A World Bank economist has signaled the urgency of climate change adaptation and mitigation measures in order to shield the Philippine economy from slower growth that could bring about higher economic and human costs to the needy and marginalized sectors.
Souleymane Coulibaly, World Bank lead economist, said climate shocks would erode natural and physical capital, as well as reduce labor productivity, thereby adversely affecting the country’s economic growth. He cautioned, too, that the government’s financial capability would be strained, and that domestic and external competitiveness could be impaired.
World Bank estimates on the economic costs of climate change were derived from typhoon information. As a climate-vulnerable country, the Philippines bears the brunt of an average of 20 typhoons a year, with losses and damages in the past decade amounting to a 0.5 percent loss in the country’s Gross Domestic Product (GDP).
Vice Chairman and Executive Director Robert E. A. Borje of the Climate Change Commission — a body chaired by President Ferdinand Marcos, Jr. — has pointed out the need for climate equity and climate justice to climate vulnerable countries. According to Germanwatch, world-recognized publisher of the Global Climate Risk Index, the Philippines is ranked fourth most vulnerable country to climate change.
This explains the country’s preeminent position as an authoritative and influential voice among Climate Vulnerable Countries (CVC). During COP 21, the 21st Conference of Parties to the United Nations Framework Agreement on Climate Change, the Philippines headed this group. Thus, then President Benigno S. Aquino III chaired a special forum at which the CVCs weighed in on their proposals that facilitated the crafting of the historic Paris Agreement of 2015. After decades of stalemate, the countries of the world finally agreed to limit the emission of greenhouse gases in order to mitigate global warming and reduce the frequency and strength of typhoons and floods in the CVCs.
Climate shocks would drag down the government’s poverty reduction effort, whose metrics mainly depend on economic growth and income distribution, according to the World Bank. The average output losses of the Philippines due to climate change will be at 3.2 percent of gross domestic product (GDP) by 2030 and could further rise to 5.7 percent by 2040.
Under the much worse scenario, the World Bank estimated that the costs of climate shocks could amount to 7.6 percent by 2030 and 13.6 percent by 2040. “As illustrated by this figure, you can see the poor would suffer the most. The poorer the households, the more negatively the consumption is estimated to be affected by climate change,” Mr. Coulibaly said.
While the cost of climate adaptation could be substantial, this is easily outweighed by the more significant economic benefits. To illustrate, the cost of making vulnerable new infrastructure in the Philippines climate resilience is estimated to be about 0.6 percent of GDP annually, at level with the cost of improving climate resilience in the agricultural sector.
The clarion call to the citizenry from the Climate Change Commission should be heeded: “Today is an opportunity to get things right: to secure climate equity and justice for all.”