Climate change could cost Pakistan 21.1% of GDP by 2070

November 01, 2024 (MLN): Climate change, under a high-emissions scenario, could lead to a total loss of 21.1% of Pakistan's GDP by 2070, as highlighted in the Asian Development Bank's latest report.

For the Asia-Pacific region, climate change is expected to cause a total GDP loss of 16.9%.

Most of the region would face more than 20% loss, according to ADB.

Among the assessed countries and subregions, these losses are concentrated in Bangladesh (–30.5%), Viet Nam (–30.2%), Indonesia (–26.8%), India (–24.7%), “the rest of Southeast Asia” (–23.4%), higher-income Southeast Asia (–22%), Pakistan (–21.1%), the Pacific (–18.6%), and the Philippines (–18.1%).

Losses increase at a higher rate over time, as the difference between 2050 and 2070 losses is greater than between 2030 and 2050.

These losses are far above prior model-based losses and are consistent with the upper bound of econometric estimates.

They also confirm that climate policy responses, including adaptation and mitigation, will be essential to the future welfare of the Asia and Pacific region.

Losses of 16.9% of regional GDP by 2070 are calculated under median sectoral shock values, but sector shocks have uncertainties, even under a single emissions scenario.

If the 90th percentile of these shocks are considered, losses equate to 26.7% of regional GDP, a value that is 58.0% higher than under median shock values, with Bangladesh experiencing a 68.6% loss and a number of other locations facing losses of around 40%.

Under the 10th percentile of shocks, the loss is 11.4% of regional GDP, which is still substantial.

The estimates can also be considered conservative in that the modelling only reflected a subset of actual climate change impacts.

For example, effects on human health beyond labor productivity are not included, nor are effects on ecosystem services, such as pollination, regulation of pests and diseases, or human conflict.

In general, these omissions mean that a more comprehensive accounting would find even higher losses.

Considering the impacts of sea-level rise and storm surges under a high end emissions climate scenario, the loss of GDP in 2070 for the Asia and Pacific region is 6.3% with respect to the “no climate change” scenario.

Indonesia, Bangladesh, Viet Nam, the Pacific, and higher-income Southeast Asia have the largest losses among developing countries and subregions at –16.1%,–15.4%, –15.0%, –13.8%, and –13.3% of GDP, respectively.

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