Impacts of Climate Change

on
Economy
- Uddhav Raj Nepal
Climate Change puts us all in the same boat. One hole will sink us
all.
- Kofi Annan
 A fact to begin with

Climate Change is already contributing to the deaths of

nearly 400,000 people a year and costing the world more
than $1.2 trillion, wiping 1.6% annually from global
GDP.
Losing Human Resources
Impacts felt most keenly in developing countries
Damage to agricultural production from extreme weather linked events linked to
climate change is contributing to deaths from malnutrition, poverty and their associated
diseases.
Air pollution caused by the use of fossil fuels is also separately contributing to the
deaths of at least 4.5 m people a year.
A 1C rise in temperature is associated with 10% productivity loss in farming.
For us, it means losing about 4 million tons of food grain, amounting to about $2.5
bn. That is about 2% of our Gross Domestic Product (GDP). Adding up the
damages to property and other losses, we are faced with a total loss of about 3-4%
of GDP. Without these losses, we could have easily secured much higher growth.
- Sheikh Hasina, Prime Minister of Bangladesh
Bangladeshi villagers rebuild an embankment after cyclone Alia hit in 2009. Bangladesh
faces total losses of about 3-4% of GDP due to climate change.
Increased Pressure on Food Production

The quantities and quality of fresh water available will lessen in dry regions and
increase in high latitude.
The current rate and magnitude of ocean acidification is faster than any event within the
last 65 million years.
Decline of pollinators like bees
Reduction of yield of staple crops like wheat, rice and maize, the decline expected to
reach to 25% by 2050
Areas suitable for the cultivation of coffee, tea and cocoa, which support millions of
smallholders in more than 60 countries, will significantly shrink.
Droughts in Russia in 2010 and the U.S. in 2012 led to major crop
failures, a spike in prices and social unrest. The 2010-11 food price
spike is estimated to have pushed around 44 million people below
the basic-needs poverty line across 28 countries.
Ripples through the Global Economy
With more than half of afternoon hours projected to be lost to the need for rest
breaks in 2050 in South East Asia, we may see up to a 20% loss in global
productivity in 2100 under a business-as-usual scenario.
The physical impacts of climate change include increased risks to population
centers and assets in coastal zones from sea-level rise and storm surges.
Agricultural commodity prices will likely be higher and more volatile due to
changes in agriculture patterns.
Redistribution of marine fisheries catch potential toward higher latitudes poses
risk of reduced supplies, income and employment in tropical countries, with
potential implications for food security.
Everyone is Vulnerable
"Asia is the most vulnerable continent to climate change, but it is not just
developing countries in the region which are affected. Japan is already
experiencing climate change and faces severe risks if action is not taken.
Japan imports about 60 percent of its food from overseas, thus climate
impacts, like poor crops yields in other countries, will boost the price of
food here with inevitable negative consequences on our economy. This
is not an issue somewhere far away, but an issue for us here.

- Kimiko Hirata, international director of the Kiko Network, a Japanese

NGO
Impacts in Nepal
By the 2070s, net agricultural losses in Nepal are estimated to be the equivalent per
year of around 0.8% of current GDP, or US$140 million/year in current prices. The
impacts were much more severe in years of extreme rainfall variability.
Change in intensity and frequency of high flow events and associated floods.
The direct annual economic costs of climate change on water-induced disasters at a
national level were estimated to be an additional US$100200 million/year or
equivalent to 0.61.1% of current GDP per year by mid-century in current prices.
"The world, in many cases, is ill-prepared for risks from a
changing climate ... There are opportunities to respond to
such risks, though the risks will be difficult to manage
with high levels of warming."