Much of Asia is already responding to the adaptation and mitigation challenges of climate change. By building on these efforts, sharing best practices, and galvanizing support, the region can emerge as a leader in tackling one of the world’s biggest threats while also promoting sustainable growth and prosperity.
TOKYO – Many parts of Asia seem to be emerging from the COVID-19 pandemic relatively well. But overcoming the public-health crisis is only one challenge the region faces. Where climate change is concerned, Asia may be far more vulnerable than other parts of the world.
Building on global research published at the start of 2020, the McKinsey Global Institute (MGI) recently estimated the probable impact of the physical climate risks facing Asia today and over the next three decades. Our analysis involved micro cases that illustrate exposure to climate-change extremes and proximity to physical thresholds, as well as assessments of the potential socioeconomic impact in 16 countries (Australia, Bangladesh, Cambodia, China, India, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, Pakistan, the Philippines, Thailand, Vietnam, and South Korea).
Although climate scientists use scenarios ranging from lower (Representative Concentration Pathway 2.6) to higher (RCP 8.5) concentrations of carbon dioxide, we focus on RCP 8.5 in order to assess the full inherent physical risk of climate change in the absence of further decarbonization. We found that Asia was more vulnerable than other regions to climate risk in three key respects.
First, by 2050, up to 1.2 billion people globally – the vast majority of them in Asia – could be living in areas with a non-zero annual probability of lethal heat waves. Second, Asia accounts for more than two-thirds of the global GDP that is at risk due to the loss of outdoor working hours resulting from the increase in heat and humidity by 2050. Third, by 2050, Asia could account for more than three-quarters of the global capital stock damaged by riverine flooding. In two other areas, however, we found that Asia’s vulnerability was on par with or slightly below the global average: disruption to food systems, and the destruction of natural ecosystems for local flora and fauna.
Moreover, MGI’s Four Asias framework – consisting of Frontier Asia, Emerging Asia, Advanced Asia, and China – reveals noticeable differences within the region. In particular, countries with lower levels of GDP per capita in Frontier and Emerging Asia are most at risk from climate change.
Frontier Asia, comprising Bangladesh, India, and Pakistan, could experience extreme increases in heat and humidity that may significantly affect work and livability. Emerging Asia, including major Southeast Asian economies like Thailand and the Philippines, will experience a similar (though potentially less extreme) trend, along with growing exposure to extreme precipitation events. Under RCP 8.5, the share of working hours lost to rising heat and humidity in climate-exposed regions in Frontier and Emerging Asia could increase by 7-12 percentage points by 2050, compared to a 2-5 percentage-point increase in Advanced Asia and China.
At a time of escalating global turmoil, there is an urgent need for incisive, informed analysis of the issues and questions driving the news – just what PS has always provided.
Subscribe to Digital or Digital Plus now to secure your discount.
Subscribe Now
Advanced Asia, including Australia, New Zealand, Japan, and South Korea, is expected to be a net agricultural beneficiary of climate change over the near term. But for some countries in the region, drought and water supply will pose major challenges.
Although China has a heterogeneous climate, the country is predicted to become hotter. As a result, the average share of effective outdoor working hours lost each year in exposed areas could increase from 4.5% in 2020 to as much as 6% in 2030 and 8.5% in 2050.
The socioeconomic impact of climate change will increase across Asia as thresholds of physical systems are breached and knock-on effects materialize. For example, almost one-third of Australia could have more than 20 additional high-fire-risk days per year, increasing the share of the country’s capital stock exposed to at least five such days from 44% today to 60% in 2050. Likewise, without additional climate adaptation, the cost of real estate and infrastructure damage from a 100-year flood in Tokyo could more than double to $14.2 billion by 2050.
Although Asia faces significant climate challenges, it can overcome them through effective adaptation and mitigation – and seems well positioned to do so. For starters, the massive infrastructure investment planned throughout the region, amounting to $1.7 trillion annually through 2030, provides a unique opportunity to embed climate-risk management in infrastructure design.
Nonetheless, developing a comprehensive regional adaptation plan is essential. It should include diagnosing climate risks and enabling a response, protecting people and assets, building resilience, reducing exposure, and finance and insurance. Adaptation is likely to entail tough choices about what to protect and what to relocate, as well as how to safeguard the most vulnerable populations.
