By 2050, Pakistan’s annual GDP can decline 18-20% due to climate change risks: World Bank

Pakistan’s annual Gross Domestic Product (GDP) could fall by 18 to 20% by 2050 due to the combined risks from the intensification of climate change and environmental degradation in the country if the issues are left unaddressed, a report published by the World Bank said.

“Between 6.5 and 9% of GDP will likely be lost due to climate change (in the optimistic and pessimistic scenarios, respectively) as increased floods and heatwaves reduce agriculture and livestock yields, destroy infrastructure, sap labor productivity, and undermine health,” said World Bank's November 'Country Climate and Development Report (CCDR)'.

Moreover, water shortages in agriculture could reduce GDP by more than 4.6%, and air pollution could result in a loss of 6.5% of GDP per year.

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The CCDR said the risks and possible impacts are a very real threat to Pakistan's sustainable and equitable growth path has been demonstrated by the immediate and likely longer-term costs of the tragic floods of 2022.

“Adverse impacts of climate change on Pakistan's natural and human capital are likely to be severe,” said the report.

It added that climate-related disasters have caused significant loss of life and enough socioeconomic damage to precipitate a reversal of development gains in Pakistan.

“Between 1992 and 2021, climate- and weather-related disasters in Pakistan resulted in a total of $29.3 billion of economic losses from damage to property, crops, and livestock, equivalent to 11.1% of 2020 GDP.

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“The flood in 2010 alone resulted in an adjusted economic loss of 4.5% of 2020 GDP,” said the CCDR report, adding that the full impact of the 2022 monsoon floods on GDP would emerge over time but an early assessment indicates higher impacts than 2010.

The report said climate change will increasingly put pressure on the country’s ability to produce food and access. It will also enhance the impact of air and water pollution on human health. Further, labor productivity is likely to decline across the board because of extreme heat.

“Over time, there is likely to be a partial collapse in the natural systems that underpin Pakistan's economy,” it said.

Moreover, the rising levels of risks from climate change are poised to significantly compromise Pakistan's development ambitions.

“At the macro level, these shocks will impact all aspects of the economy and could have cascading impacts that further dampen growth projections in a country that is already fiscally constrained and that has seen relatively low growth, especially over the past few years.

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“In particular, the agriculture sector is likely to be severely impacted, increasing the risk of extreme poverty, food insecurity, and malnutrition,” said the report, adding that this will make sustained progress in poverty reduction and human development far more challenging than it is today.