Bank warns that climate change will severely restrict economic growth in south Asia

20th August 2014

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  • Mitigation ,
  • Adaptation



Climate change will "slash" up to 9% off the south Asian economy every year by the end of the century, and the human and financial toll could be even higher if the damage from floods, droughts, and other extreme weather events is included, according to a report by the Asia Development Bank (ADB).

Based on an assumed 4.6°C rise in global temperatures, the ADB report predicts that the collective economy of Bangladesh, Bhutan, India, the Maldives, Nepal and Sri Lanka will lose an average 1.8% of its annual gross domestic product by 2050, rising to 8.8% by 2100. It warns, however, that, given the uncertainties of climate change, losses could be as high as 24% a year.

Economic losses are expected to be significant in key sectors – such as agriculture, energy, transport, health, water, coastal and marine, and tourism – because of “accentuated risks” posed by global climate change, says the report. A 1-metre rise in sea levels would directly affect 95 million people in coastal regions, with a further 100 million affected during storm surges. Changes in rainfall patterns will have a direct impact on agriculture and make it harder to meet energy and water needs, with additional impacts on human health from dengue and diarrhoea and other diseases.

“South Asia’s economy is under serious threat and the lives and livelihoods of millions of south Asians inhabiting the region’s many mountains, deltas and atolls are on a knife edge,” said Bindu Lohani, ADB vice-president for knowledge management and sustainable development. “Countries must respond individually and collectively to cope with rising sea levels, disrupted water, food, and energy supply and increased disease.”

The report predicts that Nepal and the Maldives will be the hardest hit, losing up to 12.6% and 9.9% of their economies, respectively, every year by 2100. On average, Bangladesh would lose 9.4%, India 8.7%, Bhutan 6.6%, and Sri Lanka 6.5% of their economies. The region as a whole will need to spend at least $73 billion every year between now and 2100 to adapt to climate change.

But the report also says that south Asia’s economy would only be reduced by 1.3% annually by 2050 and 2.5% by 2100 if the world community acts together to keep the rise of global temperatures below 2°C by 2050.


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