The impact of climate change is likely to slash the Philippines’ gross domestic product (GDP) by as much as 13.6% by 2040 if there is no action by the government and private sector, the World Bank said.
“Damages from climate change are a threat to the Philippine economy. It is likely to reduce GDP substantially, but the range of possible outcomes is wide,” World Bank Lead Economist Souleymane Coulibaly said at a briefing on its Philippines Country Climate Development Report.
Mr. Coulibaly said World Bank estimates showed the Philippines may see a 3.2% average loss in GDP by 2030, and as much as a 5.7% loss in GDP by 2040.
“However, the impact could be much worse reaching 13.6% in 2040 if no actions are taken…with the worst effects in capital-intensive industries,” he added.
World Bank Country Director for the Philippines Ndiame Diop said that the Philippines is “uniquely vulnerable” to climate change.
“In 2022, the Philippines ranked number one among the countries most affected by extreme weather events…climate change is often called a silent crisis, but in the Philippines, it is not silent. It’s an imposing problem and a real threat,” he added.
Climate-related hazards have caused P506.1 billion in losses and damage to the Philippines over the past decade, the Department of Finance (DoF) said last year.
Signs of climate change can be seen through rising temperatures, longer and more intense droughts, more severe tropical storms and increasing sea levels.
The Philippines is struck by around 20 tropical cyclones every year, but has seen much stronger typhoons in recent years.
“Temperatures in the Philippines will continue to rise by the end of the 21st century. Rainfall patterns will change and intensify, and extreme weather will become more frequent. Without action, climate change will impose substantial economic and human costs, affecting the poorest households the most,” Mr. Diop said.
Stefano Pagiola, World Bank senior environmental economist, said climate change poses major risks for development in the Philippines and that policy inaction would result in substantial economic and human costs, especially for the poor.
“These will hamper economic activities and development…adaptation is a priority for the Philippines. It is not just reducing risk and damage but addressing slow onset events like sea level rising,” he said.
In the report, the World Bank noted the Philippines has taken action against climate change but this has been mostly “uneven.”
“Responsibilities over climate action are often dispersed and duplicative, policies are partially implemented, and there is no capacity or resources from local government units,” Mr. Pagiola said.
Agriculture, which contributes around a tenth of GDP, is one of the most vulnerable sectors against climate change, he added.
“It is affected directly by temperature changes and direct damage by typhoons. Because of climate change, productivity of many crops will decline. Rain-fed crops are most affected, such as rice, sugarcane, and maize,” Mr. Pagiola said.
The Philippines should adopt climate-smart agriculture practices, but this would depend on whether or not this is financially attractive for farmers, he added.
According to Mr. Coulibaly, the Philippines’ early adaptation can reduce the impact of climate change on the economy. “Measures to adapt to climate change will reduce economic losses by two-thirds,” he said.
World Bank economists said the Philippines should ramp up efforts to reduce emission levels.
The Philippines has committed to reduce greenhouse gas emissions by 75% from 2020 to 2030.
“Mitigation measures could be associated with a positive impact on GDP if carbon tax revenues are used for investment. The GDP could increase by about 0.5% and generate about 80,000 jobs in 2040,” Mr. Coulibaly said.
He noted there is a need for public and private investments to finance climate-resilient infrastructure and accelerate the adoption of green technologies.
“On the private side, issuing environmental social and governance bonds under the recently introduced Sustainable Finance Framework (SFF) could leverage private financing for climate actions,” he added.
Socioeconomic Planning Secretary Arsenio M. Balisacan, who also heads the National Economic and Development Authority (NEDA), said there is a need to integrate climate action in the country’s development plans.
“Perhaps no other issue is more important — none more existential and critical to humanity’s future, at least, at this point in history, than climate change,” he said in a pre-recorded message.
“The Philippines also has a running ecological deficit, wherein our ecological footprint goes beyond our area’s natural capacity. If we do not get our act right soon, more communities will be routinely displaced, more economic activities disrupted, and more agricultural systems devastated due to these extreme, climate change-induced weather conditions,” he added.
Mr. Balisacan said the upcoming Philippine Development Plan for 2023-2028 includes priority actions for a “greener economy and more sustainable, affordable, and livable residential areas by 2028.”
“Examples of such priority actions will include mechanisms involving carbon pricing and incentivizing local government units to focus on more climate-friendly projects, such as electric vehicles, sustainable tourism, biodiversity protection, and energy efficiency,” he added.
Source: ABS news