Climate change is intensifying pressures on Asia’s water and power systems, requiring substantial investment to protect communities and infrastructure, according to recent reports.
Asia’s Water Resources Need to Be Climate Proofed
Asian nations will need $4 trillion for water and sanitation between 2025 and 2040 – approximately $250 billion annually, the Asian Development Bank (ADB) said in a report released this week. Currently, governments meet only 40% of this estimated investment, leaving an annual shortfall of over $150 billion.
The ADB report indicates that 2.7 billion people, roughly 60% of the Asia-Pacific population, have access to water for basic needs, but over 4 billion remain vulnerable to unsafe water, degraded ecosystems, and escalating climate hazards. Much of the progress has been made in rural water access, with 800 million more people in rural areas now having access to piped water.
However, Asia faces a “triple threat” of environmental pressures, low investment, and climate change, according to Vivek Raman, principal urban development specialist at the ADB and a lead author of the report. Water ecosystems are deteriorating or stagnating in 30 of the 50 Asian countries studied, due to unchecked development, pollution, and land conversion.
From 2013 to 2023, Asia and the Pacific experienced 244 major floods, 104 droughts, and 101 severe storms, undermining development gains and causing widespread damage. Asia accounts for 41% of global flooding and faces mounting threats from storm surges, rising sea levels, and saltwater intrusion.
Asia’s Power Utilities Are Losing Billions Due to Climate Change
Extreme heat, floods, and water shortages are already costing Asia’s power utilities $6.3 billion annually, a figure projected to exceed $8.4 billion by 2050 if climate adaptation measures are not strengthened, research by the Asia Investor Group on Climate Change and the MSCI Institute shows.
Asia accounts for 60% of the world’s power generation capacity and remains heavily reliant on coal. Climate change threatens both energy security and economic growth across the region, where over 4 billion people need reliable electricity.
Extreme heat is the costliest hazard, responsible for over half of all projected losses by 2050, reducing power plant efficiency and straining transmission networks. India’s NTPC, Indonesia’s PLN, and Malaysia’s Tenaga Nasional all face a high risk of disruptions caused by rising heat.
Disruptions to Water Are a Big Factor
Declining river flows in Asia’s major basins, which supply water for coal and gas plants and fuel hydropower dams, also pose a significant threat. Heavy rainfall and flooding, particularly in coastal and river valley regions, add to the risks.
Malaysia’s Tenaga Nasional faces high coastal flood exposure due to power plants built in low-lying areas. Despite mounting hazards, most utilities lack detailed, funded plans for adapting to climate impacts. Of 11 companies studied, only seven examined risks at individual plants, and just five calculated how climate impacts could affect costs or earnings.
Jakob Steiner, a geoscientist affiliated with the University of Graz, noted that rapidly shifting climate risks make it difficult to predict costs and insurance needs. He suggested that financing gaps in the power sector may be easier to close than those in water and sanitation, but warned that some countries might turn to regional financiers with less stringent environmental safeguards.
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