This year Climate Conference defined as the Conference of the Parties (COP29), is being held in Baku, the capital of Azerbaijan. Many important personalities, distinguished guests and climate activists have participated in COP29. So far, we have not heard much about praiseworthy commitment from any quarter towards tackling the impact of climate change. In the meantime, some world bodies, including the Asian Development Bank (ADB) have published their reports expressing concern, prediction and probable consequences.   

On climate issues, ADB has prepared a new report predicting severe climate challenges in the emerging market economy. The said report states that countries in the Asia-Pacific region will need to spend a substantial amount of money to adapt to climate change; otherwise, the cost may be much higher. According to the report, the continued inaction of these countries in tackling climate change may cause 17%-size hole in the region’s economic growth over the next decades. In the report, it is mentioned that the deadline to keep global warming within 1.5 degree Celsius agreed in the Paris Agreement is approaching. Nine years have passed since this agreement was signed but there is no tangible improvement in this area and the target seems out of reach.

As greenhouse gas emission seems to reach a record high, the signatories of the Paris Agreement are required to significantly increase funding with immediate efforts to get back on track for maintaining 1.5 degree Celsius. If they fail to do so, there may be a severe impact on the economy. As discussed in the report, Asia-Pacific countries have some dual features in tackling climate change. These countries bear massive economic growth potentiality and, at the same time, they are most vulnerable to climate change. If they do not take appropriate measures with adequate funding, their economy will continue to grow right now but eventually suffer the worst due to climate change. On the contrary, if these countries provide adequate funding for climate change action, their present growth may be slow but the eventual benefit will be much higher in the long run.

ADB report estimates that if emission exceeds the threshold, climate change may reduce Asia-Pacific’s GDP (Gross Domestic Products) by 17% by 2070. There are additional consequences, which include (I) rising sea levels may threaten the coastal belt and population living there, (II) heatwaves may disrupt labour supply as well as productivity and (III) climate-dependent sectors, including agriculture, pisciculture and forestry, may face a severe setback. Another estimate revealed by worldwide economic professional body calculates that about 75% of Asia-Pacific GDP seems to be at high risk of climate disruption. According to their report, the estimate of climate change in this area may affect at least half of the world’s labour force, which is in the vulnerable industries of this region. They forecast inaction in climate change may result in regional economic losses to the tune of about $96 trillion by 2070. It is learnt that Asian countries have made progress towards decarbonisation; however, the progress is very slow. Policies, so far implemented, are not found good enough and thus may lead to dangerous level of global warming.     

Taking appropriate measures to tackle climate change is not easy in the Asia-Pacific region and will not come without cost. The ADB report estimates that countries in the Asia-Pacific rim need to invest the amount in between $102 billion to $431 billion every year to tackle climate change. However, the reality is that funding remains well below the requirement.

There is another calculation from the United Nations that states that globally net zero transmission requires $0.9 trillion to $2.1 trillion every year during the period between 2021 and 2050. This amount seems substantial, but the report opines that it is manageable in the global context where the economy and market size is $110 trillion. If the required funding can be arranged, achieving the target of staying within 1.5 degree Celsius is not impossible, provided some effective measures can be undertaken.

In this context, countries in the Asia-Pacific region positioned themselves in a way to reap better benefit because these countries have massive potential for renewable energy generation and can produce the world’s cheapest renewable electricity. The fast-growing economies in the region evidently have the advantages of cheap workforce and massive manufacturing base, which may help Asia develop the technological framework to accelerate decarbonisation. If governments of these countries develop consistent policies and build climate favourable financial systems, they can attract contributions from the private sector, which may play a key role in meeting the deficit.

Experts opine that policy uncertainty may deter investment, especially when a country’s power changes. Investors prefer to retain more sustainable assets when countries introduce climate law. On the other hand, policy inconsistency and misalignment cause dissatisfaction and frustration among private investors. This might happen in the leading country, the USA, after President-elect Donald Trump assumes power because there is the possibility of significant change in the climate policy. He is basically a businessman and so may resort to deviating from climate policy and slashing funding commitment, which will herald a negative impression, especially for developed nations.

Climate change is now a burning issue with global warming that has started impacting all countries, including both rich and poor. Devastating floods, cyclones, tidal bore, draught and wildfire in the developed world are indications of climate challenges. However, measures taken so far are inadequate and mostly limited to discussions, seminars and conferences. Although the impact of climate change is worldwide, Asia is poised to be the worst victim economically, financially, geographically and socially as well.
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The writer is a certified anti-money laundering specialist and banker based in Toronto. Email:
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