestation also happened,” he said. 

This reporter evidenced this infestation firsthand — which turned the smooth green coconut exterior into white or brownish, decaying, crackled husk.

It is the coconut mite — microscopic pests which can cause severe damage to young coconuts, reducing the yield by up to 60%. It is known as Aceria guerreronis Keifer, but locals call it ‘jadoo’. 

Dijia Behera, a 55-year-old coconut seller told CarbonCopy that the mite infestation started after Cyclone Fani. Coconut production from a single tree fell by around 60-70% as well as a fallout. 

This was confirmed by the other coconut seller, as well as a personnel at the Sakhigopal RMC (Regulated Market Committee). With 98 licensed traders now, it is a dedicated market for coconut trading in the eastern state. Before Fani, however, there were close to 150 traders, according to Subhas Kumar Bhanja, a 50-year-old coconut trader.

Traders at the Sakhigopal RMC. Photo: Shaswata Kundu Chaudhuri

“With production decreasing, there are less coconuts to trade, and naturally, our exports have been hit. That is why a lot of traders left the business,” he said. “We used to receive 4-5 trucks a day, carrying 20 tonnes of coconuts each, in a day. Now, we receive 1-2 trucks.”

The native coconut crop — the East Coast Tall (ECT) variety — was damaged and infected. For replanting, dwarf and hybrid varieties were favoured as a strategic mitigation against recurring impact of high-velocity winds and storm surges. This impacted the coconut yield, which also influenced the changes in the fruit itself.

Dwarf and native variety of coconut trees. Photo: Shaswata Kundu Chaudhuri

The cyclone created fertile grounds for the mite to wreak havoc on the coconut crop. Tall trees with their protective, towering canopies were uprooted, and winds reaching up to 230 km/hr blew across the state. 

Wind is the primary vector for coconut mite, spreading it across the coconut growing areas. Groves that historically were never infested were also affected as a result. Also, the disruption of dense vegetation, destruction of protective canopies, and physical damage to surviving trees made it easier for the mites to attack the plant.

Compensation for uprooted and damaged coconut trees was pegged at ₹1,600 per tree, and up to 25 trees per farmer, in the immediate aftermath of the cyclone. But there has been no compensation for the loss in quality incurred by the farmers for the surviving trees, and the new trees which grew later.

Due to the ‘jadoo’ infestation, farmers pluck the coconuts at a younger stage before the green husk starts turning brown. In a lot of scenarios, they don’t wait for the coconuts to ripen also, according to Dhananjay Sahoo. So, the coconuts being sold on the market are smaller in size and have less water quotient, thereby being economically less valuable.

This intangible effect of the cyclone, intensified by climate change, spills over to the economic market, but does not have the usual protections like insurance or price adjustments.

Coconut farm in Sakhigopal, Odisha. Photo: Shaswata Kundu Chaudhuri

Uninsurable

“Cyclone risk can be covered through both traditional indemnity insurance and parametric insurance. Traditional insurance responds to actual loss suffered, whereas parametric insurance responds when a pre-agreed trigger, such as when wind speed crosses a defined threshold,” said Pankaj Tomar of AXA Climate. 

The key point here is that insurance payouts are applicable if a business or farmer’s revenue is due to the cyclone, he explained. Coconut farmers who lost hundreds of trees as a direct result of the cyclone would have received payouts if they were insured. But a downgrade in the quality of fruit years after the cyclone, which led to its decreased value, cannot be attributed to the cyclone. Therefore, the non-economic loss and damage is non-insurable, say experts.

A similar event unfolded towards the west of Sakhigopal, in the fishing village of Sanpatna. Situated on the banks of the mighty 1,100 sq km Chilika Lake, it is home to around 340 families. 

Recurrent cyclones caused damage to the mouth of the lagoon, and brought sediment into their fishing grounds. “These silt deposits decreased the water level where we fish, and changed the route of the lagoon. Now, there is less fish,” said 73-year-old Sikethro Mongo, who has not faced such dire circumstances in his six decade career.

Water levels have reduced in some parts of the Chilika Lake due to siltation. Photo: Shaswata Kundu Chaudhuri

There are immediate fallouts. The volume of fish has declined, so more fisherfolk are competing for less fish. For people who have spent decades on these waters, the lagoon has lost its familiar rhythm. The water has become unpredictable, and the ancestral currents that once guided the local fleet have largely vanished. 

