Climate change to put APAC GDP on thin ice with 41% melt by 2100

India alone could face 24.7% loss in GDP by 2070

Climate change could reduce developing Asia and the Pacific’s gross domestic product (GDP) by 17 per cent by 2070 and as much as 41 per cent by 2100 under high-end greenhouse gas emissions, according to an Asian Development Bank (ADB) report.

 

India alone could face a 24.7 per cent loss in GDP by 2070, with neighbouring countries like Bangladesh (minus 30.5 per cent), Vietnam (minus 30.2 per cent), and Indonesia (minus 26.8 per cent) seeing even steeper declines.

 

The Asia-Pacific (APAC) Climate Report 2024, released Thursday, warns of accelerating climate-related GDP losses, particularly between 2050 and 2070, driven by rising sea levels and declining labour productivity. Lower-income and fragile economies face the greatest risks, with up to 300 million people threatened by coastal flooding and trillions in coastal assets potentially damaged annually by 2070 if the crisis persists.

 

As climate change accelerates, India is poised to suffer losses far exceeding the regional average. While labour productivity losses are projected to cost the APAC region 4.9 per cent of GDP, India could see an 11.6 per cent decline.

 

Cooling demands may reduce regional GDP by 3.3 per cent, but for India, this figure could reach 5.1 per cent. River flooding also threatens to shrink India’s GDP by around 4 per cent, underscoring its heightened vulnerability to climate impact.

 

“Climate change has supercharged the devastation from tropical storms, heatwaves, and floods in the region, contributing to unprecedented economic challenges and human suffering,” said ADB President Masatsugu Asakawa.

 

ADB is a regional development bank founded in 1966 to promote economic growth and reduce poverty in Asia by providing loans, technical assistance, and grants for projects in infrastructure, education, health care, and climate change. It is owned by 69 members — 49 from the region.

 

Long-term climate damages are set to hit the largest economies hardest, with affected populations heavily concentrated in China, India, Bangladesh, and Vietnam. Populations impacted by rising sea levels could treble by 2050, reaching over 50 million people annually by 2070. Annual damages are projected to soar to a median of $3 trillion by 2070, with India alone facing expected damages exceeding $1,200 billion under high-emission scenarios.

 

Intensified rainfall and extreme storms are expected to drive up landslides and floods, especially in mountainous regions like the India-China border, where landslides may rise by 30-70 per cent under severe warming.

 

By 2070, annual riverine flooding could cause $1.3 trillion in damages across the APAC, impacting over 110 million people. India faces the highest projected losses, with residential damages exceeding $400 billion and commercial losses over $700 billion annually, the report highlights.

 

Climate change is projected to reduce forest productivity across the APAC, with the Global Forest Model (G4M) indicating decreases of 10-30 per cent by 2070 under high-emission scenarios. India, with losses exceeding 25 per cent, is among the most affected, along with Vietnam and Southeast Asia, which show marked declines. Only select regions, such as China and Central Asia, may see losses under 5 per cent, highlighting India’s vulnerability to climate impacts on forest ecosystems.

 

Room for improvement

 

The report states that developing Asia has room to strengthen its net-zero targets, with 36 of 44 economies setting goals for zero greenhouse gas emissions — 28 aiming for 2050, while China and India target 2060 and 2070, respectively.

 

Only four countries have legally enshrined these targets, with most lacking detailed plans. In comparison, 32 of 38 Organization for Economic Co-operation and Development economies have net-zero goals, with 23 legally committed and many aiming for 2050.

 

To enhance its climate ambitions, developing Asia requires clearer policies and increased financing support, with institutions like ADB poised to assist in achieving these goals. The report emphasises the need to accelerate adaptation responses to tackle escalating climate risks and scale up adaptation-focused climate finance.

 

The report estimates annual investment needs for regional countries to adapt to global warming at between $102 billion and $431 billion — far exceeding the $34 billion of tracked adaptation finance in the region from 2021 to 2022. Government regulation reforms and enhanced recognition of climate risks are helping attract new sources of private climate capital, but far greater private investment flows are needed.

 

On the mitigation front, the report shows the region is well-placed to embrace renewable energy in driving a transition to net zero, and that forging ahead with domestic and international carbon markets can help achieve climate action goals cost-effectively.

 

“Urgent, well-coordinated climate action that addresses these impacts is needed before it is too late. This climate report provides insight into how to finance urgent adaptation needs and offers promising policy recommendations to governments in our developing member countries on how to reduce greenhouse gas emissions at the lowest cost,” Asakawa said. 

Counting the Cost

- Rising sea levels, heat, and floods pose top serious threats

- India’s GDP at risk of 11.6 per cent loss from labour impacts

- Cooling needs may trim India’s GDP by 5.1 per cent.

- India’s flood losses could exceed $1,100 billion annually

- Forest productivity in India may drop by over 25 per cent

- Asia-Pacific needs $102–431 billion for climate adaptation annually