United Nations Economic and Social Commission for Asia and Pacific (UNESCAP), in its flagship publication titled “Economic and Social Survey of Asia and the Pacific 2025”, has raised serious concerns about the macroeconomic impact of climate change in Asia-Pacific region.
The report warns that one-third of countries in the region are facing average annual economic losses of at least 6% of their GDP due to intensifying climate disasters.
Key Highlights of Report
Report Title: Economic and Social Survey of Asia and the Pacific 2025: Understanding the Macroeconomic Implications of Climate Change
Published by: UNESCAP (United Nations Economic and Social Commission for Asia and the Pacific)
Year of Release: 2025
Major Findings:
Climate-Related GDP Losses:
- At least 11 out of 30 countries assessed face AAL (Average Annual Losses) of over 6% of GDP due to climate events like floods, heatwaves, droughts, and tropical cyclones.
- Cambodia suffers the highest AAL at ~11% of GDP.
- Fiji, Myanmar, and Pakistan each have AALs exceeding 7% of GDP.
- Overall average AAL for the region stands at ~4.8% of GDP.
Most Vulnerable Countries Identified:
- Afghanistan; Uzbekistan; Cambodia; Viet Nam; Iran; Mongolia; Kazakhstan; Nepal; Laos; Tajikistan; Myanmar
Main Causes of Vulnerability:
- Frequent and intense climate hazards (floods, droughts, cyclones, heatwaves).
- Weak and fragile infrastructure in disaster-prone countries.
- High economic dependence on vulnerable sectors like agriculture, energy, and manufacturing.
- Rapid urbanisation and unsustainable land-use changes, especially in countries like Viet Nam.
What is AAL (Average Annual Loss)?
- AAL is an estimate of the economic loss per year due to natural disasters, based on probabilistic risk assessments.
- AAL accounts for frequency, intensity, exposure, and vulnerability to hazards.
Implications for Asia-Pacific Region:
- Despite contributing 60% to global economic growth in 2024, the region remains ill-equipped to handle the economic consequences of climate shocks.
- The report highlights a disconnect between economic growth and climate resilience, especially in developing nations.
Recommendations from Report
Proactive Government Interventions:
- Support a transition to higher-income, climate-resilient sectors.
- Invest in climate-proof infrastructure.
Green Industry Development:
- Leverage regional strengths in green technologies and value chains to drive economic growth.
Inclusive Regional Cooperation:
- Foster cross-border partnerships that include both developed and developing economies.
- Align climate action with the 2030 Sustainable Development Goals (SDGs).