Scooter riders in Ho Chi Minh City on November 1, 2016.
Thomas Koehler | Photo library | Getty Images
Southeast Asia is likely to face more severe climate change impacts than other parts of the world, according to McKinsey's economics and research division.
Climate change is a critical challenge Southeast Asia must face if the region is to expand its economy and remain a major engine of growth for the world, the McKinsey Global Institute said in a report.
Asia as a region is exposed to dangers such as floods, droughts, severe typhoons and conditions of increasing heat and humidity.
The coronavirus pandemic underscores "the importance of risk and resilience to life and livelihood, and with the world focused on recovery, it is important not to lose sight of the role of climate," said Jonathan Woetzel, director at McKinsey Global Institute is a leader in research, said in a statement.
"Asia is confronted with climate threats with potentially serious socio-economic effects and therefore has a great interest in playing a pioneering role in overcoming the challenges," said Woetzel.
In addition to the effects on Southeast Asia, the study also describes the potential effects of extreme weather conditions on countries like Bangladesh, India and Pakistan – a region they referred to as "Frontier Asia".
"We estimate that by 2050 there could be between 500 and 700 million people in Frontier Asia living in regions with an annual chance of a fatal heat wave of around 20 percent," the report said.
Coastal flooding, made worse by rising sea levels, is a serious risk worldwide. Reports suggest that trillions of dollars could be at stake in the future from damaged assets. Floods not only damage infrastructure, but sometimes also contaminate drinking water sources.
Economy at stake
By 2050, between $ 2.8 and $ 4.7 trillion of gross domestic product in Asia each year will be at risk from loss of effective outdoor hours due to higher temperatures and humidity, according to the report.
Asian countries with lower GDP per capita would be most at risk and the poor would be hardest hit, the McKinsey report said. That's because they face more extreme climates than the rich, rely more on outdoor work and natural capital, and may have less financial means to adapt.
McKinsey also highlighted some of the potential climate threats countries in Southeast Asia are facing. They were referred to in the report as "Emerging Asia" and consist of Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Thailand and Vietnam.
In the countries of the region, heat and humidity will increase. By 2050, in an average year, between 8% and 13% of GDP in these countries could be at risk due to increasing heat and humidity. The likelihood of extreme rainfall in Indonesia could triple or quadruple by 2050. While flooding is common in Ho Chi Minh City in Vietnam, the resulting infrastructure damage could amount to $ 500 to $ 1 billion by 2050 and cost between $ 1.5 and $ 8.5 billion.
Build a stable infrastructure
One advantage Southeast Asia, and many developing parts of Asia in general, has is that infrastructure and urban areas are still being built, McKinsey said. This gives countries the opportunity to build an infrastructure that is more resilient to extreme climate change and can withstand severe events.
"Like all parts of the world, Asia can help reduce emissions. Climate science tells us that warming will continue until net zero emissions are reached," the report said.
"If policymakers and business leaders can harness the region's innovative spirit, talent and flexibility, Asia could lead a global response to climate risk by adjusting and mitigating the most serious potential impacts," it added.