Estimating the Cost of Climate Change in the Pacific

By Cyn-Young Park (朴信永)

The effects of global climate change are multifaceted. Pacific nations are highly vulnerable to the impacts, including intensified storm surges, cyclones, and rising sea levels.

The effects of global climate change are multifaceted. Pacific nations are highly vulnerable to the impacts, including intensified storm surges, cyclones, and rising sea levels. Higher global surface temperatures will potentially cause the oceans to warm and expand and the glaciers and ice masses to melt. The resulting rise in sea level will erode coastal areas, make flooding more frequent, and disrupt the delicate balance between ocean dynamics and ecosystems.

The Asian Development Bank (ADB) recently conducted a study, “the Economics of Climate Change in the Pacific” in an effort to assist our Pacific Developing Member Countries (DMCs) in their adaptation planning. The study was carried out at fine scales to provide useful information for local climate-proofing and adaptive actions. It also focused on quantifying the economic impacts of climate change at both national and regional levels by evaluating the potential impacts on key sectors. Here’s a summary of the findings:

  • Average temperatures in the Pacific are expected to rise between 2.0 and 3.5oC above the pre-industrial level by 2070. Climate downscaling shows that annual mean temperatures will increase in both medium and high emissions scenarios. The rise in average temperatures in the Pacific is also higher than the global average temperature rise.
  • Changing climate can alter the historical patterns of rainfall and climate variability as in the case of the El Niño/ Southern Oscillation, potentially causing more extreme weather events in the Pacific. With the increased frequency of El Niño and La Niña, changes in the rainfall patterns could lead to unexpected heavy rains and dry episodes. There may be either too much or too little rain even in the same country, depending on the areas affected.
  • Sea level rise poses a risk of inundation of economically important coastal areas in the Pacific. Although better elevation data are needed for more reliable projections of inundation risk, the impact of sea level rise will put large coastal areas at risk of inundation. Estimates suggest Pacific island countries will face a sea level rise of approximately 0.7 meter by 2100. Air and seaports, road infrastructure, and local communities, all of which are highly concentrated on coastal areas, could be damaged significantly as a result.
  • The effects of climate change on key economic sectors are primarily negative, with potentially large losses in agricultural production. Modeling results, together with the available evidence, point to considerable effects of climate change on key sectors for the economies of the Pacific, with potentially high yield losses for key agricultural products.  
  • The aggregate economic impacts of climate change in the Pacific are negative by 2050 in all scenarios regardless of the model used. The adverse economic impacts are projected to rise further over time to reach between 3% and 13% by 2100 depending on the specifics of scenarios. These potential losses are not negligible and will add to the challenge of achieving long-term sustainable growth and development in the region.
  • Adaptation is inevitable, but substantial investment is needed for adaptation measures in the Pacific. Funding requirements could average $447 million (and reach as high as $775 million) or 1.5% of GDP (and reach as high as 2.5% of GDP) every year until 2050 to prepare for the worst high emission scenario. Based on the mean outcomes of climate simulation for the high emission scenario (i.e. 4.5oC temperature rise and 0.7 meter sea level rise by 2100), adaptation would cost the region $284 million, or 1% of GDP per year until 2050. The adaptation cost would be significantly lower under lower emission scenarios, reaching $253 million per year and 0.9% of GDP.

Climate change is not a stand-alone environmental issue, but a development agenda that needs to be prioritized for Pacific DMCs. Climate change, if not adequately addressed, can overturn the region’s development achievements. Climate change actions have to be integrated into the mainstream of a comprehensive development policy framework which combines various sector approaches and policies and strategies towards achieving climate resilient and sustainable development. In order to do so, national development planning efforts should consider adopting a forward-looking adaptation strategy that can effectively address a wide range of uncertain climate outcomes.