The Economics of Climate Change in South East Asia

Climate Change in SE Asia: Costs of Action vs Inaction

John PearsonBritish High Commission

SingaporeApril 2010

Stern Review

Cost of Action:

1-2% of Global GDP to act now – but more (5-20%)

if we delay

Cost of Inaction:

Up to 20% of GDP

Climate Change Is Happening

Climate Change Is Happening

CO2 already the highest in Homo Sapien’s existence

Bronze Age Begins

(5500)Homo Sapiens Appear

(200,000)

Agriculture Begins

(10,000)

Earliest Evidence of Cooking (400,000)

Climate Change Will Continue

2050: +1.3 - 2.3ºC

2100: +2.4 - 5.0ºC

+70cm sea level by 2100

S E Asia is very vulnerable

People and economy near the sea in low lying areas (Jakarta, Manila...)

Dependent on agriculture and natural resources

High level of poverty

Typhoon Ondoy

Likely Impacts

Rice yield could decrease by 50% by 2100, threatening food security

Forest could be replaced by savannah and shrub with low carbon sequestration potential

Increased water stress and impacts on human health.

SE Asia could lose 6.7% of GDP by 2100, if non-market impacts and catastrophic

risks are also taken into account.

Adaptation

Drought and saline resistant crops

Efficient irrigation techniques

Climate proof infrastructure

Early warning systems

Adaptation Makes Economic Sense

By 2100Benefit:1.9% of GDP Cost: 0.2% of GDP

Mitigation

12% of world emissions (2000)

Will grow greatly in next 30 years

So need to tackle now

Reduce Emissions Cheaply

40% of energy-related CO2 emissions cut at “no cost” by 2020

Another 40% cut at below 1% of GDP

Win Win Options

Mangroves

Hydro PowerReservoirs

The Low Carbon Economy

www.adb.org/Documents/Books/Economics-Climate-Change-SEA/default.asp

World Average – 3.8 tCO2/capita