Climate Change Could Put $4.7 Trillion of Asia's Annual GDP at Risk by 2050
People living in poverty in South and Southeast Asia will be impacted the most.
Researchers found that South and Southeast Asian countries could face more severe consequences of climate change than other parts of the world if no action is taken. Between $2.8 trillion and $4.7 trillion (USD) of Asia’s annual GDP could be at risk by 2050, according to the study, primarily due to labor loss as a result of reduced outdoor working hours in the hotter and more humid climate of future decades.
“As Asia seeks to grow its economy — and remain a key source of growth for the world — climate is thus a critical challenge that the region will need to manage,” the researchers wrote in the report.
The study acknowledges that people living in poverty will be hit hardest by these climate hazards. Without action, countries in South and Southeast Asia will see 7% to 13% of their GDP at risk by 2050. This compares to less than 1% in wealthier countries such as Japan and South Korea.
Countries like India, Bangladesh, and Pakistan — which the report categorizes as “Frontier Asia” — will be among the first places in the world to regularly experience lethal heat waves, during which temperatures will be too high for humans to tolerate.
“We estimate that by 2050, between 500 million and 700 million people in Frontier Asia could live in regions that have an annual probability of a lethal heat wave of about 20%,” the researchers wrote.
Extreme heat has already been a big problem in India, which experienced its hottest decade in the past 10 years. In 2019, the country witnessed its longest and most intense heat wave in decades, with temperatures reaching 123 degrees Fahrenheit (51 degrees Celsius), killing at least 36 people.
Besides extreme heat, extreme precipitation is also expected to become more frequent. In some areas like Indonesia, these events could increase three- or four-fold by 2050, according to the report. Typhoons are another climate event that is expected to become more severe. In the coastal areas of China, South Korea, and Japan, the likelihood of severe typhoons could triple in the next two decades.
These impacts have already been taking shape. Since June, China has been dealing with the worst flooding in more than 20 years. The floods have displaced nearly 4 million people and caused 40,000 houses to collapse. The McKinsey study also points to the 2017 floods in China’s Hunan province that affected 7.8 million people and resulted in $3.55 billion of direct economic loss.
South Asia is also currently experiencing widespread flooding and deadly landslides. The UN reports that more than 4 million children are in urgent need of life-saving support in countries including Bangladesh, Bhutan, India, and Nepal.
By looking at the potential economic impact of climate change without mitigation and adaptation efforts, the study could help decision makers “understand the magnitude of the risk and the response needed,” according to the researchers.
The good news is that many parts of Asia have a lot of opportunity to develop sustainable and resilient infrastructure to deal with these potential risks.
“Infrastructure and urban areas are still being built out in many parts of Asia, which gives the region the chance to ensure that what goes up is more resilient and better able to withstand heightened risk,” the researchers wrote. “With concerted effort, Asian countries can help manage their own exposure to climate risk and can lead the way on global adaptation and mitigation efforts.”
Countries all over the world are experiencing higher temperatures and more extreme weather events. Just this weekend, California’s Death Valley hit one of the hottest air temperatures ever recorded and Greenland’s ice cap melted past the point of no return.
Policymakers and business leaders in Asia and beyond will need to ultimately lower greenhouse gas emissions to avoid accelerating climate risks and their inevitable socioeconomic impacts.