Since a decade now, the world is witnessing significant and growing impact of climate change on economic growth. Events of extreme weather such as floods, droughts, and hurricanes are causing substantial economic losses to the affected countries. The World Meteorological Organisation estimated approximately $1.5 trillion in damages over the past decade. Climate-related disaster losses to only the US were estimated up to $150 billion annually between 2018 to 2022.
While the environmental costs are heavy with devastating damages, the economic losses are also significant and important as these directly affect people and communities.
Economic Impact:
? Agriculture: Heavy rains and floods result in crop failures and reduced yields that threaten food security and the livelihood of people engaged in farming. Mostly these impact regions like South Asia and Africa.
? Infrastructure: Rising sea levels and storms tend to damage infrastructure which displace communities, and the damaged roads disrupt supply chains.
? Labor Productivity: During times of heatwave, it is near impossible to work efficiently for long hours. Hence, this weather reduces working hours, particularly in agriculture as well as in construction, and causes substantial amount of losses.
? Financial Risk: Obviously financial risk is also involved here in terms of insurance policies.
Focus on Developing Economies (South Asia & Pakistan)
Developing economies like those in South Asia, including Pakistan, face more disproportionate impacts. These countries actually bear more brunt of the climate change crisis. Countries face a reduction in growth whereas borrowing cost is high.
Pakistan is among the most unsafe countries considering climate change. Severe impacts are already being observed:
? 2022 Monsoon Floods: Experienced most devastating monsoon floods that affected 33 million people, severely damaged 2 million houses and approximately 4 million acres of crops. Millions of people were displaced. This flood caused 1,700 deaths of humans and also livestock. Economic losses worth $30 billion were estimated.
? Extreme Heat: Temperature exceeded as much as 50°C
in various cities like Jacobabad, according to the Pakistan Meteorological Department (PMD). The high temperature increases heat-related illnesses, primarily heatstroke, dehydration and mortality among children, elderly people, as well as laborers engaged in construction and agricultural farming. Health risks are enormous, like respiratory issues due to air pollution, dengue, and malaria.
? Agriculture & Water Scarcity: Agriculture, being the backbone of the country’s economy, faces declining crop yield leading to food insecurity as well as rural poverty. Water scarcity crisis is a threat to agriculture and drinking water. The World Bank has projected 50% decline in water availability by 2050.
Glaciers and Water Scarcity Issue:
Pakistan has more than 7,000 glaciers which, due to global warming, are melting at a speed. The melting glaciers increase the risk of floods as well as water shortage. Its worst impact has been seen in Gilgit-Baltistan and Khyber Pakhtunkhwa, where floods are caused by Glacier Lake Outburst Floods (GLOFs).
What Needs to be Done:
There are suggestions to switch to Renewable Energy. Pakistan depends on fossil fuels, but a shift to renewable energy will reduce emissions and reduce energy costs as well.
For agriculture farming, water shortage can be overcome when Dams are made and start functioning. If Dams are cost-effective and time-taking, one can always go for small water reservoirs.
Role of Government and Reforms:
? In order to reduce fossil fuel, the Government is investing in solar and wind energy.
? To combat erosion, the plan is to restore forests by initiating the 10 Billion Tree Tsunami programme.
? The Government has also introduced the National Climate Change Policy. To materialize it, the Government is expecting to get a $565 billion funding target by 2035, from International Climate Finance.
To conclude, although it’s a tough road, but with hard work and sincere efforts, things will be controlled.