The economic fallout of this cognitive loss is less immediate. 

Navigating the lake now requires longer hours on the water and significantly higher fuel consumption to locate the fish that used to gather predictably near the shore. What began as a loss of environmental intuition has transformed into a high operational cost that many families can no longer sustain. 

Other fishers in Sanpatna depend on marine catch. Ten years ago, fish were available around 70 km out to sea, said three fisherfolk. Now, they have to travel 200 km, while diesel consumption has jumped from 100 litres to 150 litres. 

Their earnings have also dropped. Earlier, a fishing trip brought home around 2 tonnes of fish, fetching about ₹2000. Now, they hardly get half a tonne of fish, plummeting earnings to ₹500. 

A fishing village in the Konark district of Odisha. Photo: Shaswata Kundu Chaudhuri

In this situation, the fishers would have been eligible for an insurance payout if a cyclone caused direct damage to their boat or equipment, which hampers their revenue.

But altered fishing conditions due to climate change hampering their revenue does not qualify. “If longer travel for fishing has become a persistent and expected condition, it is no longer an uncertain event in the conventional insurance sense. Insurance responds to uncertainty, not to structural certainty,” explained Tomar.

Parallely, high-value species, such as the premium mud crab and specific varieties of mullet, cannot thrive in these altered conditions. They are being replaced by smaller, less commercially viable fish. The result is a direct hit to the regional economy. High-value exports are disappearing, while the smaller fish that now dominate the nets fetch only a fraction of the price.

Also, the loss of traditional ecological knowledge is a quintessential non-economic damage. For generations, the ability to read the tides was a form of cultural capital, but as climate change shifts the lagoon’s salinity and disrupts the monsoon cycle, that inherited wisdom is becoming obsolete. 

Again, this does not qualify for insurance coverage.

“If it is intangible, how will you price it?” said Tomar. “Unless there is a credible and accepted framework to assign financial value, it becomes extremely difficult for insurance markets to underwrite and price that risk.” 

An invisible loss 

What the coconut farmers and fisherfolk in Odisha are experiencing is not captured by existing systems. The international community has begun to discuss Loss and Damage funds, but these are largely designed to address the hard losses: a house leveled by a flood, a bridge washed away, or a boat smashed by a storm. These are quantifiable events that fit neatly into an insurance ledger.

There is no standardised mechanism to compensate for the loss of a coconut’s sweetness or the erosion of a fisherman’s ability to predict the tide. Nor is there accountability.

In such situations, the real challenge lies in identifying the party with a clear insurable interest in the loss, according to Tomar.

In simpler terms, who will pay the premiums? 

“Insurance can respond better to sudden events than to slow-moving structural change. That is why acute risks are more insurable than chronic ones. Long term sea-level rise is a chronic and progressive risk rather than a sudden, fortuitous event. In such cases, the challenge is not only technical pricing, but also long-term affordability and identifying who will fund that protection over time,” said Tomar.

Beyond insurance, there are limited alternatives. Senior environmental journalist Joydeep Gupta points to welfare-based approaches. “There are schemes which can substitute monetary mechanisms. One example is the Kerala government’s scheme to provide free education to fishers’ children. An urgent need is for public health facilities at all levels (primary, secondary and tertiary) throughout the country to officially recognise and provide for treatment of climate change impacts on physical and mental health.”

According to him, such losses are not yet accounted for in policy, with costs borne directly by individuals.

But how can one assign a price tag to such issues? “It needs to be done through valuation techniques developed in the disciplines of environmental economics and health economics. This is desirable, because it will provide policymakers with monetary figures they can assign to projects that aim to deal with these losses,” said Gupta, India Lead at Earth Journalism Network, which has conducted training workshops on non-economic loss and damage.

This policy gap creates a hidden burden. Because these losses are not formally counted, they are absorbed by communities. Over time, they translate into declining incomes, rising costs, and increasing vulnerability.

As climate change intensifies, the boundary between the intangible and the tangible is dissolving. 

The intangible losses of today—the decline in biodiversity, the shift in soil health, and the loss of traditional skills—are the primary drivers of the poverty cycles of tomorrow. Without a policy shift that recognises these invisible damages, marginal communities will continue to pay a hidden tax for a changing climate long after the wreckage of the last storm has been cleared.

Read Part 1 and Part 2