Asia as a region faces extreme hazards from climate change including flooding, drought, severe typhoons as well as conditions of rising heat and humidity, according to a new report from the McKinsey Global Institute.

“Asia faces climate hazards with potentially severe socioeconomic impacts, and thus has a keen interest in playing a front-line role in addressing the challenges,” Jonathan Woetzel, a director at McKinsey Global Institute who is leading the research, said in a statement.

The research outlines the scope of potential impact climate change may have on Southeast Asian nations and South Asia countries, including Bangladesh, India and Pakistan.

Between $2.8 trillion and $4.7 trillion of GDP in Asia on average will be at risk annually from a loss of effective outdoor working hours because of hotter temperature and more humid environment by 2050, the report said.

Southeast Asia potentially will face more severe consequences of climate change than other parts of the world, according to McKinsey.

The coronavirus pandemic is “highlighting the importance of risk and resilience to lives and livelihoods, and as the world focuses on recovery, it is important to not lose sight of the role that climate plays,” said Woetzel.

In addition to the impact on Southeast Asia, the research also outlines the potential impact of extreme weather on countries like Bangladesh, India and Pakistan — a region they termed “Frontier Asia.”

“We estimate that by 2050, between 500 million and 700 million people in Frontier Asia could live in regions that have an annual probability of a lethal heatwave of about 20 percent,” said the report.

Coastal flooding made worse by rising sea levels is a severe risk around the world and reports have estimated trillions of dollars could be on the line from damaged assets in the future. Flooding not only damages infrastructure but sometimes contaminates sources of drinking water.

By 2050, between $2.8 trillion and $4.7 trillion of gross domestic product in Asia will be at risk every year from a loss of effective outdoor working hours due to higher temperatures and humidity, according to the report.

Asian countries with lower levels of per capita GDP would be at most risk and the poor will be hit hardest, the McKinsey report said. That’s because they are more exposed to extreme climates than the wealthy, relying more on outdoor work and natural capital, and may have fewer financial means to adapt.

McKinsey also highlighted some of the potential climate hazards that countries in Southeast Asia face. They were referred to as “Emerging Asia” in the report, and consist of Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Thailand and Vietnam.

Countries in the region are set to experience an increase in heat and humidity. By 2050, in an average year, anywhere between 8% and 13% of GDP could be at risk in those countries due to rising heat and humidity.

Chances of extreme precipitation could increase three- or four-fold by 2050 in Indonesia.

While flooding is a common occurrence in Vietnam’s Ho Chi Minh City, resulting infrastructure damage could mount up to between $500 million and $1 billion by 2050, with knock-on costs ranging between $1.5 billion and $8.5 billion.

One advantage that Southeast Asia, and more broadly many developing parts of Asia, has is that infrastructure and urban areas are still being built, McKinsey said. That gives countries a chance to build infrastructure that is more resilient to extreme climate changes and can withstand severe events.

“Like all parts of the world, Asia can also contribute to reducing emissions; climate science tells us that further warming will continue until net-zero emissions are reached,” the report said.

“If policymakers and business leaders can harness the region’s innovative spirit, talent, and flexibility, Asia could lead a global response to climate risk by adapting and by mitigating the most severe potential consequences,” it added.

The researchers used the ‘Four Asias’ framework to contextualize climate hazards, their socioeconomic impacts, and potential responses.

Frontier Asia - This analysis consists of Bangladesh, India, and Pakistan. All three countries could see extreme increases in heat and humidity, which may significantly affect workability and livability. For example, by 2050, Frontier Asia could face an increased likelihood of lethal heatwaves than the rest of Asia. The study estimates that by 2050, between 500 million and 700 million people in Frontier Asia could live in regions that have an annual probability of a lethal heatwave of about 20 percent. Rising heat and humidity could also affect human beings’ ability to work outdoors, as they tire more easily or need more breaks. Climate change would also have the biggest negative impact on Asian crop yield in this group of countries.

Emerging Asia - This analysis consists of Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Thailand, and Vietnam. These culturally diverse countries see a high share of regional trade, capital, and people flows, and are a major source of labor. Like Frontier Asia, they are expected to see increases in heat and humidity. By 2050, in an average year, between 8 and 13 percent of GDP could be at risk as a result of rising heat and humidity. The region could also experience growing exposure to extreme precipitation events and flooding.

Advanced Asia – This analysis consists of Australia, Japan, New Zealand, and South Korea. Overall, these countries are expected to see slightly lower impacts of climate change along many dimensions than Frontier Asia and Emerging Asia countries. For some countries in the region, the impact on water supply and drought are the main challenges. Typhoon and extreme precipitation risk could also increase in some parts of Japan and South Korea.

China is large and distinct enough from other parts of Asia to sit in its own category. The country on aggregate is projected to become hotter. In addition, eastern parts could see threats of extreme heat, including lethal heatwaves. Central, northern, and western China could experience more frequent extreme precipitation events. In the country overall, the average share of outdoor working hours lost each year to extreme heat and humidity would increase from 4 percent in 2020 to as much as 6 percent in 2030 and 8.5 percent in 2050.