Asia also plays a critical role in global mitigation measures. Key emissions-reduction efforts include shifting from coal – which accounts for 90% of the region’s power-sector emissions – to renewables. Asia also needs to decarbonize industrial operations such as steel and cement; the region currently generates about 80% of global CO2 emissions in these industries. In addition, Asia must transform agriculture and forestry, which account for 10% of the region’s CO2 emissions and over 40% of its methane emissions, and decarbonize road transportation and buildings.
A critical part of enabling this transition will be managing the risks that may arise, such as rising costs, labor displacement, and impacts on specific communities. In India, for example, there is a significant risk of electricity price increases caused by the capital expenditures needed to install renewables, and of job losses as the country’s power mix shifts away from coal.
In China, finding ways to scale up decarbonization technologies in steel production will be key to preventing disruption of the industry’s massive output. In Indonesia, it will be essential to support people whose livelihoods depend on agriculture as the sector decarbonizes. And in Japan, policymakers could facilitate the transition to battery electric vehicles by providing incentives and policies to help overcome EVs’ higher up-front cost.
Much of Asia is already responding to the adaptation and mitigation challenges of climate change. By building on these efforts, sharing best practices, and galvanizing support, the region can emerge as a leader in tackling one of the world’s biggest threats while also promoting sustainable growth and prosperity.
To have unlimited access to our content including in-depth commentaries, book reviews, exclusive interviews, PS OnPoint and PS The Big Picture, please subscribe
With German voters clearly demanding comprehensive change, the far right has been capitalizing on the public's discontent and benefiting from broader global political trends. If the country's democratic parties cannot deliver, they may soon find that they are no longer the mainstream.
explains why the outcome may decide whether the political “firewall” against the far right can hold.
The Russian and (now) American vision of "peace" in Ukraine would be no peace at all. The immediate task for Europe is not only to navigate Donald’s Trump unilateral pursuit of a settlement, but also to ensure that any deal does not increase the likelihood of an even wider war.
sees a Korea-style armistice with security guarantees as the only viable option in Ukraine.
Rather than engage in lengthy discussions to pry concessions from Russia, US President Donald Trump seems committed to giving the Kremlin whatever it wants to end the Ukraine war. But rewarding the aggressor and punishing the victim would amount to setting the stage for the next war.
warns that by punishing the victim, the US is setting up Europe for another war.
Within his first month back in the White House, Donald Trump has upended US foreign policy and launched an all-out assault on the country’s constitutional order. With US institutions bowing or buckling as the administration takes executive power to unprecedented extremes, the establishment of an authoritarian regime cannot be ruled out.
The rapid advance of AI might create the illusion that we have created a form of algorithmic intelligence capable of understanding us as deeply as we understand one another. But these systems will always lack the essential qualities of human intelligence.
explains why even cutting-edge innovations are not immune to the world’s inherent unpredictability.
TOKYO – Many parts of Asia seem to be emerging from the COVID-19 pandemic relatively well. But overcoming the public-health crisis is only one challenge the region faces. Where climate change is concerned, Asia may be far more vulnerable than other parts of the world.
Building on global research published at the start of 2020, the McKinsey Global Institute (MGI) recently estimated the probable impact of the physical climate risks facing Asia today and over the next three decades. Our analysis involved micro cases that illustrate exposure to climate-change extremes and proximity to physical thresholds, as well as assessments of the potential socioeconomic impact in 16 countries (Australia, Bangladesh, Cambodia, China, India, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, Pakistan, the Philippines, Thailand, Vietnam, and South Korea).
Although climate scientists use scenarios ranging from lower (Representative Concentration Pathway 2.6) to higher (RCP 8.5) concentrations of carbon dioxide, we focus on RCP 8.5 in order to assess the full inherent physical risk of climate change in the absence of further decarbonization. We found that Asia was more vulnerable than other regions to climate risk in three key respects.
