We do not provide projections or deterministic forecasts, but rather assess risk. Ecological disasters have increased. 1For our analysis in this report, we look at 16 countries that account collectively for about 95% of Asia's population and GDP: Australia, Bangladesh, Cambodia, China, India, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, Pakistan, Philippines, South Korea, Thailand, and Vietnam. All we have to do is let Earth be. Laborde (2011) has also highlighted the impact of climate change on agriculture in South Asia. This could be done in a number of ways. Key strategies to reduce emissions in this sector include promoting a shift from a diet rich in animal protein to plant-based protein, improving farming practices (such as dry direct seeding, improved rice paddy water management, and improved fertilization of rice), and promoting sustainable forestry (ending deforestation and scaling reforestation). We often report results as relative measures, compared with a baseline of population, physical capital stock, or GDP in the areas affected by the hazard in question. A separate geospatial assessment examines six indicators to assess potential socioeconomic impact in 16 countries: Australia, Bangladesh, Cambodia, China, India, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, Pakistan, the Philippines, Thailand, Vietnam, and South Korea. Collectively, these 16 countries make up 54% of global population and one-third of global GDP. See also Christopher R. Schwalm, Spencer Glendon, and Philip B. Duffy, RCP8.5 tracks cumulative CO2 emissions, Proceedings of the National Academy of Sciences, August 2020. The industrial sector is the largest greenhouse gas emitter in Asia, accounting for more than 35 percent of the regions annual CO2 emissions. This outlook is based on contributions from hundreds of McKinsey experts from around the world, from fields including oil and gas, automotive, renewable energy, and basic materials. Today on World Environment Day, we are sharing the winning entries: Category: "The role of woman in the sustainable use of . Climate intervention: an option for Global South to reduce near-term climate risk. Public / private partnerships are critical to enable effective risk management and resilience building initiatives. Climate change will also worsen a range of risks to the Great Lakes. Details of the measures include the following: Adaptation measures cannot be successful without understanding and tracking intensifying climate risk. Assets and infrastructure services could increasingly come under threat from climate hazards such as floods in Tokyo and wildfires in Australia. The biome refers to the naturally occurring community of flora and fauna inhabiting a particular region. People living in Asia-Pacific have to learn to cope with extreme weather. This paper explores available data on the observed and projected linkages between climate change and health in the Asia-Pacific region. 1Flooded area considered for grids with depth greater than 0.01. These industries are also at risk from multiple hazards; for example, Indian agriculture may be hit not only by lost hours from extreme heat and humidity but by potential yield declines as well. While electrification is the most promising decarbonization measure for road transportation, decarbonizing buildings would also help overall mitigation efforts. Finally, about $1.2 trillion in capital stock in Asia is expected to be damaged by riverine flooding in a given year by 2050, equivalent to about 75 percent of the global impact. Special Unit for South-South Cooperation, Kuala Lumpur, Malaysia, UNDP. For the purposes of this cross-country analysis, we combine the categories of physical assets and infrastructure services. In India, we find that effectively 30 percent of annual daylight hours may be lost by 2050in climate-exposed regions, an increase of more than 40 percent from today. China is climatically heterogeneous due to its location on a wide range of latitudes. UNICEF South Asia. McKinsey Global Energy Perspective 2019: Reference case, McKinsey Energy Insights, 2019; Emissions Database for Global Atmospheric Research, 2015; FAOSTAT, FAO, 2015. 2We define a lethal heat wave as a 3-day period with maximum daily wet-bulb temperatures exceeding 34C wet-bulb. How does climate change affect Asia and the Pacific and its people? In the Ladakh region of India, which relies on melting snow and ice from the Himalayas to irrigate its fields, as glaciers have shrunk, water supplies have declined. Since the purpose of this report is to understand the physical risks and disruptive impacts of climate change, there are many areas that we do not address: One of the main challenges in understanding the physical risk arising from climate change is the range of uncertainties involved. For natural capital, the share of todays land area projected to experience biome shifts by 2050 is 40 percent for Asia, slightly less than the 45 percent global average. Advanced Asia consists of Australia, Japan, New Zealand, and South Korea. Scientists predict that by the end of this century the sea level could rise by65cm (2.1ft). While a shift to renewables is under way, challenges remain to decommission coal plants while meeting growing power demand. Our inventory of sustainable solutions continues to develop, including our Biodiversity and Ecosystem Services