Asia is at a crucial point. Climate change is affecting the region’s water and power systems, impacting billions of lives and requiring significant financial investment. Two important reports highlight these challenges.
- Asian countries will need $4 trillion for water and sanitation infrastructure by 2040. However, they face a $150 billion annual funding gap.
- Extreme weather could cost Asia-Pacific power companies $8.4 billion each year by 2050, which is a 33% increase from current losses.
- Since 2013, Asia has seen 244 major floods, 104 droughts, and 101 severe storms. This has wiped out much of the development progress made in the last few decades.
The stark reality is that nations must raise about $250 billion each year between 2025 and 2040 to meet urgent needs for clean water and sanitation. Currently, funding only meets 40% of this requirement, leaving a dangerous gap that affects millions around the region.
Extreme weather events are not just numbers; they are affecting lives daily. In central Vietnam, Hai Duong, a 29-year-old, was left stranded after Typhoon Kalmaegi caused massive flooding, trapping her in a shopping mall as she sought to charge her phone and check on her family.
“I can’t go back because my home is underwater. I just want to see if my relatives are safe,” she shared, echoing the fears faced by many.
The report presents two sides of Asia’s story: on one hand, 2.7 billion people now have access to basic water needs; on the other hand, over 4 billion still lack safe water. Much of the improvement in water access has come from rural development efforts, especially in India, which has connected 800 million additional rural residents to piped water since 2013.
Vivek Raman from the Asian Development Bank (ADB) describes this as “a tale of two realities.” He warns that three main factors—environmental pressures, inadequate investment, and climate change—are threatening water security across the region.
Environmental conditions are worsening too. Water ecosystems in 30 out of 50 countries in Asia are deteriorating due to pollution and urban development. This has led to Asia experiencing 41% of global flooding, with coastal cities increasingly vulnerable to rising sea levels and storm surges.
While the dangers are clear, some experts believe there’s an opportunity amidst the crisis. Amit Prothi from New Delhi’s Coalition for Disaster Resilient Infrastructure mentioned that the next three decades will see as much new infrastructure built in Asia as was constructed in the last two centuries. This could be a chance to rethink how infrastructure is developed.
In terms of energy, Asia’s power utilities currently lose $6.3 billion annually due to extreme weather, a number expected to rise significantly without better adaptation strategies. This is vital for a region that generates 60% of the world’s electricity.
“Most companies are at very early stages in preparing for these risks,” said Anjali Viswamohanan from the Asia Investor Group on Climate Change.
Recent assessments of power plants across several Asian countries show that extreme heat poses the biggest threat, likely causing more than half of the projected losses by 2050. The risk of flooding and drought is also high, impacting both coal and hydropower generation.
Despite the growing threats, most utilities lack solid plans for adapting to climate changes. Research shows that while many companies assess climate impacts, only a few consider how those changes could affect costs and revenues.
Jakob Steiner, a geoscientist at the University of Graz, shared that the energy sector may attract more investments compared to water infrastructure, though caution is needed. Some nations might resort to less ethical financing options if they feel pressured by stringent environmental regulations.
“There’s more hope for closing the financing gap in energy, but it can come at a cost,” he warned.
The cost—financial, environmental, and human—will shape Asia’s future. The pressing question is not whether the region can fund climate-resilient infrastructure, but rather whether it can afford not to.
