Bangladesh Could See Climate Change Losses Reach Over 9% Of GDP - Report

News Release | 19 August 2014

DHAKA, BANGLADESH – Low-lying Bangladesh is at the front line of at-risk countries from climate change and could suffer annual losses of up to 9% of its economy by the end of this century, says a new Asian Development Bank (ADB) climate and economics report for South Asia.

“Vast crop losses, disappearing arable land, displaced communities, poisoned groundwater—this is not a horror tale but a very real possibility in future unless current destructive global resource use patterns are changed,” said Bindu Lohani, ADB Vice-President for Knowledge Management and Sustainable Development. “The expected rise in frequency and severity of extreme climate events calls for wide-ranging action including stepped up safety net programs for the poor who are most at risk.”

The report, titled Assessing the Costs of Climate Change and Adaptation in South Asia, predicts the six countries—Bangladesh, Bhutan, India, the Maldives, Nepal, and Sri Lanka—will see an average economic loss of around 1.8% of their collective annual gross domestic product (GDP) by 2050, rising sharply to 8.8% by 2100 if the world continues on its current fossil fuel-intensive path.

Without changes to current global behavior, Bangladesh would see annual economic costs equivalent to 2% of its GDP by 2050, widening to 9.4% by 2100. But if global mitigation actions are successfully implemented, those losses could be limited to just over 2% by 2100.

In Bangladesh, where agriculture employs nearly half the labor force, a rise in extreme floods, cyclones and droughts, heat stress, and shorter growing seasons could slash yields of rice, wheat, and potato by over two thirds of current levels in some cases–threatening food security. A coastal zone of more than 47,000 square kilometers, providing homes and sustenance to a fast-growing population of over 36 million, will face more storm surges and a projected sea level rise, which will worsen erosion and soil salinity and engulf increasingly large chunks of productive, densely populated areas of land.

The division with the largest area permanently affected by a 1-meter sea level rise will be Khulna, while Dhaka could see up to 14% of its territory temporarily inundated, and its large population facing the greatest risks. More extreme weather events will also damage forests, wetlands, and the world’s largest mangrove forest, the Sundarbans, which provides income and nutrition to millions of people and a cushion against rural poverty.

The costs of adapting to climate change in South Asia will depend largely on how the global community tackles the issue, the report says, noting that if the world continues on its current path, South Asia will need to spend at least $73 billion, or an average of 0.86% of its GDP, every year between now and 2100 to adapt to the negative impacts. On the other hand, if countries act together to keep the rise in global temperatures below 2.5°C, the cost of the region shielding itself from the worst of the impacts would be nearly halved to around $40.6 billion, or 0.48% of GDP.

The report does not provide detailed adaptation cost projections on a country or sector basis, although in the energy sector it notes that a rising gap between demand and supply could see Bangladesh face an annual adaptation bill of over $89 million in the 2030s, rising to over $363 million in the 2050s.

The report also details adaptive measures that the country could take to protect its sensitive agriculture sector, including the introduction of drought-, flood- and saline-tolerant crops, crop and aquaculture diversification, more capture and use of surface water for irrigation, more flood resistant infrastructure for riverbanks, raised earth beds for seasonal vegetable cultivation, and the adoption of alternative livelihood options including community-based fisheries and duck rearing.