Climate change and economic growth

Asia faces water scarcity and climate change risks

Asia faces water scarcity and climate change risks

According to PwC China and India could be by 2050 the world’s top two largest economies in terms of purchasing power parity. In the shorter-term Singapore’s United Overseas Bank (UOB) projects that by 2025 the Association of Southeast Asian Nations (ASEAN), which includes Singapore, Indonesia, Thailand, the Philippines, Vietnam, Myanmar, Malaysia, Cambodia, Laos and Brunei, will have a combined economy larger than Japan’s.


However, with China being one of the world’s most water-scarce nations – it has 20% of the world’s population but only 7% of the world’s freshwater, India being highly vulnerable to climate change disasters risks to its economy and 3 out of 4 countries in the Asia-Pacific region currently facing water scarcity, the impacts of climate change will likely hinder projected economic growth due to a multitude of socio-economic risks.

Economic and social risks of climate change

Climate change extreme-weather events and temperature rises, which affect water resources quality and quantity, expose individuals, communities and countries to numerous socio-economic risks that include:


  • Energy and climate change                                                                                                       

Climate change is projected to increase demand for energy from cooling in residential and commercial sectors. Climate change is projected to affect energy sources and technologies differently depending on the resource used (e.g. water flow, wind, and insolation), technological processes (e.g. cooling) or locations (e.g. coastal areas, flood-plains) involved.


  • Global economy and climate change

Economic forecasts of the impacts of climate change vary depending on which economic sub-sectors are covered and whether they account for catastrophic changes and tipping points. Incomplete estimates of annual global economic losses for additional temperature increases of around 2°C are between 0.2 and 2% of global income. However, these losses are more likely to be greater than smaller. In addition, there are large variations in economic losses between, and within, countries and these losses are likely to accelerate with increased global warming.


  • Human security and climate change

Climate change in the 21st century is projected to increase the number of displaced people. The probability of displacement increases when populations lacking resources for planned migration experience higher exposures to extreme weather events. Climate change can increase the likelihood of conflicts by amplifying drivers of these conflicts such as poverty and economic shocks. Meanwhile, impacts of climate change on critical infrastructure and territorial integrity is expected to influence national security policies particularly when resources are shared across boundaries.


  •  Poverty and climate change

Climate change is projected to slow down economic growth, making poverty reduction more difficult, by prolonging existing and creating new poverty traps particularly in urban areas. Climate change impacts are expected to increase poverty and create new poverty-traps in countries with increasing economic inequality, in both developing and developed countries.

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Author: Robert C. Brears

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  1. Good points, and I like the mentioning of the 2C increase in temp by 2050- what really needs to be mentioned is that the 2C increase is actually the end of stable agricultural climate / beyond 2C is the beginning of runaway climate change and when the ice melting will really crank ( the clathrate gun theory) and permafrost global warming / runaway global warming of 2-5 % of GDP all the way to 2C and runaway global warming will be far more expensive than 2-5% of GDP – 2C increase is nothing to mention without explaining what it really means.

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