Bangkok The sun burns on the skin, breathing is difficult: Due to the extreme heat, Thailand’s authorities have asked the population in the past few days not to go outside if possible. The health risks are too great given the record temperatures of more than 45 degrees Celsius.
The heat wave that swept across large parts of Asia this April also set a new temperature record in neighboring Laos. In China, more than 100 weather stations reported higher values than ever before. At least 14 people died from the heat at an event in the Indian metropolis of Mumbai.
The extreme weather, which meteorologists believe is a clear consequence of climate change, also has noticeable economic consequences: Refugee in air-conditioned rooms led to a drastic increase in the demand for electricity in several countries.
As a result, there were widespread power outages in Bangladesh, which also affected the textile industry, which is important for the country. In Thailand, electricity consumption rose to a new high. The government in Bangkok is responding with a $320 million relief package intended to cushion high household electricity bills.
Economists at the Asian Development Bank (ADB) are now warning that the economic damage caused by the climate crisis in Asia’s emerging countries could increase to dramatic proportions in the future: According to a study published by the organization on Thursday, losses from climate change in the region threaten by the end of the century 24 percent of economic output to grow. While China could get off comparatively lightly with a minus of eight percent, India was hit particularly hard with damage amounting to 35 percent of gross domestic product.
Asia’s share of global emissions has doubled
David Raitzer, one of the authors of the study, estimates that the economic damage for Asia’s emerging markets could be twice as high as the global average in the scenario with persistently high greenhouse gas emissions. “The losses are substantially higher than those that developed economies can expect,” he said at the presentation of the report.
The annual damage, for example from natural disasters such as floods, would correspond to around 16 percent of economic output in half a century.
(Photo: IMAGO/Hindustan Times)
Earlier studies had already forecast massive economic damage for the region. A model calculation published a year and a half ago by the consulting firm Deloitte put the potential losses for Southeast Asia at $28 trillion by 2070.
The annual damage, for example from natural disasters such as floods, would correspond to around 16 percent of economic output in half a century. This figure is roughly in line with the discounts that ADB economists expect for Southeast Asia over the next five decades.
Previously, the bank’s expected losses were lower in the same scenario. The authors of the study explain that the analyzes of the shocks in individual sectors have now become more precise.
Their study underscores the essential importance that Asia has with regard to climate change: on the one hand as one of the main victims – the continent is home to 70 percent of the population vulnerable to sea-level rise – and on the other hand as the main cause of climate-damaging gases. According to the ADB, the share of emerging Asian countries in global emissions has doubled from 22 percent in 1990 to 44 percent most recently. The three largest emerging countries on the continent alone – China, India and Indonesia – account for a third of global greenhouse gas emissions.
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Business in the region is particularly harmful to the climate: the CO2 intensity of Asia’s economies, i.e. the emissions in relation to the generated gross domestic product, is more than 40 percent higher than in the rest of the world – and twice as high as in Europe.
The ADB data show that important climate goals cannot be achieved without a stronger commitment from Asia: With emissions at the current level, the continent would single-handedly ensure that the 1.5-degree target would already fail by 2040, it says Report that presents the region’s previous climate commitments as not ambitious enough. Asia’s governments still have “a lot of room to accelerate decarbonization”.
$700 billion in annual investment required
However, Asia’s emerging countries are facing a financial feat. The transformation of the energy supply alone requires hundreds of billions of dollars in additional investments every year, said ADB chief economist Albert Park.
The resort to air-conditioned rooms has led to a drastic increase in the demand for electricity in several countries.
(Photo: Bloomberg)
In order to achieve the goals of the Paris climate agreement, such as limiting the increase in global average temperature or reducing emissions, Asia’s emerging countries would have to spend an average of more than 700 billion dollars a year by 2050. However, this would also be accompanied by great business opportunities: According to the ADB study, implementing the Paris goals in Asia would result in 345 billion dollars per year flowing into the renewable energy sector – more than 280 billion dollars would go to the expansion of power grids and storage capacities.
The bank’s economists also expect a boost for the labor market: The determined fight against climate change would create 2.9 million new jobs in the Asian emerging countries – above all in the manufacture, installation and operation of solar and wind power plants. In contrast, 1.4 million jobs would be lost in the fossil energy sector.
The ADB sees governments as having a duty to strike a balance between the winners and losers of the energy transition. Overall, however, the organization’s economists see immense advantages in a resolute climate policy.
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The positive effects – primarily the avoidance of climate damage – are five times higher in Asia than the costs caused by climate protection. The quality of life could improve significantly in the short term: moving away from fossil fuels reduces air pollution, which is causing major Asian cities to rise particularly sharply. Economists estimate that 350,000 deaths could be avoided every year by 2030.
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