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While GHG mitigation is essential to preventing global warming from reaching dangerous levels, climate change adaptation is critical to reducing and minimizing the costs, often localized, caused by the unavoidable impacts of GHG emissions already locked into the climate system. Adaptation is particularly important for developing countries and their poverty reduction efforts because the poor—with limited adaptive capacity due to low income and poor access to infrastructure, services, and education—are often most vulnerable to climate change. They generally live in geographically vulnerable areas prone to natural hazards, and are often employed in climate-sensitive sectors, particularly agriculture, forestry, and fisheries, with virtually no chance of switching to alternative sources of income. Thus climate change adaptation, by building adaptive capacity, taking specific adaptation actions in key climate-sensitive sectors, and assisting the poor to cope with climate change impacts, should be a critical part of the development and poverty reduction strategies of every developing country.
B. Climate Change in Southeast Asia
Climate change is likely to be one of the most significant development challenges confronting Southeast Asia in the 21st century. Comprising 11 independent countries1 geographically located along the continental arcs
1 Brunei Darussalam, Cambodia, Indonesia, Lao People’s Democratic Republic, Malaysia, Myanmar, Philippines, Singapore, Thailand, Timor-Leste, and Viet Nam.
Figure 1.1. Atmosphere-Ocean General Circulation Model Projections of Surface Warming
Global surface warming (ºC)
(ºC) -1.0
0 1.0 2.0 3.0 4.0 5.0 6.0
1900 2000 2100
2090—2099 2020—2029
0
B1 A1T B2 A1B A2 A1FI
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 A2
Year 2000 constant concentrations
A2
A1B
B1
A1B B1 20th century
Note: B1, A1T, B2, A1B, A2, and A1FI represent alternative emissions scenarios developed by IPCC. A1 scenario family describes a world of rapid economic growth and population that peaks in mid-century and declines thereafter. Within the A1 family, there are three scenarios characterizing alternative developments of energy technologies: A1FI (fossil fuel intensive), A1B (balanced), and A1T (predominantly non-fossil fuel). B1 scenario describes a world with rapid changes in economic structures toward a service and information economy, the introduction of clean and resource-efficient technologies, and the same population path as in the A1 family. A2 scenario describes a world with slower per capita economic growth, continuously increasing population, and slower technological change than in other storylines. B2 scenario describes a world with intermediate economic development, continuously increasing global population at a rate lower than A2, and less rapid technological change than in B1 scenario (IPCC 2000).
Source: IPCC (2007).
Chapter 1: Background 5
and offshore archipelagos of Asia, the region is widely considered one of the world’s most vulnerable to climate change. Home to 563.1 million people, its population is rising almost 2% annually, compared with the global average of 1.4%. It has long coastlines; high concentration of population and economic activities in coastal areas; heavy reliance on agriculture for providing livelihoods—especially those at or below the poverty lines—and high dependence on natural resources and forestry in many of its countries. As one of the world’s most dynamic regions, rapid economic growth in the past few decades has helped lift millions out of extreme poverty. But the incidence of income and non-income poverty is still high in many countries, and achieving the Millennium Development Goals (MDGs) remains a daunting task. Climate change, if not addressed adequately, could seriously hinder the region’s sustainable development and poverty eradication efforts.
Climate change is already affecting the region. IPCC (2007) reports an increasing trend in mean surface air temperature in Southeast Asia during the past several decades, with a 0.1–0.3°C increase per decade recorded between 1951 and 2000. Rainfall has been trending down and sea levels up (at the rate of 1–3 millimeters per year), and the frequency of extreme weather events has increased: heat waves are more frequent (an increase in the number of hot days and warm nights and decrease in the number of cold days and cold nights since 1950); heavy precipitation events rose significantly from 1900 to 2005; and the number of tropical cyclones was higher during 1990— 2003. These climatic changes have led to massive flooding, landslides, and droughts in many parts of the region, causing extensive damage to property, assets, and human life. Climate change is also exacerbating water shortages in many areas, constraining agricultural production and threatening food security, causing forest fires and degradation, damaging coastal and marine resources, and increasing the risk of outbreaks of infectious diseases.
Southeast Asia, like any other developing region, need to take urgent action to adapt to climate change, build resilience, and minimize the costs of the unavoidable impact of GHG emissions already locked into the climate system.
