Asian economies at risk

9th September 2014


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IEMA

South Asian economies are set to decline significantly if the international community fails to halt global temperature rise at 2ºC, according to a report from the Asian Development Bank.

The bank predicts in the report that the collective economy of Bangladesh, Bhutan, India, the Maldives, Nepal and Sri Lanka will lose on average 1.8% of its annual gross domestic product by 2050, rising to 8.8% by 2100.

However, given the uncertainties of climate change, it warns that annual losses could be as high as 24%. The assessment, which is based on a temperature rise of 4.6ºC, forecasts that Nepal and the Maldives will be the hardest hit, with their respective economies declining by 12.6% and 9.9% every year by 2100.

On average, Bangladesh would lose 9.4%, India 8.7%, Bhutan 6.6%, and Sri Lanka 6.5%.

Economic losses are expected to be significant in key sectors, such as agriculture, which is described as extremely vulnerable to climate change. Higher temperatures will eventually reduce yields of desirable crops, explains the report.

Bangladesh, Bhutan, India, and Sri Lanka are projected to experience a decline in rice yield of as much as 23% by 2080, although it could increase by up to 16% in the colder hills and mountains of Nepal.

The region as a whole will need to spend at least $73 billion every year by 2100 to adapt to climate change, predicts the bank.

“Countries must respond individually and collectively to cope with rising sea levels, disrupted water, food, and energy supply and increased disease,” said Bindu Lohani, vice-president for knowledge management and sustainable development at the bank.

The impact of climate change in south Asia will depend largely on how the global community tackles the issue, however. Keeping the global temperature rise below 2°C would equate to reduction of 2.5% a year in the region’s economy by 2100.

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