First, by 2050, up to 1.2 billion people globally – the vast majority of them in Asia – could be living in areas with a non-zero annual probability of lethal heat waves. Second, Asia accounts for more than two-thirds of the global GDP that is at risk due to the loss of outdoor working hours resulting from the increase in heat and humidity by 2050. Third, by 2050, Asia could account for more than three-quarters of the global capital stock damaged by riverine flooding. In two other areas, however, we found that Asia’s vulnerability was on par with or slightly below the global average: disruption to food systems, and the destruction of natural ecosystems for local flora and fauna.
Moreover, MGI’s Four Asias framework – consisting of Frontier Asia, Emerging Asia, Advanced Asia, and China – reveals noticeable differences within the region. In particular, countries with lower levels of GDP per capita in Frontier and Emerging Asia are most at risk from climate change.
Frontier Asia, comprising Bangladesh, India, and Pakistan, could experience extreme increases in heat and humidity that may significantly affect work and livability. Emerging Asia, including major Southeast Asian economies like Thailand and the Philippines, will experience a similar (though potentially less extreme) trend, along with growing exposure to extreme precipitation events. Under RCP 8.5, the share of working hours lost to rising heat and humidity in climate-exposed regions in Frontier and Emerging Asia could increase by 7-12 percentage points by 2050, compared to a 2-5 percentage-point increase in Advanced Asia and China.
Winter Sale: Save 40% on a new PS subscription
At a time of escalating global turmoil, there is an urgent need for incisive, informed analysis of the issues and questions driving the news – just what PS has always provided.
Subscribe to Digital or Digital Plus now to secure your discount.
Subscribe Now
Advanced Asia, including Australia, New Zealand, Japan, and South Korea, is expected to be a net agricultural beneficiary of climate change over the near term. But for some countries in the region, drought and water supply will pose major challenges.
Although China has a heterogeneous climate, the country is predicted to become hotter. As a result, the average share of effective outdoor working hours lost each year in exposed areas could increase from 4.5% in 2020 to as much as 6% in 2030 and 8.5% in 2050.
The socioeconomic impact of climate change will increase across Asia as thresholds of physical systems are breached and knock-on effects materialize. For example, almost one-third of Australia could have more than 20 additional high-fire-risk days per year, increasing the share of the country’s capital stock exposed to at least five such days from 44% today to 60% in 2050. Likewise, without additional climate adaptation, the cost of real estate and infrastructure damage from a 100-year flood in Tokyo could more than double to $14.2 billion by 2050.
Although Asia faces significant climate challenges, it can overcome them through effective adaptation and mitigation – and seems well positioned to do so. For starters, the massive infrastructure investment planned throughout the region, amounting to $1.7 trillion annually through 2030, provides a unique opportunity to embed climate-risk management in infrastructure design.
Nonetheless, developing a comprehensive regional adaptation plan is essential. It should include diagnosing climate risks and enabling a response, protecting people and assets, building resilience, reducing exposure, and finance and insurance. Adaptation is likely to entail tough choices about what to protect and what to relocate, as well as how to safeguard the most vulnerable populations.
Asia also plays a critical role in global mitigation measures. Key emissions-reduction efforts include shifting from coal – which accounts for 90% of the region’s power-sector emissions – to renewables. Asia also needs to decarbonize industrial operations such as steel and cement; the region currently generates about 80% of global CO2 emissions in these industries. In addition, Asia must transform agriculture and forestry, which account for 10% of the region’s CO2 emissions and over 40% of its methane emissions, and decarbonize road transportation and buildings.
A critical part of enabling this transition will be managing the risks that may arise, such as rising costs, labor displacement, and impacts on specific communities. In India, for example, there is a significant risk of electricity price increases caused by the capital expenditures needed to install renewables, and of job losses as the country’s power mix shifts away from coal.
In China, finding ways to scale up decarbonization technologies in steel production will be key to preventing disruption of the industry’s massive output. In Indonesia, it will be essential to support people whose livelihoods depend on agriculture as the sector decarbonizes. And in Japan, policymakers could facilitate the transition to battery electric vehicles by providing incentives and policies to help overcome EVs’ higher up-front cost.
Much of Asia is already responding to the adaptation and mitigation challenges of climate change. By building on these efforts, sharing best practices, and galvanizing support, the region can emerge as a leader in tackling one of the world’s biggest threats while also promoting sustainable growth and prosperity.