ADB Drops a (Green) Bombshell

“Climate Change to Cost East Asia 5.3% of GDP” cries Bloomberg. “ADB Forecasts Soaring Asian Energy Use Through 2035”, screams the Wall Street Journal. Headlines soar after the Asian Development Bank (ADB) released its 2013 ‘Economics of Climate Change in East Asia’.

The statistics look grim: atmospheric CO₂ concentration has just surpassed 400ppm. Responsible for 30% of world’s total emissions, East Asia expects a rise in temperature of around 1.9-2.6°C by 2050. Flooding, sea-level rise, intense tropical storms, drought, heatwaves - you name it – it’s about to visit. 

 Increase of Climate-Related Natural Disasters (1980-2010) in the PRC - it has already begun!

 Red Areas = East Asian Deltas = Flood-prone Areas

So what’s the point of this publication, other than to fuel the air of eventual doom? It provides strategies to adapt and mitigate climate change in three key sectors (infrastructure, coastal zones and agriculture), including the cost to the economy. The ADB urges East Asian countries to adopt an economic growth model based on low carbon emissions and a more efficient use of existing resources.

Among its suggestions are:

• Jumpstart a regional carbon market to lessen the cost of carbon reduction by 25% through dividends.
• Promote low-carbon technology and enforce technical standards to buildings in order to withstand environmental change.
• Support cost-effective measures: trucks fuelled by compressed natural gas, hybrid passenger cars, etc.

In the infrastructure sector, I think the concept of climate-proofing, or ex-ante (fancy word for ‘based on forecasts’) adaptation will become big: buildings will be designed to cope with future climate change. It’s basically being preventive rather than corrective.

Economically, it’s feasible: initial cost of investment + planned adaptation + operational and management costs < probable costs of replacing/maintaining structures not designed to cope with future climate change.

ADB urges the People’s Republic of China, for one, to climate-proof its roads before temperatures rise and tarmac melts. No kidding.

On a more positive note, “E. Asia needs less than 0.3 percent of GDP (over the years) to mitigate climate change” (and this is in the worst climate scenario), says Jakarta Post. 0.3 percent? I say that’s manageable.

Want the details? Check out the 216-page publication.

Reference:

Westphal, Michael, Gordon Hughes, and Jorn Brommelhorster, eds. "Economics of Climate Change in East Asia". Asian Development Bank.