The economic windfall from policies and strategies to combat climate change can be immensely lucrative for South-East Asia. However, losses due to severe economic devastation as a result of climate change can be twice as much, according to a recent study.

The region’s economies can stand to gain around 3.5 percent growth per annum in their gross domestic product (GDP) by promoting green technologies and industries. By promoting enterprises that can help rein in rising global temperatures within 1.5 degrees Celsius of pre-industrial levels, South-East Asia can reap as much as $12.5 trillion by the year 2070, reported Deloitte Economics Institute.

The report from the institute also highlighted that if emissions are not reduced and global temperatures cross 3 degrees more than pre-industrial temperatures, then the region stands to lose over $28 trillion or an annual GDP contraction of 7.5 percent per annum by 2070.

Similar reports, like the one published by the London-based global think tank Overseas Development Institute (ODI) in June, have highlighted how India could lose anywhere from 3-10 percent of its GDP annually as a result of climate change. Climate change would also push back millions into poverty and food scarcity as food grain prices rise and agricultural wages stagnate due to a slower rate of economic growth.

India, present and future

Along with most other economies in the region, India is a heavy user of fossil fuel-based energy, especially highly polluting ones like coal power. Cheap power has been a major factor of growth for the rapidly developing and industrialising economy. But growth has come at the cost of significant emission production. India is the largest polluter in the world even though its per capita emissions are quite low due to the sheer number of impoverished people in the country.

Many South-East Asian countries have made meagre pledges to reduce carbon emissions under the Paris Climate Agreement. India has not even agreed to reach net zero emissions, but only committed to bring down its carbon intensity by relying more on renewable energy.

But changing over to sustainable industrial action can prove to be an opportunity for India, while achieving climate goals with the same stroke of the brush.eco

“We have a narrow window of time, the next 10 years, to make the decisions needed to alter the trajectory of climate change. No one is immune to the impact of climate change, but for India, this is a window of opportunity to lead the way and show how climate action is not a narrative of cost but one of sustainable economic growth," said Atul Dhawan, Chairperson, Deloitte India.

"As India aspires to be a $5-trillion economy, it is not just foreign and domestic investments that will be key in driving growth, we must also take this opportunity to align our ambitions with climate choices," Dhawan added.

While it is true that reducing emissions will not be without their own economic downsides, the cost of not doing anything is far worse. Rising sea levels alone can devastate the Indian economy, with several large cities being on track to becoming fully submerged as a result of global warming

Even less severe scenarios will have a drastic impact on the economy in the region as global warming has a direct bearing on services, manufacturing, retail, tourism, construction, mining and gas sectors that make up more than 80 percent of the entire region’s economy.

“Unmitigated climate change threatens to wipe out decades of hard-won economic growth in South-East Asia,” added Deloitte in its report.

(Edited by : Shoma Bhattacharjee)