Index, which helps to identify vulnerable areas, but we need more joint public-private research partnerships for better diagnosis and management of the multi-dimensionality of climate risks. In this context, the compound flood event is defined as the flood extent caused by the 1-in-100-year rainfall, streamflow, and storm surge events occurring simultaneously. Governments can leverage loans or guarantees to encourage private-sector investment or mechanisms, such as legislation, to either raise additional adaptation finance or encourage private-sector involvement. In addition to the material impact on our landscape and biodiversity, climate change is of increasing concern to regulators, businesses, investors and insurers. UNDP Bangladesh/GMB Akash. However, due to difficulties in obtaining sufficiently granular and robust data across countries, we are unable to include the potential impact of some hazards, including pluvial flooding and hurricanes. Whilst world attention remains focused on the public health emergency created by the COVID-19 crisis, climate change is a continuous threat, also with significant longer-term impacts, that cannot be ignored. Join Swiss Re to contribute to predicting, preparing and protecting against the world's biggest risks to make society more resilient. We investigated about 50 adaptation case studies across Asia, through which we identified and detailed five adaptation measures: diagnose risk and enable response, protect people and assets, build resilience, reduce exposure, and finance and insure. While we recognize that the challenges are large, Asia is well positioned to meet the challenges and capture the opportunities. The case studies show that the direct risk to socioeconomic systems is determined by the severity of the hazard and its likelihood, the exposure to hazards of various stocks of capital (people, physical capital, and natural capital), and the resilience of the stocksfor example, the ability of physical assets to withstand flooding. Climate state today is defined as average conditions between 1998 and 2017, in 2030 as average between 2021 and 2040, and in 2050 as average between 2041 and 2060. It also accounts for nearly half of global greenhouse gas emissions. Prek Ta Am Village, Bos Learv Commune, Jit Borey district. Based on the top three contributors to Indonesias agricultural greenhouse gas emissionsrice cultivation, manure management, and enteric fermentationwe find six cost-efficient measures with high MtCO2e mitigation potential (these are measures related to agricultural production, versus other measures like diet shifts, that entail changes in consumer behavior). However, our report considers a more limited time frame, to 2050. These countries could see extreme increases in heat and humidity, which may significantly affect workability and livability. Severe child stunting (lack of growth due to malnutrition) is projected to increase by 62% in South Asia due to climate change by 2050 without accelerated investment in planned adaptations. A two metre sea level rise could displace over 180 million people, mostly across Asia. In addition to the material impact on our landscape and biodiversity, climate change is of increasing concern to regulators, businesses, investors and insurers. By inherent risk, we mean risk absent adaptation and mitigation. In 2019, the temperature reached 50.6 degrees Celsius, taking the lives of 36 people. This outlook is based on contributions from hundreds of McKinsey experts from around the world, from fields including oil and gas, automotive, renewable energy, and basic materials. For this analysis, we assume demand for water stays constant over time, to measurement of impact of climate change alone. Swiss Re is Co-Chair of the World Economic Forum's Allianceof climate leaders; a worldwide coalition of CEOs from across industry sectors, committed to delivering concrete climate solutions and innovations in their practices, operations and policies. SHARM EL-SHEIKH, Egypt (Reuters) - The Bill & Melinda Gates Foundation has pledged $1.4 billion to help smallholder farmers cope with the impacts of climate change, part of efforts at global climate talks in Egypt to scale up supply of so-called adaptation finance. 13. For further details, see Climate risk and response: Physical hazards and socioeconomic impacts. We attempt to include impacts from a wide range of hazards. For physical assets and infrastructure services, we examined 17 types of infrastructure assets for their vulnerability to different types of climate hazards, with a focus on the potential impacts of flooding in Tokyo and wildfires in Australia. To maintain growth momentum, eradicate poverty, and respond to climate change, the region must invest $1.7 trillion a year in infrastructure through 2030, according to the Asian Development Bank. Therefore, in order to avoid underestimating flood risk, all three flood sources were modeled together to provide a realistic estimate of the 1-in-100-year flood event. The high temperatures will impact 23 states in 2020, up from 9 in 2015 and 19 in 2018. Bangladesh is one of the first countries to fall prey to climate change. This report quantifies the physical risk from climate change for Asia. Countries in southeast Asia, Latin America, the Middle East and Africa also score relatively low in terms of vulnerability to physical risks and low levels of adaptative capacity. To simulate the worst-case scenario, all three flood sources were used as inputs to model the 24-hour compound flood event. Southeast Asia potentially will face more severe consequences of climate change than other parts of the world, according to the business . To visually capture the impact of climate change in their communities, we invited photographers from five countries in Central Asia to share their photos as part of a region-wide competition. Rainwater can be harvested, and the rivers could be restored to their original flow so that they can bring back the wetlands and the natural ways of silts and nutrients. Focus on Asia Pacific region, Discover all Corporate Solutions locations, India's first parametric insurance protection. 