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Climate change and economic growth nexus in South Asia

Sunday, 27 December 2020
This is an opinion article by an external contributor. The views belong to the writer.
Flood in India. Image: Mark Powell

Data from the Asian Development Bank (ADB) suggest that by 2050 climate change could reduce economic growth in South Asia by 1.8% per year.

The decline in economic growth could reach an average of 8.8% per year by 2100. By 2050, countries such as Nepal, Bangladesh, India, Bhutan, and Sri Lanka are expected to experience a drop in gross domestic product (GDP) growth of 2.2%, 2.0%, 1.8%, 1.4%, and 1.2%, respectively.

Among all the countries in South Asia, Maldives is projected to record the highest loss in GDP by 2050. For a region that is home to more than 1.5 billion people with about a third of the population living in poverty, a decline in GDP growth as a result of climate change is exacerbating the numerous challenges of an area that is already struggling to achieve rapid economic growth to meet sustainable development goals (SDGs).

The impact of climate change is thwarting efforts to alleviate poverty in South Asia; for countries located in the greater Himalayas region; thus Bhutan, Bangladesh, northern India and Nepal, extreme weather conditions attributed to climate change is increasing the frequency of floods and landslide, which is destroying properties and infrastructure. Climate change is having a devastating impact on human health and key sectors of the economy such as agriculture, energy and water.

In South Asia where agriculture is the source of livelihood for more than 60% of the region’s entire population, the agriculture sector accounts for one-third of the region’s total GDP; a significant growth in the agriculture sector is more effective in alleviating poverty than an equivalent growth in any other sector. Projections have shown that the economic value of South Asia’s agribusiness is expected to reach $1.5 trillion by 2030, which is about twice the current value. However this estimated growth in South Asia’s agriculture sector will be constrained by the deleterious effect of climate change.

South Asia is susceptible to the baneful impact of climate change; a condition that exposes the region’s agriculture sector to climate change. Rising temperatures in the region is reducing crop yield as changes in precipitation patterns increase the possibility of short-term crop failures and long-term agriculture productivity diminishes. Other extreme weather conditions such as drought, flood, sedimentation or high soil erosion rates and mudslides brought about by climate change is aggravating challenges associated with agriculture, particularly water related problems.

For a region that relies heavily on rainfed agriculture with the aforementioned constituting 65% of cultivated lands and irrigation agriculture accounting for 35% of farmlands, climate change is threatening food security as agriculture yield drops. Unlike other parts of the world where climate change has a varying effect on irrigated yield, South Asia is experiencing a significant reduction in irrigated yield, which could escalate into huge loss in irrigated yield.

According to the International Food Policy Research Institute (IFPRI) by 2050, average yields for crops in South Asia will decrease considerably when compared to the level of yield in 2000. For important crops such as wheat, rice and maize, climate change will account for a shrink in yield by 50%, 17% and 6%, respectively. This will cause an upsurge in the number of malnourished children which is estimated to reach 59 million by 2050. Concurrently, as agricultural commodities such as rice, maize and wheat together with other agricultural products will be in short supply as a result of climate change. There will be price hikes for these foodstuffs which will eventually be inauspicious for cost of living in the region.

Again, climate change is degenerating economic conditions in South Asia; a region that is water-stressed, energy-poor and food-deficient. Similar to other regions, the challenges associated with South Asia’s energy sector and agriculture sector is intertwined, making these key sectors vulnerable to climate change as they all depend on water as an essential resource. Prevalent decline in the level of surface water, variability in rainfall patterns and frequent droughts as a result of climate change is exerting pressure on South Asia’s groundwater. With about 20 million wells that account for nearly 50% of the world’s total groundwater that is used for irrigation, over reliance on groundwater in South Asia is depleting vital aquifers as the impact of climate change threatens water security.

Considering the indispensable role water plays in food security, farmers in countries across the region have resorted to groundwater as the major source of water for irrigation facilities; about 90% of withdrawn fresh water is used for irrigation. Currently, groundwater in Bangladesh, India, Pakistan and Nepal accounts for close to 79%, 63%, 21% and 19%, respectively, of the entire water used for irrigation in these countries. Furthermore, South Asia’s energy sector is also experiencing the impact of climate change. With almost half of the region’s total population without access to electricity, excessive depletion of surface water in rivers, streams and other water bodies that supply water to dams, droughts and other unfavourable conditions attributed to climate change are reducing hydropower supply in the region which is posing adverse effects on economic activity.

Among countries in South Asia, the share of hydroelectricity in the total electricity supply is almost 100% in Bhutan, 92% in Nepal, 74% in Myanmar, 33% in Pakistan and 17% in India. If appropriate measures are not implemented to rectify this anomaly, economic growth in the region will plummet, especially as the contribution of hydroelectricity to the total commercial energy mix is 50% in Bhutan, 17% in Nepal, 13% in Nepal, 6% in India and 4% in Afghanistan.

Providing a sustainable solution to climate change in South Asia is far from one size fits all policy implementation. Although floods, drought, changes in temperature and rainfall patterns, storms and other hostile weather conditions are predominant in the region, the impact of climate change varies from one country to the other. This phenomenon calls for country-specific strategies that draw on community-based adaptation to climate change. The mobilization of relevant stakeholders to examine localities, focusing on the distinct needs in such areas in a problem-solving process will prove to be another effective way of adapting to climate change.