Climate Change to Cost East Asia 5.3% of GDP, ADB Study Says

Climate change will lead to more flooding and drought in East Asia and could chop 5.3 percent off annual gross domestic product by the year 2100 if measures aren’t adopted to tackle it, according to the Asian Development Bank.

Rising temperatures in China, Japan, Mongolia and South Korea will spur more flooding and tropical storms in coastal areas and make northern agricultural regions more prone to drought, the ADB said today in its “Economics of Climate Change in East Asia” report.

The study underscores the risks of inaction on climate change faced by a region that was responsible for 30 percent of the world’s carbon emissions in 2010. China’s model of economic growth at all costs has made it the world’s biggest carbon emitter and has blanketed cities in smog that can surpass World Health Organization recommendations by almost 40 times.

“East Asia needs to shift toward a model of economic growth focused on low carbon emissions and more efficient use of resources,” the ADB said in the report. In China, “measures to reduce emissions of greenhouse gases should lead to significant improvements in local air quality, thus reducing the damage to the health of urban populations,” it said.

Current projections suggest that regional mean temperatures in 2090 will be 3.8 to 5.2 degrees Celsius higher than the 1961-1990 average, according to the report. The region is already vulnerable to once-every-hundred-years floods that could affect 12 million people in 23 cities, threatening $864 billion in assets, the report said.

Adaptation Costs

The ADB said that under a mid-range scenario, adapting infrastructure to climate change would cost the region $22.9 billion a year in 2005 dollars. Coastal protection would cost $4.2 billion a year and adapting agriculture would require $9.5 billion a year.

The costs of mitigating climate change are much lower than the damage that would be caused by doing nothing, Gordon Hughes, a professor at the University of Edinburgh and one of the authors of the report, said at a briefing today in Beijing. Roads are one of the most expensive sectors for adaptation as they are particularly susceptible to higher temperatures, he said.

“The question is, do we spend money today to reduce the damage done by climate change in 40 years time, or do we wait a bit and adapt in a slightly different way but in 20 or 30 years,” Hughes said. “That’s a very difficult trade off, but it’s a very important trade off that needs to be made.”

For China, adjustments to transport infrastructure could have “very large benefits” in reducing air pollution and improving people’s health, he said.

China’s Glaciers

Climate-related natural disasters since 1970 have already cost $259 billion to China, $64 billion to Japan, $15 billion to South Korea and $2 billion to Mongolia. That amounts to less than 0.2 percent of GDP over the period, the ADB said in its report.

China’s glaciers are “retreating markedly” due to global warming and the country has seen an increase in floods and droughts, Chen Wenying, a professor at Tsinghua University, said today at the briefing.

The Asian Development Bank said its study area didn’t include Hong Kong or Macau. Maps in the report also didn’t show data for Taiwan, the self-governed island that China considers part of its territory.

To contact Bloomberg News staff for this story: Nicholas Wadhams in Beijing at nwadhams@bloomberg.net; Henry Sanderson in Beijing at hsanderson@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net

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