6 Earth World News, Desert-Dwelling Intern Quickly Learns to Love the Water, Fisheries, A Strategic Approach to Wild Pig Management. However, we also found that the decarbonization of the transportation sector requires about $120 billion incremental cumulative investment by 2030 in order to deploy technology for transportation electrification and scale the infrastructure needed, such as EV charging stations. In addition, the region is likely to see biome shift, or share of land surface changing climate classification. Many concrete steps can be taken to address the threat of climate change. The Asian GDP at risk accounts for more than two-thirds of the total annual global GDP impact. Unmitigated, climate change will lead to large economic losses across the globe. Vietnam and India have been severely hit by tropical storms. For the purpose of this analysis, we focus on grid cells in the six highest-producing breadbasket regions in Asia for each crop. The beauty of the blue planet is that it is self-restoring and self-healing. In Australia, we find wildfires could cause substantial damage to different types of infrastructure assets ranging from transportation to energy (Exhibit 6). Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, Thomas F. Stocker et al., eds., New York, NY: Cambridge University Press, 2014. 2 Source: European Commission; Woodwell Climate Research Center; McKinsey Global Institute analysis. We characterize risk within and across different countries and categorize impacts in four different types of countries in Asia: Frontier Asia, Emerging Asia, Advanced Asia, and China. The world is currently not doing enough to help poorer nations withstand the effects of global warming, the United Nations said . Decarbonizing agriculture in Asia and preventing deforestation is a significant mitigation opportunity; agriculture and deforestation combined account for 10 percent of CO2 emissions in Asia and more than 40 percent of CH4 emissions. From shifting weather patterns to rising sea levels, the impacts of climate change are unparalleled in scale. Today, Asia generates about 80 percent of global CO2 emissions in the steel and cement industries. Insurance indicators: Penetration, OECD. We highlight the following key methodological choices: To link Asian physical climate risk to socioeconomic impact, we investigate six cases that illustrate Asias exposure to climate change extremes and proximity to physical thresholds. Secondly, the melting of ice sheets and glaciers due to elevated temperatures also adds water to the worlds seas and oceans. In the case of Tokyo, we estimate the impact of a compound flood event of simultaneous one-in-100-year rainfall, streamflow, and storm surge events both today and in 2050 (Exhibit 5). The Swiss Re Institute has developed a Climate Economics Index to measure how unmitigated climate change could impact 48 of the world's economies (90% of global GDP). In Indonesia, for example, the agricultural sector accounts for 13 percent of national GDP and 30 percent of total employment. The lower end of the range assumes that todays sectoral composition persists, while the higher end is based on projections from IHS Markit Economics and Country Risk on sectoral transitions and GDP increases. Click here to share this quote and article. Under RCP 4.5, 2.3 degrees Celsius warming would be reached in the year 2080. Climate change is a current uproar all over the world. Climate change is directly linked to coral bleaching, putting biodiversity and marine ecosystems at risk. We examined six case studies showing the impacts of climate change under RCP 8.5 on five socioeconomic systems across Asia: livability and workability, food systems, physical assets, infrastructure services, and natural capital. Following standard practice, our findings are therefore framed for the most part as statistically expected values. For estimation of capital stock at risk of riverine flooding, we used a country-level urban damage risk indicator from WRI Aqueduct Flood Analyzer 2019 under a business-as-usual scenario (RCP 8.5, SSP 2) and existing levels of flood protection. We must make dramatic changes to our production and consumption patterns as well as transform our energy, transport, and land-use. Jonathan Woetzel is a McKinsey senior partner and director of the McKinsey Global Institute (MGI), based in Shanghai; Oliver Tonby is a senior partner in Singapore and chairman, McKinsey Asia; Mekala Krishnan is an MGI senior fellow in Boston; Yuito Yamada is a partner in Tokyo; Suvojoy Sengupta is a partner in Gurgaon; Dickon Pinner is a senior partner in San Francisco and leader of McKinseys global Sustainability Practice; Ruslan Fakhrutdinov is an associate in Moscow, and Tetsu Watanabe is an associate in Tokyo. In Bangladesh, around 18 million people living in coastal areas will lose their homes if the sea level rises by one metre. Insurance is particularly important for Asia to minimize the impact of intensifying climate risks. See text of report for discussion of potential benefits. 