The economic impact of climate change in Southeast Asia

The economic impact of climate change in Southeast Asia

Southeast Asia is expected to face the worst effects of global warming in the next 30 to 50 years. This will have a significant impact on regional economies and livelihoods.

According to recent predictions, increased global warming is expected to significantly impact labour capacity and productivity in Southeast Asia by 2045. Rising temperatures will increase the number of unsafe ‘heat stress’ days per year, which will significantly impact vulnerable workers, and have a negative impact on regional economies.

Worst hit will be Singapore and Malaysia, which could experience decreases in productivity by up to 25 percent. Expected decreases in productivity will vary across the region, with Indonesia predicted at 21 percent, Cambodia and the Philippines at 16 percent, and Thailand and Vietnam at 12 percent.

Impact on Agriculture and Natural Resources

Furthermore, in 2009, the International Fund for Agricultural Development (IFAD) released an assessment report predicting that agriculture and natural resource management in Southeast Asia will be seriously affected by the adverse impacts of climate change.

According to IFAD, climate extremes, such as floods, droughts and cyclones, can impact irrigation systems, crop yields, soil degradation, loss of ecosystems, and water resources.

This will have an adverse impact on those economies relying on agriculture and natural resources. These climate impacts will also severely threaten local livelihoods tied extensively to agricultural production.

In the same year, the Asian Development Bank (ADB) released a report on the economics of climate change in Southeast Asia.

According to the ADB, Southeast Asia is particularly vulnerable to climate change, due to its heavily populated coastlines, large agricultural sectors and large number of the population living under $2 a day.

Within the region, the agriculture sector accounted for 43 percent of total employment in 2004, and contributed to 11 percent of GDP in 2006. The region is also highly dependent on natural resources and forestry, and these exports are likely to be adversely affected by extreme weather events.

The report predicted that rice yields were likely to decline by up to 50 percent on average by 2100 compared to 1990. Countries such as Vietnam and Thailand are expected to be the most affected by this decline.

In addition, rising sea levels could result in the loss of about 12 percent of rice production.

Impact on Coastal Communities

In 2013, the World Bank issued a press release, warning that warmer weather could threaten livelihoods in Southeast Asia. The release predicted the degradation of coral reefs, which is likely to diminish tourism, reduce fish stocks and leave coastal communities more vulnerable to storms.

This press release was followed by a 2014 report released by the Intergovernmental Panel on Climate Change (IPCC), which warned that people living in coastal regions of Asia could face some of the worst effects of global warming.

It is expected that millions of vulnerable people are likely to lose their homes due to flooding and famine.

Enhanced Sustainable Development Practices 

If Southeast Asia fails to engage in sustainable development practices and disaster risk management, regional growth and poverty eradication will be severely impacted.

While many Southeast Asian countries have taken steps to tackle the impact of climate change, more needs to be done to protect livelihoods and economies.

The region needs to employ a number of adaptation measures, encouraging low-carbon growth, raising public awareness, funding additional climate change research, and enhancing policy planning.

In the long-term, this might help to mitigate the effects of climate change, and in return, help safeguard regional economies and livelihoods.

About Author

Laura Southgate

Laura Southgate is Lecturer in International Security at the Centre for International Security and Resilience, Cranfield University, located at the Defence Academy of the United Kingdom. She has a PhD in International Relations from the University of Otago, New Zealand, and an MA in International Relations and Security, and a BA in Law and Politics, from the University of Liverpool.