Heading downhill with increasing rapidity is one scenario for the Asia-Pacific region should climate change continue unchecked through to 2050, with annual losses amounting to more than China’s current GDP.
A Deloitte report on climate change’s implications underscores the narrowness of the window available to turn that potential loss into a significant multitrillion-dollar gain for the region.
But the report, Asia-Pacific’s Turning Point, emphasises that the grim scenario of losses that will follow a 2050 2degC temperature rise is by no means a foregone conclusion; a strong climate action response could pay off to the tune of a 7.5% gain in regional GDP, it says.
This potential gain is in stark contrast to the do-nothing approach that initially shaves off US$3.4 trillion (about $5.5 trillion) by 2050 under a 2degC rise, surging to an eye-watering US$16 trillion in 2070 alone under a 2degC rise.
That compares to China’s economy today, which is valued at US$14 trillion. Cumulative losses could total US$96 trillion between now and 2070.
The report says that even if the region manages to meet the target of a 1.5degC minimal increase, its economic growth rate will drop 25% from 4% a year to 3% a year.
Significant amounts of capital will have to be redirected to repairing climate damage rather than investing in new value-added innovations and infrastructure.
Flipping that negative outcome around by taking positive climate action sooner rather than later could deliver a gain of over 50% in annual GDP growth estimates, pushing it up 7.5% by 2070.
A gain of US$47 trillion could be cumulatively added to Asia-Pacific economy by 2070, including an additional US$860 billion added to Australia and New Zealand’s economies, the report says.
The report cites NZ – along with Australia, China and Taiwan – as one of the countries that could gain the greatest GDP surge early on by making bold climate plays between now and 2025.
Many of those gains come from reducing coal use. The Asia-Pacific region accounts for almost half the world’s emissions, with almost half those coming from energy production using coal.
The removal of coal from energy production has the potential to slice 14% off the world’s total emissions.
The report has identified some of the bold early plays being made by countries in the region that would help achieve that upside target.
China’s objective of being carbon neutral by 2060 is cited, along with the lead it holds in growth of renewables and large-scale deployment of solar energy in particular.
South Korea has unveiled plans to commission the world’s largest wind farm, and India has undertaken to build large-scale solar parks.
With regional decarbonising comes the potential to create a valuable export sector, with some future predictions estimating over US$15 trillion will be invested around the world in new sustainable power capacity by 2050.
China is already the largest global exporter of renewable energy products, and South Korea and Japan are chasing strong growth in green energy products.
The cost of not acting and letting temperatures run away will hit those who are currently in their 20s, 30s and 40s the hardest. A vastly more uncomfortable, uncertain world includes fewer hours where work can be done outdoors, disrupted businesses due to storms and disasters, and much capital lost to repair and remediation.