Quantifying the Economic Costs of Climate Change Inaction for Asia and the Pacific

Lorenza Campagnolo, Gabriele A. Mansi, Francesco Bosello, and David A. Raitzer

ABSTRACT

This paper uses results from leading biophysical models in an established macro-economic modeling framework to offer insights on potential economic consequences of climate change in Asia and the Pacific. The analysis covers shocks in agriculture, fisheries, forestry, energy demand, capital (from sea level rise and riverine floods), and labor (from heat stress and extreme events). The shocks are considered in a global recursive dynamic computable general equilibrium model that breaks out major economies of the region. The modeling finds that potential total gross domestic product loss as a result of climate change reaches 16.9% in Asia and the Pacific by 2070 under a high-end emissions scenario, with all economies negatively affected. Sea level rise is the largest source of loss, followed by loss of labor productivity due to heat stress. Damage function extrapolation of the losses suggests that they could reach 41.0% of gross domestic product by 2100.