BANGALORE, India (AP) — Climate change is damaging Asia's water and energy systems and putting millions of people at risk, forcing countries to invest billions to strengthen basic services, according to two recent reports.
The number of water-related disasters is on the rise across the region, even as spending on protecting local communities is insufficient. Asian countries will need $4 trillion for water and sanitation between 2025 and 2040 – about $250 billion a year, the Asian Development Bank said in a report released on Monday.
Governments are under increasing pressure to protect the energy systems that people depend on every day. By 2050, extreme weather could cost Asia-Pacific listed energy companies an estimated $8.4 billion a year in damages by about $8.4 billion a year, a third more than now, according to a recent study by Hong Kong-based nonprofit Asia Investor Group on Climate Change and New York-based MSCI Institute, a sustainability think tank.
These risks have played out across Asia this year as it comes under attack from Late storms, incessant rain and severe flooding.
In Quy Nhon in central Vietnam, power lines snapped as Typhoon Kalmaegi battered the coastal town with heavy rain and strong winds. Within days, floods caused by incessant downpours left streets under chest-deep water, turning entire neighborhoods into islands. The day after the hurricane made landfall, 29-year-old Hai Duong rushed to a shopping center where there was still electricity to charge her phone.
“I can't go back because my house is under water. I just want to see if my relatives are safe,” she said.
Asia's water resources must be protected from climate change
The ADB report says 2.7 billion people, about 60% of the Asia-Pacific region's population, have access to water to meet most of their basic needs, but more than 4 billion are still exposed to unsafe water, ecosystem degradation and growing climate hazards.
Much of the progress made since 2013 comes from major improvements in access to water in rural areas, he said. An additional 800 million people in rural areas now have piped water, helping many countries move out of their lowest levels of water insecurity. India has played a big role in this shift.
But Asia faces a triple threat: environmental pressures, low investment and climate change, said Vivek Raman, ADB's chief urban development specialist and lead author of the report.
“This is a story of two realities,” Raman said.
The report says aquatic ecosystems are rapidly deteriorating or stagnating in 30 of the 50 Asian countries studied, suffering from uncontrolled development, pollution and land conversion for other uses. Asia also accounts for 41% of global flooding, and its coastal megacities and Pacific islands face growing threats from storm surges, rising sea levels and saltwater moving inland. From 2013 to 2023, the Asia-Pacific region experienced 244 major floods, 104 droughts and 101 severe storms—events that undermined development gains and caused widespread damage.
Governments are currently providing only 40% of the projected $4 trillion investment, or roughly $250 billion per year, in the financing needed for water and sanitation from 2025-2040. The result is an annual deficit of more than $150 billion.
Asia's rapid growth is both an opportunity and a challenge, said Amit Proti, CEO of the New Delhi-based Coalition for Disaster Resilient Infrastructure, who was not involved in the report. “The amount of infrastructure we will build in Asia in the next three decades will be the same as what has been built in the last two centuries. So this is an opportunity to rethink and build differently,” he said.
The coalition found that $800 billion worth of infrastructure, about a third of which is in Asia, is exposed to natural disasters around the world every year.
Asia's energy companies are losing billions due to climate change
Extreme heat, flooding and water shortages are already costing Asian utilities $6.3 billion a year. That figure is projected to exceed $8.4 billion by 2050 if companies fail to step up climate change adaptation efforts, research from the Asia Investor Group on Climate Change and the MSCI Institute shows.
Asia accounts for 60% of the world's electricity generation capacity and remains deeply dependent on coal. The report warns that climate change threatens both energy security and economic growth in a region where more than 4 billion people need reliable electricity.
“Overall, if you look at the types of impacts and companies' preparedness, most companies are in the very early stages,” said Anjali Viswamohanan, Asia Investor Group's director of climate change policy.
A study of 2,422 power plants in China, Hong Kong, India, Indonesia, Japan, Malaysia and South Korea found that extreme heat is the most costly hazard, responsible for more than half of all losses by 2050. Heat waves reduce the efficiency of power plants and strain transmission networks. India's main power utility NTPC, Indonesia's PLN and Malaysia's Tenaga Nasional face a high risk of disruptions caused by rising temperatures.
Water supply disruptions are an important factor
Another major threat comes from reduced river flows in Asia's major basins, which supply water to coal- and gas-fired power plants and hydroelectric dams.
At the same time, heavy rainfall and flooding also pose risks, especially in coastal and riverine regions. Malaysia's Tenaga Nasional faces one of the highest risks of coastal flooding from power plants built in low-lying areas, the report said.
Despite the growing threat, most utilities did not have detailed and funded plans to adapt to climate impacts. The report said that while nine of the 11 companies studied assessed how climate change was affecting them, only seven examined risks at individual sites. Only five calculated and disclosed how future climate impacts could increase costs or harm their income.
Rapidly changing climate risks make it difficult to predict the costs and insurance needed to protect energy infrastructure, says Jakob Steiner, a geoscientist at the University of Graz who was not involved in either report.
The financing gap in the energy sector may be easier to close than in the water and sanitation sector because energy projects can attract strong industry interest and investment, he said. But some countries, spooked by international investors' demands for environmental guarantees, may turn to regional financiers who are less scrupulous in such matters.
“On energy infrastructure, I see more hope that the funding gap can be closed,” he said. “But it can also be expensive.”
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Gosal reported from Hanoi, Vietnam. Follow Shibi Arasu on X on @sibi123 ___
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