While all 10 markets in this study need to adapt, the cost of inaction differs depending on level of development and resilience
Estimated economic benefit from every dollar invested
10x
Estimated minimum investment required between now and 2030, in a 1.5°C scenario
USD1.2bn (0.29% of 2021 GDP)
Estimated cost of inaction between now and 2030 (avoided climate damages and missed GDP growth)
USD11.6bn
Estimated minimum investment required betweennow and 2030, in a 3.5°C scenario
USD1.9bn (+58% compared to 1.5 °C)
Bangladesh only accounts for a tiny proportion of global emissions, yet among our 10 focus markets, it is one of the markets most at risk from climate change. In 2022 the country suffered its worst floods in more than a century, in which millions of people were displaced.
Even under a 1.5 °C warming scenario, Bangladesh is highly susceptible to damages such as river, flash and coastal flooding – incidents which will be exacerbated by higher temperatures leading to more concentrated rainfall and rising sea levels. However, protection from heavy rainfall and flooding requires high levels of funding to be effective.
Areas identified as a focus for adaptation in Bangladesh include the adoption of sustainable agriculture practices and improved water resource infrastructure. The government – with help from the World Bank – has been working on flood protection barriers and upgrading drainage facilities, as well as crop cultivation to combat climate-related food scarcity, and improved data management and use.
Bangladesh has also been focusing on developing early warning systems to mitigate the impacts of flooding, such as the Community Flood Information System, which can help communities to prepare and protect their crops and livestock.
14x
USD8.1bn (0.05% of 2021 GDP)
USD111.9bn
Estimated minimum investment required between now and 2030, in a 3.5°C scenario
USD17.3bn (+114% compared to 1.5 °C)
In the summer of 2022, China suffered its worst drought on record, caused by weeks of extreme temperatures and record low rainfall. The IPCC has predicted increased drought risks for western China over the coming decades, hitting the agriculture sector hardest, although parts of China have also been dealing with heavy rainfall and flooding.
Despite these vulnerabilities, China is one of the markets in our study less at risk of climate damage under a 1.5 °C warming scenario, explaining its relatively low requirement for adaptation investment as a proportion of GDP. At the same time, China’s economic strength and historically strong investment in climate adaptation drives an economic benefit of USD14 for every one dollar invested – one of the highest in our study in our study.
In its National Climate Change Adaptation Strategy, published in June 2022, the Chinese government has committed to addressing rising flood risk (from rising coastal sea levels). This includes strengthening monitoring at rivers and lakes to boost flood control and improve water supply security, and reforming water prices and imposing binding consumption targets in selected regions over the next decade.
USD900mn (0.22% of annual GDP)
USD8.6bn
USD2.3bn (+156% compared to 1.5 °C)
Egypt is very vulnerable to climate change, with projected increases in extreme weather events such as heat waves, flash flooding, and sand and dust storms. With 95 per cent of Egypt’s population[1] living on the banks of the Nile and in the Nile Delta, the Egyptian economy is vulnerable to sea level rise leading to the destruction of property and disruption of infrastructure. The increase in storms, flooding and heat waves is also predicted to contribute to a reduction in agricultural productivity.
Egypt would need to invest a minimum of USD900 million by 2030 to adapt to climate damages as they occur. However, this would prevent economic damages and loss of growth of almost ten times that amount – or USD8.6 billion.
According to the World Bank, Egypt’s climate adaptation response needs to focus on closing data and information gaps, and strengthening environmental monitoring capabilities. The country also needs to protect its coastline, investing in risk assessments and exploring adaptation options. In addition, climate-smart agriculture and risk management in the agricultural sector have been identified as key areas, alongside more effective land use, resource management and early warning systems to improve water management techniques.
[1] Anatomy of the Nile | National Geographic Society
13x
USD10.6bn (0.33% of 2021 GDP)
USD135.5bn
USD17.0bn (+60% compared to 1.5 °C)
India is exposed to an array of extreme weather events such as heat waves, cold waves, cyclones, flooding and landslides. About 80 per cent[1] of India’s population live in regions highly vulnerable to at least one climate-related hazard.
Along with Bangladesh, the Indian economy is the market in our study most exposed to climate risk in the years to 2030 under a 1.5 °C warming scenario. This is because India is at risk from climate damages that are likely to happen regardless of global emission reductions such as extended periods of drought and increased rainfall. It therefore needs the highest level of adaptation investment in the study. This investment could generate USD13 of economic benefit for every dollar invested, partly as India’s current level of adaptation measures and historic levels of adaptation investment are lower than many other large economies, so big gains are still there to be made.
In terms of areas of adaptation focus, India will be looking at infrastructure resilience and strengthening early warning systems, while also protecting land from droughts and flooding through water resource management and dryland agriculture crop production. Mangroves – shrubs found in tidal and coastal areas with complex root systems – can play an important role, providing protection against natural disasters such as cyclones and tsunamis on the east and west coasts of India.
[1] Climate Change in the Indian Mind, 2022 - Yale Program on Climate Change Communication
USD4.0bn (0.34% of 2021 GDP)
USD39.0bn
USD6.8bn (+70% compared to 1.5 °C)
As a nation made up of thousands of islands and with 81,000km of coastline, Indonesia is highly vulnerable to the impacts of climate change. According to the IPCC, the impacts of global warming on Indonesia include long-term changes such as temperature increases, rising sea levels and changing rainfall patterns as well as extreme events such as flooding and droughts.
Indonesia is one of the markets in our study at most risk. Without higher investment in adaptation, it can expect to take a significant hit to GDP over the next decade under a 1.5 °C warming scenario.
