In Asia, the impacts of climate change are not somewhere in the future; they are here and now. The region is already experiencing more frequent and intense typhoons and floods, higher atmospheric temperatures, recurring droughts; and rising sea levels that threaten some of the world’s most populous cities.
Limiting global warming in line with the goals of the Paris Agreement will require Asia to start moving away from fossil fuels long before it reaches the cumulative carbon emissions of Europe and North America. But the region that leads the world in greenhouse gas emissions today must also lead the transition to a lower carbon economy, creating an urgent imperative for governments and companies across Asia to act – and to innovate.
Biggest source of emissions
Asia accounts for more greenhouse gas (GHG) emissions than any other region: China alone has contributed 60 per cent of the increase in greenhouse gases since 1990 and is the world’s largest carbon emitter today. The region’s longstanding dependence on coal-fired power plants to drive rapid economic growth is a major obstacle to cutting emissions.
For the world to achieve the Paris Agreement’s goal of keeping global warming to 2oC or lower by 2050, Asian countries must make substantial changes to their energy policies. At the same time, the region’s many developing countries must continue to raise standards of living by reducing poverty and building new physical infrastructure.
Governments and companies respond
Some of the region’s biggest economies are rising to the challenge of balancing growth and climate goals. China has pledged to reach net zero emissions before 2060, while Japan and South Korea have pledged to reach carbon neutrality by 2050.
But while governments set policy, companies must play their part in reducing emissions – and many see opportunity in doing so. Globally, 86 per cent of companies expect a greater focus on sustainability to boost their sales, with three quarters of companies setting sustainability targets, according to HSBC Navigator.1 And manufacturers in Asia, often described as the world’s factory floor, may also face growing expectations from the international companies they supply when it comes to their environmental performance: sustainable supply chains are increasingly important to global brands.2
Of the 20 global cities most vulnerable to rising sea levels, 15 are in Asia. According to NASA, sea levels could rise 65cm by the end of this century, leaving some 200 million people homeless, with the largest proportion expected to be in Asia.
While the seas are rising, some Asian cities are sinking. This phenomenon is aggravated by tapping groundwater from underlying aquifers. North Jakarta has sunk 2.5 metres in the last decade and the government will pay USD33 billion to mitigate the impacts. Manila is sinking 10cm a year, increasing its vulnerability to typhoon-driven storm surges and rain.
The sea’s absorption of rising atmospheric heat drives more frequent and intense storms. The Philippines is experiencing increased typhoon frequency while Bangladesh and India endure alternating floods and droughts. Typhoons affecting the subcontinent could become 15 per cent more intense by end of the century.
Climate change makes land degradation and desertification worse. For every 1°C increase in temperature, crop yields shrink by 10 per cent. India, China and Southeast Asian countries are all vulnerable.
This has implications for inflation and development. Food inflation due to disruptions in supply affects the bottom 20 per cent of the population most. India’ s 370 million poor people face the combined impacts of rising food prices and falling farm incomes: higher temperatures and shifting rainfall patterns could cost India 2.8 per cent of GDP per capita by 2050.
In China, the growing period for rice is reduced by 7-8 per cent for every 1oC average temperature rise, while winter wheat’s growth season shrinks by an average of 17 days. Overall, China’s agricultural productivity potential could fall by up to 10 per cent by 2030, with wheat, rice and corn all depressed to some degree.
Reach for renewables
Burning coal to generate electricity is the main source of the region’s greenhouse gas emissions. Globally, this activity accounts for 46 per cent of all CO2 emissions – and Asia is responsible for 72 per cent of global coal-based electricity generation. The region relies on coal for 61 per cent of its electricity.
A rapid shift towards generating power from renewable energy sources would help Asia deliver the emissions cuts essential to achieving the Paris goals. While the initial development costs are high, operating costs over the life of the facility are attractive.
Different economies within the region have the potential for a variety of alternative energy sources. Japan has conditions that favour offshore wind, for example, while Indonesia has the richest geothermal resources in the region. In both China and India, solar is the cheapest source of new bulk electricity generation.
The collapse of energy consumption during 2020’s Covid-19 pandemic has demonstrated the impact of reduced emissions on air quality in many Asian cities. It has also given policymakers the opportunity to reconsider their energy infrastructure planning. India and Vietnam have both made moves in this direction: the Vietnam Energy Institute has suggested cancelling seven planned coal projects and postponing six more, while two thirds of new Indian capacity introduced in the last fiscal year was from renewable sources.
2 HSBC and Walmart partner to drive sustainability of businesses