World Bank issues warning about looming economic crisis that could cost billions: 'Productivity losses'

A new World Bank report warned that Thailand could face $1 billion in annual losses by the mid-2040s without swift climate action.

As The Nation Thailand explained, the report found that by 2050, the country could lose 7-14% of its gross domestic product if it does not act to prevent damage from worsening natural disasters driven by rising global temperatures. The main threats to Thailand's economy include "heat-related labor productivity losses, increased flooding in economically vital areas, water scarcity, and coastal erosion impacting tourism," per the outlet.

Thailand is among the nations with the highest flood risk worldwide, and in 2011, it experienced economic losses equivalent to 12.6% of its GDP. If the necessary actions aren't taken to mitigate flooding risks, this could recur.

However, the report found that by 2050, heat-related productivity losses will likely affect GDP more than flooding. In Bangkok, a 1 degree Celsius (1.8 degrees Fahrenheit) rise in temperature could cost the economy 85-123 billion baht ($2.6-3.8 billion) via heat-related deaths, higher energy use, and labor losses.

Coastal erosion is another major climate issue plaguing Thailand, affecting around 30% of its coastline. Without adaptation efforts, it could reduce revenue from the tourist industry by $1 billion.

Why is climate inaction concerning?

If Thailand fails to enact proper adaptation and mitigation measures, it could endanger millions of lives, properties, industries, and infrastructure. Since the nation is already experiencing the impacts of the changing climate, inaction to reduce the worst effects of extreme weather could be disastrous for the safety of its citizens and the country's growth.

Just last year, dozens of people died in heavy rain events that cost the economy over $7 billion. Bangkok is especially vulnerable to flooding since it's located in a low-lying delta, and experts say a significant portion of the city could be underwater by 2030 "without concrete measures to reduce carbon emissions," according to Asia News Network.

On the other hand, smart investments in green technologies could boost Thailand's economy and safeguard communities.

"Investments in flood mitigation, water security, coastal protection, climate-smart agriculture, and cooling could raise annual GDP by 2-3% by 2040 and by 4-5% by 2050 compared with a business-as-usual scenario whilst protecting people and reducing the risks of extreme events," Kim Alan Edwards, World Bank senior economist and the report's lead author, said.

While addressing rising global temperatures is expensive, ignoring it would cost even more, according to the report. It is estimated that climate mitigation would cost Thailand $219 billion over the next 25 years, or roughly 2.4% of its GDP. Compared to potential losses of 7-14% of GDP, that is a drop in the bucket. More importantly, it will save lives.

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Similar research by the University of Cambridge climaTRACES Lab found that if the global average surface temperature rises by 5.4 F (3 C) by 2100, economic output could decline 15-34%. However, investing just 1-2% of the global GDP in climate mitigation measures would keep warming below 3.6 F (2 C).

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