The 2025 United Nations report warns of economic losses in the Asia-Pacific region due to climate change. The report, titled “Economic and Social Survey of Asia and the Pacific 2025,” marks the vulnerability of many developing economies. It was published by the UN Economic and Social Commission for Asia and the Pacific (ESCAP) on April 8, 2025.
Overview of Economic Losses
The report indicates that climate shocks could lead to annual economic losses of at least 6 per cent in one-third of Asia-Pacific countries. These losses stem from extreme weather events, which frequently disrupt economic activities. The findings are alarming, especially since the region accounted for 60 per cent of global economic growth in 2024.
Countries at Risk
Among the 30 countries analysed, 11 are particularly vulnerable to climate risks. These include Afghanistan, Cambodia, Iran, Kazakhstan, Laos, Mongolia, Myanmar, Nepal, Tajikistan, Uzbekistan, and Vietnam. The report puts stress on the need for these nations to enhance their resilience against climate-related economic shocks.
Annual Average Losses (AAL)
The report estimates the average annual loss (AAL) due to climate-related factors as a percentage of GDP. The AAL for the analysed countries is approximately 4.8 per cent of GDP. Cambodia faces the highest AAL at nearly 11 per cent, primarily due to extreme floods and droughts affecting agriculture.
Factors Contributing to Vulnerability
Several factors contribute to the region’s vulnerability. Intensifying climate hazards, such as floods, droughts, and heatwaves, are drivers of economic loss. Additionally, weak infrastructure and rapid urbanisation exacerbate the impact of these disasters. Countries like Fiji, Myanmar, and Pakistan experience heightened losses due to insufficient infrastructure.
Urbanisation and Land Use Changes
Rapid urbanisation and changes in land use increase exposure to climate hazards. Vietnam, for instance, faces intensified vulnerability from coastal flooding and storms due to its urban expansion and land-use changes. These factors necessitate urgent action to mitigate risks.
Recommendations for Sustainable Growth
To ensure sustainable economic growth, the report advocates for proactive government intervention. Such measures should support the transition to more productive sectors. The region is encouraged to harness its strengths in green industries and value chains to drive economic growth.
Importance of Regional Cooperation
Inclusive regional economic cooperation is essential. The report stresses that development needs must be met for both developed and developing countries. This cooperation is vital for securing long-term prosperity in the face of climate change challenges.
Questions for UPSC:
- Estimate the potential economic impact of climate change on agricultural productivity in developing nations.
- Critically discuss the role of infrastructure in mitigating the effects of climate-related disasters in vulnerable countries.
- Analyse the significance of green industries in promoting sustainable economic development in Asia-Pacific.
- Examine the relationship between urbanisation and climate vulnerability in coastal regions.
Answer Hints:
1. Estimate the potential economic impact of climate change on agricultural productivity in developing nations.
- Climate change leads to increased frequency of extreme weather events affecting crop yields.
- Developing nations often rely heavily on agriculture for GDP and employment.
- Variability in rainfall and temperature can disrupt planting and harvest seasons.
- Pest and disease outbreaks may increase due to changing climatic conditions.
- Investment in climate-resilient agricultural practices is essential to mitigate these impacts.
2. Critically discuss the role of infrastructure in mitigating the effects of climate-related disasters in vulnerable countries.
- Robust infrastructure can withstand extreme weather, reducing damage and economic losses.
- Improved transportation and logistics facilitate quicker disaster response and recovery.
- Investment in resilient infrastructure can enhance food security by protecting supply chains.
- Weak infrastructure exacerbates vulnerabilities, as seen in countries like Myanmar and Pakistan.
- Governments must prioritize infrastructure development in climate adaptation strategies.
3. Analyse the significance of green industries in promoting sustainable economic development in Asia-Pacific.
- Green industries can drive job creation while reducing environmental impact.
- Transitioning to sustainable practices can enhance competitiveness in global markets.
- Investment in renewable energy sources can decrease reliance on fossil fuels.
- Green industries contribute to climate resilience by promoting sustainable resource management.
- Regional cooperation in green technology can encourage innovation and economic growth.
4. Examine the relationship between urbanisation and climate vulnerability in coastal regions.
- Rapid urbanisation increases population density, heightening vulnerability to climate hazards.
- Coastal development often leads to habitat destruction and increased flood risks.
- Inadequate urban planning can exacerbate the impact of storms and sea-level rise.
- Urban areas may lack sufficient infrastructure to cope with climate-related disasters.
- Strategies must be implemented to promote sustainable urban development in coastal regions.
