Climate change could wipe 25% off India’s economy by 2070

Continued climate change could lead to a 16.9% loss in GDP by 2070 across the Asia-Pacific region, with India projected to suffer a 24.7% GDP loss, according to a new report from the Asian Development Bank (ADB).

The most significant losses will be caused by rising sea levels and decreasing labour productivity, with lower-income and fragile economies being hit the hardest, it said. The new research, presented in the first issue of the ADB’s ‘Asia-Pacific Climate Report’, details a series of damaging weather impacts threatening the region.

It says that if the climate crisis continues to accelerate, up to 300 million people in the region could be at risk from flooding, and trillions of dollars’ worth of coastal assets could face annual damage by 2070.

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

Urgent, well-coordinated climate action addressing these impacts is necessary before it is too late, he said.

He said the ADB’s climate report provides insights into financing urgent adaptation needs and “offers policy recommendations to governments in our developing member countries on how to reduce greenhouse gas emissions at the lowest cost”.

By 2070, climate change under a high-end emissions scenario could cause a total loss of 16.9% of GDP across the Asia-Pacific region. Most of the region would face more than 20% loss.

Among the assessed countries and sub-regions, these losses are concentrated in Bangladesh (30.5%), India (24.7%), the rest of South-east Asia (23.4%), higher-income South-east Asia (22%), Pakistan (21.1%), the Pacific (18.6%) and the Philippines (18.1%), the report said.

It said that developing Asia has accounted for most of the increase in global GHG emissions since 2000. While advanced economies were major GHG emitters throughout the 20th century, emissions from developing Asia have risen more rapidly than those from any other region in the first two decades of the 21st century.

Consequently, the region’s share of global emissions rose from 29.4% in 2000 to 45.9% in 2021. “Emissions from developing Asia continue to rise, driven primarily by China, which contributed about 30% of global emissions in 2021”, the ADB report said.

The report pointed out that the region is home to 60% of the world’s population, with per capita emissions still below the global average.

Intensified and more variable rainfall, along with increasingly extreme storms, will lead to more frequent landslides and floods in the region, it said.

This will be most pronounced in mountainous, such as the border area of India and China, where landslides may increase by between 30% and 70%, with 4.7 degrees Celsius of mean global warming.

Leading models indicate that trillions of dollars in annual capital damage from riverine flooding could occur in Asia and the Pacific by 2070. Expected annual damage, in line with economic growth, may reach $1.3 trillion per year by 2070, affecting over 110 million people annually.

“India is reported to have the highest number of affected individuals and damage costs, with residential losses being predominant,” the report said.

The GDP loss in 2070 from reduced labour productivity is estimated to be 4.9% for the region, with tropical and subtropical locations being the most impacted. These include the rest of South-east Asia (11.9%), India (11.6%), Pakistan (10.4%) and Vietnam (8.%5).

The ADB said spending “must be increased to limit long-term losses, while adaptation must be accelerated to address impacts that will not be avoided. Annual investment needs for climate change adaptation by regional countries are estimated between $102 billion and $431 billion – far more than the approximate $34 billion of adaptation finance mobilized in the region in 2021-2022.”