Asian Nations Urged to Address Climate Change Impacts on Health and Economy
Introduction:
The World Economic Forum (WEF) is emphasizing the urgent need for Asian countries to revise their investment strategies in response to the adverse effects of climate change on public health. According to the WEF’s Giving to Amplify Earth Action (GAEA) initiative, Asia is currently facing a “health crisis due to climate change,” leading to reduced productivity and escalating healthcare costs. Experts predict that if these health risks are not addressed, Asia’s GDP could plummet by over 25 percent in the next 25 years.
Health Crisis and Climate Change:
Asian workers endure an average of 25 days per year where high temperatures negatively impact their health. The Swiss Re Institute, a risk insurance provider and researcher, estimates that these climate-related health risks could significantly impact Asia’s GDP. This highlights the pressing need for systemic change to combat the adverse effects of climate change on human health.
Labelled Bonds as a Solution:
To address these challenges, the WEF suggests that Asian governments adopt “labelled bonds” as a potential solution. Labelled bonds, including green, sustainable, social, and transition bonds, are specifically designed to finance projects that prioritize global climate and sustainability goals. In 2022, the world issued a staggering $2.2 trillion worth of green bonds, with China, Japan, and Korea accounting for 75 percent of all labelled bonds in the Asian region. Japan plans to issue $16 billion worth of green bonds to fund decarbonization projects, while ASEAN countries are also increasing their issuance of labelled bonds.
Country-Specific Development Plans:
To maximize the impact of labelled bonds, the WEF and ETH Zurich recommend developing country-specific plans tailored to the unique financing needs of green bonds. Thailand and Vietnam, with their growing appetite for renewable energy, hold significant investment potential. Conversely, Indonesia, the Philippines, and Malaysia, which heavily rely on coal, require concerted efforts to transition towards cleaner energy sources. However, the lack of consistent reporting makes it challenging to quantify the positive climate effects resulting from such investments. Nevertheless, labelled bonds can enhance transparency and accountability, accelerating the transition to a net-zero economy.
Coal Dominance and Urgent Action:
Asia is responsible for half of the world’s greenhouse gas emissions, with 80 percent of its energy derived from coal. The region’s economic stability is heavily dependent on proactive measures to mitigate the impacts of climate-related disasters. Despite calls for climate action, Asian countries are increasingly building coal-fired power plants. In 2023, China, Indonesia, India, and Vietnam led in net coal-fired power capacity creation. China, in particular, witnessed significant growth in green bond issuance alongside the establishment of numerous coal-fired power stations. India, too, plans to operate new coal-fired power plants with a combined capacity of 13.9 gigawatts this year. Despite investments in renewable energy, both China and India recognize coal as a cheap and reliable energy source necessary for their economies.
Conclusion:
The urgency to address the adverse effects of climate change on health and the economy is paramount for Asian nations. By adopting labelled bonds and implementing country-specific development plans, these countries can accelerate the transition to a sustainable and resilient future. However, significant challenges remain, including the need for consistent reporting and overcoming the dominance of coal in the energy sector. With concerted efforts and systemic changes, Asia can navigate the climate crisis and secure its long-term economic stability.