While adaptation is the priority, the region also has an important role to play in contributing to global GHG mitigation efforts. In 2000, Southeast Asia contributed 12% of the world’s GHG emissions, amounting to 5,187 MtCO2- eq, an increase of 27% from 1990, faster than the global average. On a per capita basis, the region’s emissions are considerably higher than the global average, although still relatively low when compared to developed countries.
The land use change and forestry sector (LUCF) has been the major source of emissions from the region, contributing 75% of total regional GHG emissions in 2000. The other two key sources are the energy sector (at 15%) and the agriculture sector (at 8%), with emissions from the energy sector growing as much as 83% during 1990–2000, the fastest among the three sources.
Southeast Asia needs to explore affordable and cost-effective mitigation measures and to pursue a low-carbon growth strategy.
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C. About This Study
Recent years have seen the emergence of many studies aiming at quantifying the economic impacts of climate change and global warming and assessing costs and benefits of adaptation and mitigation options. Among the most influential is The Economics of Climate Change: The Stern Review (Stern 2007). On the basis of an extensive review of the existing studies (both economic and scientific) on climate change and global warming and modeling exercises using one of the latest integrated assessment models (IAM), the Stern Review concludes that for the world as a whole, an investment of 1% of gross domestic product (GDP) per year is required to avoid the worst effects of climate change. Failure to do so could risk having global GDP up to 20%
lower than it otherwise would be. The Stern Review suggests that climate change threatens to be the greatest and widest-ranging market failure ever seen. It warns that people’s actions over the coming few decades could risk disruptions to economic and social activity, later in this century and in the next, on a scale similar to those of the great wars and economic depression of the first half of the 20th century.
The Stern Review provides a global perspective on the economic effects of climate change and global warming. Since its release, there have been various efforts and initiatives to apply the Stern approach to specific regions and countries. As one such study, this review—The Regional Review of the Economics of Climate Change in Southeast Asia—is carried out as a Technical Assistance Project of the Asian Development Bank (ADB) and funded by the Government of the United Kingdom. Participated by five of ADB’s developing member countries in Southeast Asia—Indonesia, Philippines, Singapore, Thailand, and Viet Nam—its purpose is to deepen the understanding of the economic and policy implications of climate change and global warming in the region. More specifically, the study aims to:
contribute to the regional debate on economic costs and benefits of unilateral and regional actions on mitigation of, and adaptation to, climate change;
raise awareness among stakeholders (for example, government, civil society, academia, media, nongovernment organizations, private sector, and aid agencies) on the urgency of climate change challenges and their potential socioeconomic impact on the study countries; and indirectly support government and private sector actions within the region that incorporate adaptation and mitigation into national development planning processes.
The study covers three main areas that serve as the basis for formulating climate change policies for Southeast Asia: impact assessment, adaptation analysis, and mitigation analysis. Impact assessment looks at how Southeast Asian countries have been and will be affected by climate change individually and collectively. Adaptation analysis then takes up the question of how they could individually and collectively best adapt to climate change and what adaptation options or strategies are needed to be incorporated
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•
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Chapter 1: Background 7
into national sustainable development planning. The mitigation analysis assesses potential mitigation options and how the region can contribute to global GHG mitigation efforts.
The impact assessment, adaptation analysis, and mitigation analysis were carried out through: (i) scoping and literature review of existing climate change studies; (ii) regional, national, and policymaker consultations; and (iii) climate change modeling2 for key sectors. On the basis of these, policy recommendations were formulated for the study countries.
The scoping and literature review covered observed and projected impacts of climate change, GHG emission profiles and trends, adaptation and mitigation practices that have been adopted, and their costs and benefits, where available. The review was based on published and unpublished material at the regional and country level as produced by academics, government agencies, research institutes, international organizations, and nongovernment organizations. These materials also included assessment reports and technical reports published by the IPCC, and National Communications submitted by countries to the UNFCCC. The tasks were carried out by national climate experts engaged by ADB from the respective countries.
The purpose of national and regional consultations is to introduce the study to major stakeholders; agree on its scope and approach; discuss existing knowledge on climate change in the region; review policy developments and initiatives in dealing with climate change at the regional and country levels;
engage government officials in policy dialogue; gather and share information and knowledge; and discuss new findings under this study. From April to November 2008, two regional consultations and five national consultations (in Indonesia, Philippines, Singapore, Thailand, and Viet Nam) were conducted.