4 The South Asia region consists of the eight countries Afghanistan [note 1], Pakistan, India, Nepal, Bhutan, Bangladesh, the Maldives and Sri Lanka. Natural capital provides valuable social and economic services to billions of people in the region, and climate change is intensifying the degradation of Asias natural capital that is already endangered. In Asia-Pacific, millions of lives are on the line. The funds have built a strong private-sector portfolio and at the time of writing had about $1.6 billion under management. Extreme climate-related events - heatwaves, storms, floods, fires and droughts - affect more than half of the region's population every year . Climate Change in India and Pakistan will have a disproportionate impact on the more than 400 million poverty struck humans since many depend on natural resources for their food, shelter, and income. Three countries across the region - Indonesia, the Marshall Islands, and Vietnam - highlight how the World Bank is supporting climate action while securing resources and safeguarding important conservation gains far into . Forbes Under 30 Europe 2021: These Impact-Driven Startups Are Changing The World, The seafood industry must pull our oceans back from the brink, Govt, partners in campaign against plastics on L. Victoria. About 93 percent of Indonesia's farmers work on small family farms, with about 50 percent of annual household income from farm activities. In response, policy makers and business leaders will need to formulate adaptation strategies. Pakistan faces "significantly higher average temperatures than the global average, with a potential rise of 1.3C-4.9C by the 2090s over the 1986-2005 baseline," according to a study, which . 1. .chakra .wef-facbof{display:inline;}@media screen and (min-width:56.5rem){.chakra .wef-facbof{display:block;}}You can unsubscribe at any time using the link in our emails. Now expanded to more crops, this program helps farmers build resilience by supplementing their income shortfall and covering the cost of inputs that enable them to sustain their livelihoods. We do not assess the efficacy of climate models but instead draw on best-practice approaches from climate science literature and highlight key uncertainties. Although climate risks will not necessarily reduce agricultural yields for some breadbaskets or crops, they will likely increase production volatility, destabilizing farmers incomes. We examined six case studies showing the impacts of climate change under RCP 8.5 on five socioeconomic systems across Asia: livability and workability, food systems, physical assets, infrastructure services, and natural capital. 4 The effects of climate change are on the increase and no part of the world is immune. The frequency and power of heatwaves are increasing in India because of climate change. Asia-Pacific is the most disaster-prone region in the world. This is another opportunity to crowd in the private sector. Risk Knowledge provides fresh perspectives on key topics, with a focus on enabling growth and innovation in the insurance industry. Large parts of Ho Chi Minh City, Mumbai, Shanghai, Bangkok, and Basra are often inundated. Emissions influence both global climate and regional climate variations, which in turn influence the risk of specific climate hazards (such as drought and sea level rise). The (Economic) Impacts of Climate Change: Some Implications for Asian Economies Publication | December 2019 As climate change is a global phenomenon, it will take efforts by economies large and small to tackle this problem. Therefore, it is crucial for Asian countries to ensure that the most vulnerable communities are protected and that their voices are included in decision making. Air pollution due to carbon dioxide, methane, and other greenhouse gases raises the global temperature. Download (Free: 931.86 KB) A rise in the sea level is mainly due to two factors, both of them being related to climate change. Things that we depend upon and value water, energy, transportation, wildlife, agriculture, ecosystems, and human health are experiencing . Climate risk and response: Physical hazards and socioeconomic impacts, McKinsey_Website_Accessibility@mckinsey.com, In India, we find that effectively 30 percent of annual daylight hours may be lost by 2050, glacial mass is expected to drop by 10 to 25 percent by 2030, seafood yields in the Sea of Japan fell by 35 percent, Tokyo Metro is working to minimize the disruption of subway operations, store meltwater in huge standing structures, relocate the countrys capital from Jakarta, the region must invest $1.7 trillion a year in infrastructure through 2030, 60GW to be decommissioned by 2030 and 112GW by 2050, four of the six measures result in cost savings, help Japan meet its Paris Agreement target in 2030. Key topics, with a focus on enabling growth and innovation in the region... 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