Priority areas for adaptation in Indonesia include protecting peatland systems and ocean-based and inland aquaculture systems. Financial measures are needed to address increasing flood-related risks to agricultural production. Indonesia will also need to invest in structural and non-structural measures for flood management to improve drainage systems and flood warning systems.
11x
USD200mn (0.18% of 2021 GDP)
USD2.2bn
USD400mn (+100% compared to 1.5 °C)
Kenya has suffered devastating droughts in the past few years, destroying crops and causing mass displacement. An investment of just USD200 million dollars in adaptation by 2030 – the lowest amount in our study – would prevent climate damages and lost GDP growth of USD2.2 billion by the end of this decade.
Adaptation efforts in Kenya will need to be wide-ranging, encompassing the country’s energy, infrastructure, land use and environment, health system, water and irrigation, agriculture and tourism sectors. Reforestation is needed, as well as clean energy development, climate-smart agriculture and drought management. Data and information gaps must be closed to enable better environmental management, and continuing investment is needed in weather stations and monitoring systems. Improved monitoring, data and research should help improve risk assessments and agriculture and urban water-use management.
USD1.5bn (0.34% of 2021 GDP)
USD19.9bn
USD3bn (+100% compared to 1.5 °C)
Nigeria is classified as one of the 10 most vulnerable countries in the world to the impacts of climate change and natural hazards. In 2022, widespread flooding impacted hundreds of thousands of people across more than 30 Nigerian states.
Nigeria faces severe damages even under a 1.5 °C warming scenario, as the country is prone to floods, storms, ocean surges, droughts and wildfires. Nigeria could see a USD13 return for every dollar invested in adaptation this decade, partly as its existing level of adaptation measures is low, which means that significant gains remain to be made.
The World Bank’s 2021 Climate Risk Country Profile suggests that Nigeria needs to focus on promoting and facilitating ways of managing exposure to extreme heat and associated health risks, while also establishing an early warning system to deal with human diseases associated with climate change. Nigeria also needs improved water and waste management facilities to maximise both agricultural and urban water-use efficiency. The World Bank highlights the need for Nigeria to improve information and forecasting surrounding extreme weather events, including strengthening flood monitoring and modelling to inform disaster risk planning.
USD600mn (0.17% of 2021 GDP)
USD7.6bn
USD2.1bn (+250% compared to 1.5 °C)
Pakistan faces some of the highest disaster-risk levels in the world. Heavy monsoon rains and melting glaciers caused devastating floods in Pakistan in 2022, leading to loss of life, displacement of people and food and clean drinking water shortages.
Our study shows that Pakistan would need significantly higher levels of adaptation investment under a 3.5°C scenario, emphasising the importance of global mitigation efforts; rising temperatures would trigger changes to rainfall and run-off regimes and increase flood risks.
Pakistan currently has a moderate level of adaptation measures in place but could expect to see a USD13 return per dollar of adaptation investment. In a 1.5°C warming scenario, the minimum investment required to keep pace with damages as they occur this decade is USD600 million, whereas inaction could cost the Pakistan economy USD7.6 billion.
Without adaptation, millions of people will face flooding annually. Pakistan is also likely to suffer increased drought, affecting key crops like cotton and wheat. Agriculture alone employs nearly 40 per cent of Pakistan’s workforce and contributes over 22 per cent to its GDP, making potential climate impacts and adaptation needs in the sector a high priority.
The country will need to focus on improving management of water resources and strengthening flood risk management in vulnerable areas. Sustainable management of watersheds and mangrove forests is highlighted as a key focus by the World Bank, alongside upgrades to waste management, safe water in urban areas and enhanced disaster resilience.
12x
USD2.7bn (0.75% of 2020 GDP)
USD31.5bn
USD9.8bn (+263% compared to 1.5 °C)
The vast majority of the UAE’s population and infrastructure is on the coast, making it particularly vulnerable to the impact of rising sea levels. And – as the nation is already dealing with extreme temperatures and water scarcity – temperature rises will have a significant impact.
Even if global warming is limited to 1.5°C, the UAE will need to invest a minimum of USD2.7 billion to adapt to climate damages as the occur this decade. However, the cost of inaction would be twelve times higher – USD31.5 billion by 2030 – providing a strong incentive for action.
In terms of areas of adaptation focus, the UAE’s National Climate Change Adaptation Program has identified the importance of improving seawater quality, as it has been impacted by increased water temperature and acidity. The government also indicated that future adaptation efforts must target the increased demand for water and electricity which will accompany rising temperatures and humidity levels. Food supply and production has also been identified as a focus area.
15x
USD8.9bn
USD1.1bn (+83% compared to 1.5 °C)
As a country with low-lying coastal and river delta regions, Vietnam is prioritising coastal flooding risk when it comes to adaptation to climate change.
According to our study, Vietnam will need to invest a minimum of USD600 million this decade to keep up with climate damages as they occur. However, the economic benefits will be 15 times greater than that, or USD8.9 billion, as damages are avoided, and GDP is able to grow more strongly.
According to the World Bank, Vietnam needs to focus its adaptation efforts on building disaster risk management capacity, for example, by improving water resource planning and water-use efficiency in drought-affected provinces, as well as biodiversity conservation and increased uptake of sustainable agricultural practices. The Vietnamese government has also emphasised the country’s need for adapted infrastructure and changes to agricultural approaches to deal with the impacts of climate change. Indirect economic benefits of adaptation investment are the highest in Vietnam – adaptation investment results in substantial economic growth in the country.