In addition, a Senior Policy Dialogue meeting in October 2008 in Bangkok discussed policy recommendations from the study. These consultations were attended by government officials, climate change researchers and experts, representatives of development partners (World Bank, United Nations Economic and Social Commission for Asia and the Pacific, Japan Bank for International Cooperation, Government of the United Kingdom, and others), nongovernment organizations, the private sector, and other stakeholders.
Climate change modeling is based on an integrated assessment framework, using various complementary modules. A bottom-up global energy model that contains the energy supply and energy end-use sectors is used to project future energy mix, the adoption of mitigation technologies, and CO2 emissions under different scenarios. A separate module is used to project non-CO2 and other GHG emissions. A climate model is adopted to estimate future climate change, including temperature rise, precipitation change, sea level rise, and others, based on the projected GHG emissions and concentrations. A sectoral impact module is used to assess the physical impact of projected climate change on the water resources, agriculture, forestry, and health sectors. These modules were developed by the Research Institute of Innovative Technology for the Earth, a contributor to the IPCC Fourth Assessment Report. Consistent with Stern (2007), the study also made use of the PAGE2002 integrated assessment model to project the
2 Modeling by the ADB study team covered only Indonesia, Philippines, Thailand, and Viet Nam.
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economy-wide impact of climate change in monetary terms under different policy scenarios for the study countries.
D. Organization of the Report
The report is organized into four parts and consists of ten chapters. Part I introduces the background of the study (Chapter 1), highlights the unique features of Southeast Asia, and explains why it is vulnerable to climate change (Chapter 2). Part II—Climate Change, Its Impact, and Adaptation—consists of four chapters. It first reviews observed and projected climate change and its impact in Southeast Asia, particularly on water resources, agriculture, forestry, coastal and marine resources, and human health, documented in the existing studies (Chapter 3). It then reports results of an integrated assessment of future climate change and its impact on key climate-sensitive sectors in Southeast Asia using an IAM under alternative scenarios, focusing on Indonesia, Philippines, Thailand and Viet Nam. This is followed by an integrated assessment of future economy-wide impacts of climate change in the region using a more aggregated IAM under alternative scenarios, also focusing on the same set of countries (Chapter 5). The last chapter of Part II examines climate change adaptation options and practices employed in the region and those yet to be employed (Chapter 6).
Part III—Climate Change Mitigation Options and Practices—consists of two chapters. It first examines the measures being practiced in Southeast Asia to reduce GHG emissions and those not yet employed but that could become feasible in the future, and assesses the potential and costs of alternative mitigation measures (Chapter 7). It then assesses the potential and cost effectiveness of mitigation options in the energy sector in the four countries covered in one modeling work (Chapter 8).
Part IV—Policy Responses—consists of two chapters. It first reviews the existing policies, initiatives, and institutional arrangements for climate change adaptation and mitigation, and global and regional financing mechanisms that have been established to address climate change (Chapter 9). It then concludes the report and provides policy recommendations for Southeast Asia to combat climate change (Chapter 10).
References
IPCC. 2000. Special Report on Emissions Scenarios. A Special Report of Intergovernmental Panel on Climate Change (IPCC) Working Group III, Cambridge University Press, Cambridge.
IPCC. 2007. Climate Change 2007: Impacts, Adaptation and Vulnerability.
M. L. Parry, O. F. Canziani, J. P. Palutikof, P. J. van der Linden and C. E.
Hanson, eds. Contribution of Working Group II to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge:
Cambridge University Press.
Stern, N. 2007. The Economics of Climate Change: The Stern Review.
Cambridge: Cambridge University Press.
Key Messages
Southeast Asia is one of the world’s most vulnerable regions to the impact of climate change because of its unique economic and social characteristics, long coast lines, and mostly tropical climate.
It has been one of the world’s most dynamic and fastest growing regions in past decades. But it still faces the daunting task of eradicating income and non-income poverty. The poor are the most vulnerable to climate change impact.
Agriculture remains an important sector—despite rapid economic growth and structural transformation—accounting for 11% of gross domestic product (GDP) in 2006 and providing 43.3%
of employment in 2004. And increasing demand for food and industrial crops has intensified agricultural production and competition for land and water resources.
Much of the region’s growth is also dependent on natural resources, particularly forestry, putting considerable pressure on the environment and ecosystems.
At the same time, urbanization is among the fastest in the world and mostly in coastal areas—with about 80% of the population living within 100 kilometers (km) of the coast—leading to an over- concentration of economic activity and livelihoods in coastal mega cities.