South-east Asia may be ready for this El Nino – but tackling climate risk is still urgent

Even with improved mitigation measures, governments in South-east Asia must still address the core issue of carbon emissions. Wildfires in southern France last July forced evacuations and disrupted operations for key aerospace firms including Thales and Airbus Atlantic. In South Korea, extreme heat has claimed over 20 lives and caused sickness in 2,400 others, while farmers are now required to work fewer hours.

Japan's Toyota temporarily closed nine factories due to Typhoon Dolphin, which brought strong winds and heavy rain.

Across the planet, extreme weather events are demonstrating the social and economic consequences of climate change. In South-east Asia, the approaching El Nino phenomenon could lead to reduced yields of high-value crops like rice and corn in the Philippines, and potentially higher costs for ingredients such as wheat, coffee, sugar, and cocoa. This could fuel inflation and dampen demand. The risk of severe trans-boundary haze is also increasing, particularly in Kalimantan and Sumatra where wildfires have already started.

However, mitigation measures can help reduce the impact of El Nino. Malaysia has recently released guidance on heat-related hazards for workers in outdoor jobs and those near heat-generating equipment. Improved water management practices, such as better irrigation and switching to less water-intensive crops, are also expected to help South-east Asian economies handle agricultural risks from El Nino-induced drought.

Governments are also adjusting planting schedules to avoid the dry spell in the Philippines and saltwater intrusion in Vietnam's Mekong Delta.

S&P Global suggested in a report on August 4 that stronger early-preparedness frameworks can help South-east Asia manage the economic fallout of climate disruption. The analysts praised regional initiatives that are boosting intra-Asean coordination on issues like drought. United Nations Secretary-General Antonio Guterres warned that El Nino, driven by higher Pacific Ocean surface temperatures, is "adding fuel to a planet already on fire."

It is crucial for governments at both the national and regional levels to take action regarding the primary driver of climate change: carbon emissions.

Although Southeast Asia contributes less than 7% of global greenhouse gas output, its net emissions have steadily grown over the years. A 2021 Asean Secretariat report recommended adopting low- to zero-carbon energy sources and enhancing land-based carbon sinks to achieve net-zero emissions. However, recent discussions around carbon markets, which trade credits to price emissions, could potentially pose risks of over-reliance on carbon offsets.

This may undermine direct emission reduction efforts and raise questions about the credibility of traded credits.

Singapore's Minister for Sustainability and the Environment, Grace Fu, stressed the need for a balance between economic development, social services, and environmental protection in the country's climate adaptation strategy. This balancing act is essential, and it must be done promptly.