THIMPHU, BHUTAN – Melting glaciers and other climate change-linked extremes pose a serious threat to Bhutan’s economy, and could cause annual losses of over 6% of gross domestic product (GDP) by the end of this century, says a new Asian Development Bank (ADB) climate and economics report for South Asia.

“The country’s slope-dominated agricultural activities and heavy reliance on glacier-fed lakes for hydropower, tourism, and water could face immense challenges in the coming decades without global efforts to slow climate change,” said Bindu Lohani, ADB Vice-President for Knowledge Management and Sustainable Development.

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 annual economic loss of 1.8% of their collective 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, Bhutan would see an average economic loss equivalent to 1.4% of GDP by 2050, widening sharply to 6.6% by the end of the century. But if mitigation and adaptation steps are taken, the damage could be limited to around 1.7% by 2100.

The country’s agriculture sector depends heavily on favorable monsoon conditions, and an expected future rise in temperatures by as much as 4.5ºC could see yearly rice yields in low- altitude growing areas decline by over 22% by the 2080s, undermining food security. At least 24 glacial lakes could also be at risk of catastrophic overflow as a result of ice melts, resulting in floods and landslides that would harm settlements, farms, and the country’s hydropower sector which provides nearly all of Bhutan’s power and almost a third of its revenue. Degradation of the country’s vast river systems would undermine water supplies and tourism, and as temperatures increase, malaria and other vector borne diseases are likely to spread from low-altitude southern regions into higher-altitude areas.

The cost of climate change adaptation measures 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, the region 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 South Asia 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 basis, although in Bhutan’s case it notes that the estimated cost of lowering the level of just one of the country’s dangerous glacial lakes, Thorthomi, is expected to reach $3.45 million. In the energy sector, a rising gap between demand and supply could see Bhutan’s annual adaptation bill nearly triple from over $10 million in the 2030s to nearly $28 million in the 2050s.

The report also details adaptive measures that all countries should consider in response to climate threats, including the use of drought- and flood-resistant crop varieties, increased efficiencies and demand side management in the energy sector, improved disease and vector surveillance and monitoring, and in the water sector more protection of groundwater resources and greater use of recycled water.

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