BENGALURU, India (AP) — Climate change is affecting water and energy systems in Asia and putting millions of people at risk, forcing countries to invest billions in supporting basic services, according to two recent reports.
Water-related disasters are increasing in the region, even as spending to protect communities is insufficient. Asian nations 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 Monday.
Governments are under increasing pressure to protect the energy systems that people rely on every day. By 2050, extreme weather could leave listed energy companies in the Asia-Pacific with about $8.4 billion a year in damages and lost revenue, a third more than now, according to recent research by the Hong Kong-based non-profit Asia Investor Group on Climate Change and the New York-based MSCI Institute, a sustainability think tank.
These risks have played out across Asia this year as it has been hit by late-arriving storms, relentless rain and severe flooding.
In Quy Nhon in central Vietnam, power lines snapped as Typhoon Kalmaegi blasted the coastal town with heavy rain and strong winds. Flooding from relentless rains left streets submerged chest-deep in water days later, turning entire neighborhoods into islands. The day after the storm made landfall, 29-year-old Hai Duong rushed to a mall that still had power to charge his 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 against the climate
The ADB report says 2.7 billion people, about 60 percent of the population in Asia-Pacific, have access to water for most of their basic needs, but more than 4 billion still remain exposed to unsafe water, degraded ecosystems and growing climate risks.
Much of the progress in 2013 came from major gains in rural water access, it said. Currently, about 800 million people in rural areas have access to piped water, helping many countries move out of the lowest level of water security. India played an important role in this change.
But Asia faces a triple threat: environmental pressures, low investment and climate change, said Vivek Raman, senior urban development specialist at ADB and lead author of the report.
“It’s a tale of two realities,” Raman said.
The report said aquatic ecosystems were rapidly deteriorating or stagnating in 30 of the 50 Asian countries that were studied, affected by uncontrolled development, pollution and land conversion. Asia also accounts for 41% of global flooding, and its coastal megacities and Pacific islands face increasing threats from storm surges, rising sea levels and the push of saltwater inland. From 2013 to 2023, Asia and the Pacific experienced 244 major floods, 104 droughts and 101 severe storms – events that undermined development progress and caused widespread damage.
Governments currently cover only 40% of the estimated $4 trillion investment, or about $250 billion annually, in water and sanitation funding needed from 2025 to 2040. That leaves an annual deficit of more than $150 billion.
Asia’s rapid growth is both an opportunity and a challenge, said Amit Prothi, managing director of the Disaster Resilient Infrastructure Coalition in New Delhi, who was not involved in the report. “The amount of infrastructure we’re going to build in Asia in the next three decades will be as much as we’ve built in the last two centuries. So this is an opportunity to rethink and build in a new way,” he said.
The coalition found that $800 billion in infrastructure, about a third of it in Asia, is exposed to disaster each year globally.
Asia’s power companies lose billions to climate change
Extreme heat, flooding and water shortages are already costing energy utilities in Asia $6.3 billion annually, a figure expected to exceed $8.4 billion by 2050 if companies fail to strengthen climate adaptation measures, research by the Asia Investor Group on Climate Change and the MSCI Institute shows.
Asia accounts for 60% of the world’s power generation capacity and remains heavily 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.
“In general, if you look at the types of impacts and the preparedness of companies, most companies are in very early stages,” said Anjali Viswamohanan, director of policy at the Asia Investor Group on Climate Change.
Its study of 2,422 power plants in China, Hong Kong, India, Indonesia, Japan, Malaysia and South Korea found extreme heat to be the costliest 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 electricity company NTPC, Indonesia’s PLN and Malaysia’s Tenaga Nasional face a high risk of blackouts from rising heat.
Water disturbance is an important factor
Another major threat comes from declining river flows in Asia’s main basins, which supply water for coal- and gas-fired power plants and fuel hydroelectric dams.
At the same time, heavy rains and floods also pose risks, especially in coastal and riverine regions. Malaysia’s Tenaga Nasional faces the highest exposure to coastal flooding due to power plants built in low-lying areas, the report said.
Despite the growing dangers, most utilities lacked detailed and funded plans to adapt to climate impacts. The report found that while nine of the 11 companies studied assessed how climate change affects them, only seven examined the risks at individual plants. Only five have calculated and disclosed how future climate impacts could increase their costs or affect their revenues.
Rapidly changing climate risks make it difficult to predict the costs and insurance needed to protect energy infrastructure, said Jakob Steiner, a geoscientist affiliated with the University of Graz who was not involved in either report.
Financing shortfalls in the energy sector may be easier to address than those in water and sanitation because energy projects can attract strong interest and investment in the industry, he said. But some countries put off by international investors’ demands for environmental protection may turn to regional financiers who are less scrupulous about such concerns.
“For energy infrastructure, I see more hope that the funding gap can be closed,” he said. “But that can also come at a cost.”
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Ghosal reported from Hanoi, Vietnam. Watch Sibi Arasu on X at @sibi123 ___
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