Global economic slowdown threatens sustainability progress in Asia

A report by the Asian Development Bank (ADB) states that global economic uncertainty is undermining the commitment of Asian countries to the creation of environmentally sustainable economies at a time when the region’s environmental threats are increasing. Growth in the region has led to large-scale climate change and environmental degradation. Governments in the areas are now attempting to reconcile such growth with the demands of COP21 and the Sustainable Development Goals. However, many remain concerned that the adoption of low-carbon measures will hinder economic prosperity. The report claims that the most "immediate and serious" environmental problems facing the region are air pollution, waste management, soil erosion, biodiversity reduction and species extinction.

MANILA, PHILIPPINES —The uncertain global economic outlook threatens to undermine the resolve of countries in Asia to implement urgently needed investments and policies to help put their economies on an environmentally sustainable growth path, warns a report by Independent Evaluation at the Asian Development Bank (ADB).

At the same time, “pressures on the environment in the region are pervasive and growing,” says the report, Environmentally Sustainable Growth: A Strategic Review.

It notes that Asia’s remarkable growth performance has been achieved at the expense of massive environmental degradation and climate change. With the past pattern of growth now widely accepted as unsustainable, governments are striving to achieve lasting growth that takes better care of the environment and stalls climate change—goals reinforced by the Sustainable Development Goals and last December’s Paris agreement on climate action.

“Meeting the challenge of runaway climate change requires a rapid transition to a low-carbon path, but many countries remain ambivalent about this choice because of concerns this will come at the expense of economic growth and shared prosperity,” says Vinod Thomas, director general of Independent Evaluation at ADB.

The report’s main author, Andrew Brubaker, acknowledges that stepping up to the plate with investments and policies to help achieve environmentally sustainable growth—such as by expanding access to clean electricity where coal is readily available—is a tall order given the global economic outlook.

“The recent lowering of global growth projections by the International Monetary Fund and other institutions is unnerving policymakers,” says Brubaker. “But it would be false economics to delay decisions promoting environmentally sustainable growth and climate action.”

Brubaker notes that worsening environmental conditions are increasingly affect social cohesion, as manifested by demonstrations over worsening air pollution in Beijing and Delhi. Similarly, low water security and the effect of more frequent and intense droughts threaten the livelihoods of the rural poor in South Asia.

ADB stakeholder perception surveys over the past several years show environmental degradation and climate change rising in prominence as a threat to development in the institution’s 67 member countries. In the latest survey, this placed second in a ranking of nine development threats (after corruption); in 2006, it placed eighth.

The report identifies the most “immediate and serious” environmental threats facing Asia as urban air pollution, lack of proper solid waste management, degradation of fresh water resources, soil erosion, destruction of biodiversity habitats, and the mass extinction of species.

Says Thomas: “These have the potential to reverse the region’s impressive economic progress, reduce the quality of life, and even cause pandemics—and this, in essence, is the reason why countries must not delay in putting their economies on an environmentally sustainable growth path.”

The report notes that Asia’s demographic and economic growth is predominantly an urban phenomenon, with cities now accounting for about 80% of the region’s gross domestic product. As a result, the adverse effects of climate change and related impacts on air, water, and soil quality are primarily experienced in urban areas. By 2050, Asia’s urban population is expected to nearly double from 1.6 billion in 2010 to 3 billion, putting additional stresses on infrastructure and natural resources.

“As the benefits and costs of Asia’s economic growth manifest themselves most visibly in cities, addressing urban environmental issues and improving urban resilience is a key challenge,” says the report. Yet it notes: “The growing acknowledgement of increasing environmental degradation in Asia has not been matched by sufficient action.”

The report—which examines ADB’s performance in promoting environmental sustainability in the projects and programs that it helps finance—says the institution’s long-experience in Asia and the Pacific and growing emphasis on environmental projects, including some innovative ones addressing urban air quality, biodiversity conservation and clean energy provide a “solid entry point” for helping countries implement their contributions to the Sustainable Development Goals and the Paris agreement on climate action.

The entry of new lenders for development—the Asian Infrastructure Investment Bank and the New Development Bank of BRICS countries will provide more and much-needed financing for infrastructure, a core ADB area in which the institution can leverage its expertise in environmental sustainability and climate action.

“ADB has laid a foundation that will enable it to become the environmental sustainability bank for the region,” says the report. However, it will be important that ADB’s current focus on climate change, while providing both direct and indirect environmental benefits, does not crowd out action on other urgent regional environmental challenges such as biodiversity loss, water stress, and urban air pollution.

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To read the evaluation report, visit http://www.adb.org/documents/environmentally-sustainable-growth-strateg… and download the main report.

About Independent Evaluation at the Asian Development Bank

Asian Development Bank's Independent Evaluation, reporting to the Board of Directors through the Development Effectiveness Committee, contributes to development effectiveness by providing feedback on ADB's policies, strategies, operations, and special concerns in Asia and the Pacific.

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