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ADB Assesses Climate Change Costs in South Asia

ADB19 August 2014: The Asian Development Bank (ADB) has published a report, titled ‘Assessing the Costs of Climate Change and Adaptation in South Asia,' which predicts that by 2050, the collective economy of six countries - Bangladesh, Bhutan, India, Maldives, Nepal and Sri Lanka - will see an average annual economic loss of around 1.8% of GDP by 2050 that could rise to 8.8% in 2100 if the “world continues on its current fossil fuel-intensive path.”

The report is a “clear call for action to governments” as they negotiate a new climate regime, which is to be agreed in Paris in 2015. The report suggests that Maldives will be hardest hit in GDP loss, while Bangladesh, Bhutan, India, Nepal and Sri Lanka are projected to face 2.0%, 1.4%, 1.8%, 2.2% and 1.2% loss of annual GDP by 2050, respectively. Mahfuzuddin Ahmed, ADB Principal Climate Change Specialist, said adaptation measures, such as flood defenses and climate-proofed infrastructure, are essential to protect South Asia from the impacts climate change.

The report states that higher temperatures reduce crop yields while encouraging weed and pest proliferation, with precipitation changes increasing the likelihood of short-run crop failures and long-run production declines. The report also contends that: a rise in warming will increase energy requirements for space cooling while increasing energy demand for irrigation; an increased intensity and frequency of extreme events may lead to more electrical system failures; and the mortality rate, caused by dengue, malaria and diarrhea, would increase with warming. The report emphasizes that policy makers must take early action to adapt to climate risks informed by “rigorous and timely evidence.”

The report: synthesizes the results of country and sector studies on the economic costs and benefits of unilateral and regional climate change actions in the six countries; considers different scenarios and impacts projected across vulnerable sectors; and estimates total economic loss throughout the century and funding required to avoid such losses. The objective is to strengthen decision-making capacity and improve understanding of the economics of climate change.

Climate change impacts could cause annual economic losses of over 12% of GDP in the Maldives by the end of this century. Scaling up development of its solar energy potential is therefore suggested to reduce “near-total dependence” on imported fuel oil. In Bangladesh, the report notes that a rising gap between energy demand and supply could result in an annual adaptation costs of over US$89 million in the 2030s and US$363 million in the 2050s.

Other adaptation measures the different countries can take include: the use of drought-, flood- and saline-resistant crop varieties; more protection of groundwater resources; greater use of recycled water; crop and aquaculture diversification; more flood resistant infrastructure for riverbanks; raised earth beds for seasonal vegetable cultivation; and alternative livelihood options, including community-based fisheries and duck rearing. [ADB Report Website] [UNFCCC Press Release] [ADB Press Release on Maldives] [ADB Press Release on Bangladesh]