Extreme weather is intensifying – is Asia ready?

Asia Pacific nations face mounting climate costs as the world crosses the 1.5°C threshold, with extreme weather driving inflation, disaster risks and a US$815 billion annual financing gap for adaptation and resilience.

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The world has just endured the hottest year and the hottest decade in history. 2024 is likely to be the first calendar year that saw the Earth pushed past a critical 1.5°C warming threshold.

As United Nations secretary-general António Guterres described in his New Year’s message, the world is “facing a climate breakdown in real-time”. In a more recent speech at the World Economic Forum (WEF) in Davos, Switzerland, Guterres called on everyone to fight harder to “get on track”.

This is “especially when what we are seeing today – sea level rise, heatwaves, floods, storms, droughts and wildfires – are just a preview of the horror movie to come”, he said.

Warnings like these should hit harder for Asia, given how the region is heating up faster than the global average

Last year’s World Meteorological Organization (WMO)’s State of the Climate report noted that nine out of 15 nations most affected by extreme weather are in Asia and the Pacific. That Asia will suffer economic costs if it does not address the impacts is also becoming clearer. 

“We must shift from crisis response to forward-looking adaptation strategies that safeguard communities and economies from escalating climate impacts,” Professor Patrick Verkooijen, president of the Global Center on Adaptation, told Eco-Business. 

To meet the looming threats, Asian countries need at least US$1.1 trillion annually to finance mitigation and adaptation measures and disaster-resilient infrastructure. However, the region secures only US$333 billion a year, less than a third of what is needed, according to the International Monetary Fund. This leaves a US$815 billion gap in the region’s disaster preparedness needs – on top of another US$800 billion that Asia lacks in climate financing.

The unmet adaptation cost reaches as high as 2.2 per cent of Cambodia’s gross domestic product (GDP), 1.7 per cent of Myanmar’s economy and 1.2 per cent each of the Philippines’ and Thailand’s GDP.

Consumers in Southeast Asia are also feeling the bite of extreme weather in the form of accelerated inflation. According to a recent report by Oxford Economics, the Philippines has been the most vulnerable, with climate change responsible for a 6-per-cent hike in food prices in the archipelago over the last decade. It is followed by Thailand and Vietnam which saw 5.4 per cent and 4.4 per cent in climate-induced inflation respectively.

“Families across Southeast Asia are already feeling the pinch of rising food costs,” said S Yogendran, senior advisor to the Asean Food and Beverage Alliance (AFBA). “Without coordinated action from governments and industry, achieving net zero targets could make basic nutrition unaffordable for many.”

A study by the AFBA and the Food Industry Asia estimates that each percentage increase in the average annual temperature raises food producer prices by 1 to 2 per cent across Southeast Asia.

Here is a list of what Asia needs to be prepared for in the years to come: 

Knock-on effects

Extreme weather events increasingly disrupt global economies, and the economic fallout can potentially be profound. In 2024 alone, climate-related disasters led to global losses of US$320 billion, according to global insurance provider Munich Re. Asia bore significant costs, with Typhoon Yagi alone inflicting some US$1.6 billion in damages in Southeast Asia and China last September – while claiming at least 829 lives.

Rising climate risks have strained the insurance sector, leading to higher premiums and policy exclusions for vulnerable areas. Allianz, another financial services provider, and WEF estimate that fixed-asset losses for publicly listed companies could reach US$445 billion annually, while heat-related productivity losses are projected to cost US$2.4 trillion per year by 2035. 

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Satellite image shows a typhoon hurtling towards the Philippines’ Eastern coast. Image: NOAA Photo Library, CC BY-SA 3.0, via Flickr.

La Niña season

La Niña, a recurring climate phenomenon characterised by cooler Pacific Ocean temperatures, is set to amplify extreme weather patterns in 2025. Meteorological agencies report a 59 per cent chance that La Niña conditions will persist into early 2025, bringing increased rainfall, flooding and landslides to vulnerable regions.

Warmer ocean temperatures are fuelling stronger and wetter tropical cyclones, with countries like the Philippines disproportionately bearing the brunt of these storms. While La Niña’s short-term cooling effects may slightly offset global warming, WMO warns that long-term warming trends will continue to dominate, exacerbating the severity of extreme weather events.

Rising heat stress

Heatwaves have emerged as the deadliest climate risk, responsible for 489,000 annual fatalities globally. High humidity levels in Southeast Asia exacerbate heat stress, increasing the prevalence of heat-related illnesses and fatalities.

The economic toll is equally concerning. Agriculture, outdoor labour, and weather-dependent industries face severe disruptions. By 2050, heatwaves could result in economic costs totalling US$12.5 trillion and 14.5 million additional deaths globally, according to projections by WEF and management consulting firm Oliver Wyman.

Recognising these risks, Southeast Asian nations are implementing heat action plans. These include urban cooling initiatives, heat shelters, and public awareness campaigns aimed at mitigating the impacts of extreme heat.

Air pollution’s compounding factor

The Global South faces disproportionate impacts from the combination of extreme weather and air pollution. Increased respiratory illnesses, reduced productivity, and strained healthcare systems are among the compounding challenges. The Energy Policy Institute and the University of Chicago’s Air Quality Life Index highlight that air pollution significantly shortens lifespans and imposes substantial economic costs.

Sources of pollution – including wildfires, industrial emissions, and vehicle exhaust – are intensifying, further degrading air quality. Transboundary haze events, particularly those originating from Indonesia’s wildfires, have far-reaching effects on neighbouring countries, exacerbating regional health and environmental challenges.

An annual ranking released by air monitoring organisation IQAir last Friday found Southeast Asian cities among the five most polluted in the world. Vietnam’s Ho Chi Minh ranked second, followed by Cambodia’s Phnom Penh and Thailand’s Bangkok in fourth and fifth position, respectively. In Bangkok, a thick smog this week has forced hundreds of schools to close and caused severe disruption in daily activities. 

As the challenges of 2025 and beyond loom large, experts say governments, industries and communities must work together to implement science-based solutions that address both the root causes and immediate impacts of climate change. Failure to act risks locking the region into a future defined by escalating disasters, economic instability, and deepening inequality.

“The 1.5°C breach shows that the just transition in Asia can no longer be delayed. But for it to be truly just, the people, especially the most vulnerable, must be at the centre of climate policy and decision-making – not the same polluting industries that have led us to this catastrophic breach,” said Norly Mercado, Asia regional director of 350.org.

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