The Asia-Pacific Climate Report 2024 released by the Asian Development Bank (ADB) underscores the urgent need for climate action in one of the world’s most vulnerable regions to climate change. The report highlights the severe economic impacts, challenges, and necessary actions that must be undertaken to mitigate the disastrous effects of global warming. The Asia-Pacific (APAC) region, home to more than 60% of the world’s population, faces some of the gravest consequences if climate action is delayed. The projections presented in this report reflect the staggering extent of potential economic loss, environmental degradation, and societal impacts if current greenhouse gas (GHG) emissions continue unabated.
Economic Impacts of Climate Change in the Asia-Pacific Region
The report outlines how high-end greenhouse gas emissions could lead to significant economic losses across the Asia-Pacific region. Under a high-emission scenario, the region could face a 17% reduction in GDP by 2070. This figure could escalate to a 41% decline by 2100, making it clear that the economic toll of climate inaction will only increase over time.
- India, a major player in the APAC economy, is projected to witness a 24.7% decline in its GDP by 2070. Neighboring countries like Bangladesh face even more significant losses, with an estimated 30.5% reduction, while Vietnam could see its GDP drop by 30.2%, and Indonesia may experience a 26.8% decline. These figures highlight the broad regional vulnerability to climate change, where both developed and developing nations will face unprecedented economic challenges.
- A major factor contributing to these economic losses is the rise in sea levels. As global temperatures continue to increase, up to 300 million people in the Asia-Pacific region could be at risk of coastal flooding by 2070. This widespread displacement and infrastructure damage could result in annual damages reaching USD 3 trillion by 2070. The sheer scale of these impacts will be felt not only by governments but also by local communities and industries, further straining national economies.
- Another critical issue outlined in the report is the impact of climate change on labour productivity. Rising temperatures and extreme weather events will reduce the ability of workers to maintain their productivity, particularly in outdoor environments. The report predicts that the APAC region could experience a 4.9% GDP loss due to decreased labour productivity, with India facing a higher reduction of 11.6%. This loss will disproportionately affect low-income workers and countries that rely heavily on agricultural and manufacturing sectors.
Additionally, the rising demand for cooling due to increasing temperatures will contribute to further economic strain. The region could see a 3.3% GDP loss due to the growing demand for cooling, with India facing a sharper decline of 5.1%. As more energy is required for cooling, this will place a heavier burden on energy infrastructures and potentially increase dependence on fossil fuels, creating a vicious cycle of increased emissions and worsening climate impacts.
Natural Disasters and Climate Change
The Asia-Pacific region is already highly prone to natural disasters, and climate change will exacerbate these risks. The report highlights the increasing likelihood of riverine flooding, which is expected to cause damages exceeding USD 1.3 trillion annually across the region by 2070. More than 110 million people could be directly affected by these floods, disrupting livelihoods, homes, and agricultural productivity.
- India is expected to bear some of the highest costs, with residential damages exceeding USD 400 billion and commercial damages surpassing USD 700 billion. The consequences of flooding will be particularly severe in densely populated and low-lying areas, where infrastructure is already vulnerable.
- Tropical storms and increased rainfall will compound these risks. The intensity and frequency of tropical storms are expected to increase, leading to worse floods and landslides, particularly in mountainous regions like the India-China border, where the incidence of landslides may increase by 30-70% under a high-emission scenario. These events will further degrade the region’s fragile ecosystems and place greater pressure on disaster preparedness systems.
The impacts of climate change extend beyond the immediate destruction caused by natural disasters. The report also projects significant declines in forest productivity across the Asia-Pacific region. Under high-emission scenarios, the productivity of forests could decrease by 10-30% by 2070. India is among the countries facing the most severe losses, with forest productivity expected to drop by over 25%, alongside Vietnam and Southeast Asia. In contrast, regions such as China and Central Asia may see more moderate losses, with forest productivity declines expected to remain below 5%.
Gaps in Climate Targets and the Need for Action
While 36 out of 44 economies in Asia have set net-zero emission targets, the report notes that only four countries have legally enshrined these targets, and many lack the detailed policies needed to achieve them. India and China, two of the region’s largest emitters, aim for net-zero by 2070 and 2060, respectively, which places them behind many OECD economies. OECD nations are largely aiming for net-zero by 2050, with 23 out of 38 countries legally committing to these targets.
The report stresses the need for developing Asia to enhance its climate ambitions by establishing clearer policies and mobilizing increased financial support. Developing countries in Asia face a significant challenge in balancing economic growth with climate action. The Asian Development Bank and other institutions must play a pivotal role in providing the necessary financial and technical support to help these countries achieve their climate targets.
Gaps in Climate Finance: A Critical Need for Adaptation
One of the most pressing challenges outlined in the report is the financial gap for climate adaptation. The Asia-Pacific region needs between USD 102 billion and USD 431 billion annually to meet its climate adaptation goals, far exceeding the USD 34 billion tracked between 2021 and 2022. The report underscores the importance of private sector investment in closing this gap. Greater private investment is essential, alongside improved policy frameworks to attract climate finance.
The report calls for enhanced recognition of climate risks by both the public and private sectors, alongside regulatory reforms that can help unlock private investment. This includes developing a clearer understanding of the financial risks associated with climate change and creating the appropriate incentives to encourage the private sector to invest in adaptation measures.
The Role of the Asian Development Bank
The Asian Development Bank plays a crucial role in supporting the Asia-Pacific region’s climate goals. Established in 1966, the ADB aims to promote economic growth and reduce poverty through loans, technical assistance, and grants for infrastructure, education, health care, and climate change projects. As of 2024, India remains the fourth-largest shareholder of the ADB and the bank’s top borrower since 2010.
The ADB is committed to supporting climate resilience and adaptation measures across Asia. Its headquarters in Manila, Philippines, serves as the central hub for coordinating development efforts and driving the region’s transition to sustainable energy and climate resilience.
The Asia-Pacific Climate Report 2024 identifies carbon pricing as a critical policy tool for achieving cost-effective emissions reductions. Carbon pricing mechanisms, including fossil fuel subsidy reforms and emissions trading systems (ETS), can incentivize businesses and consumers to adopt low-carbon alternatives. The report stresses that fossil fuel subsidies act as negative carbon prices and should be phased out, redirecting support to clean energy initiatives.