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Climate change is damaging Asia’s water and power systems and harming millions of people, according to two recent reports, forcing countries to spend billions of dollars on basic services.
Water-related disasters are increasing across the region, while spending to protect communities is decreasing. Asian Nations will need $4 trillion for water and sanitation between 2025 and 2040 – about $250 billion a year, Asian The development bank said in a report released on Monday.
There is increasing pressure on governments to protect the power systems that people rely on every day. By 2050, extreme weather could cost listed power companies in Asia-Pacific about $8.4 billion a year in lost revenue and losses, a third more than now, according to recent research from the Hong Kong-based non-profit Asia Investor Group on Climate Change and the New York-based MSCI Institute, a sustainability think tank.
These risks loom large across Asia this year as it has been hit by late-season storms, persistent rain and severe flooding.
In Quy Nhon, central Vietnam, power lines were downed when Typhoon Kalmegi lashed the coastal town with heavy rain and strong winds. Flooding caused by persistent heavy rains left streets submerged in chest-high water for several days, turning entire neighborhoods into islands. The day after the storm struck, 29-year-old Hai Duong arrived at a mall that still had electricity to charge her phone.
“I can’t go back because my house is underwater. I just want to see if my relatives are safe,” she said.
Asia’s water resources need climate proofing
The ADB report said 2.7 billion people, about 60% of Asia-Pacific’s population, have access to water for most of their basic needs, but more than 4 billion are still exposed to unsafe water, degraded ecosystems, and growing climate threats.
It says most of the progress since 2013 has come from large gains in rural water access. More than 800 million people in rural areas now have piped water, helping many countries move out of the lowest levels of water security. India played a big role in this change.
But Asia faces a triple threat: environmental pressures, underinvestment and climate change, said Vivek Raman, ADB’s chief urban development specialist and lead author of the report.
Raman said, “This is a story of two realities.”
The report said water ecosystems were rapidly deteriorating or becoming stagnant due to uncontrolled development, pollution and conversion of land to other uses in 30 of the 50 Asian countries studied. Asia accounts for 41% of global flooding and its coastal metropolises and Pacific islands face increasing threats from storms, rising sea levels and inland salt water. From 2013 to 2023, Asia and the Pacific experienced 244 major floods, 104 droughts and 101 severe storms – events that undermined development gains and caused widespread damage.
Governments currently commit only 40% of the estimated $4 trillion investment in funding needed for water and sanitation by 2025-2040, or about $250 billion annually. This results in a shortfall of more than $150 billion annually.
Amit Prothi, director general of the New Delhi-based Coalition for Disaster Resilient Infrastructure, who was not involved in the report, said Asia’s rapid growth is both an opportunity and a challenge. “The amount of infrastructure we build in Asia in the next three decades will be the same as was built in the last two centuries. So, this is an opportunity to rethink and build in a new way,” he said.
The coalition found that $800 billion of infrastructure, about a third of which is in Asia, is exposed to disasters globally each year.
Asia’s power utilities are losing billions due to climate change
Extreme heat, floods and water shortages are already costing Asia’s power utilities $6.3 billion annually, a figure projected to rise to more than $8.4 billion by 2050 if companies fail to strengthen climate adaptation measures, according to research from Asia Investor Group and MSCI Institute on Climate Change.
60% of the world’s electricity generation capacity is in Asia and is highly dependent on coal. The report warns that climate change threatens both energy security and economic development in a region where more than 4 billion people need reliable electricity.
“Overall, if you are looking at the types of impacts and the preparedness of companies, most companies are at a very early stage,” said Anjali Vishwamohanan, policy director at Asia Investor Group on climate change.
Its study of 2,422 power plants across China, hong kongExtreme heat is the costliest threat in India, Indonesia, Japan, Malaysia and South Korea, accounting for more than half of the losses by 2050. Heatwaves reduce power plant efficiency and put pressure on transmission networks. India’s main power utilities NTPC, Indonesia’s PLN and Malaysia’s Tenaga Nasional all face a high risk of disruption due to the rising heat.
Water disruption is a major reason
The second major threat comes from declining river flows in Asia’s major basins, which supply water needed to fuel coal and gas plants and hydroelectric dams.
Additionally, heavy rainfall and flooding also pose risks, especially in coastal and riverine areas. Malaysia’s Tenaga Nasional faces the highest coastal flood risk due to power plants being built in low-lying areas, the report said.
Despite growing threats, most utilities lacked detailed, funded plans to adapt to climate impacts. The report found that while nine of the 11 companies included in the study assessed how climate change impacts them, only seven examined the risks at individual plants. Only five calculated and disclosed how future climate impacts could increase costs or hurt their earnings.
Jakob Steiner, a geoscientist affiliated with the University of Graz who was not involved in either report, said rapidly changing climate risks make it harder to predict the costs and insurance needed to protect energy infrastructure.
He said the funding gap in the power sector may be easier to bridge than in the water and sanitation sector, as energy projects can attract stronger industry interest and investment. But some countries, alarmed by demands from international investors for environmental safeguards, may turn to regional financiers who are less scrupulous about such concerns.
“For energy infrastructure, I see more hope that the financing gap can be closed,” he said. “But it may also come at a cost.”
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Ghoshal reported from Hanoi, vietnamFollow Sibi Arasu at @sibi123 ___
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