The Sunday Leader

Flooding The Economy

  • Climate Change To Slash Up To 9% Off South Asian Economy Every Year!

by Wiraj Silva & Amavasya Sirisena

With Sri Lanka facing the worst-ever floods in 27 years, Sri Lankan economy has begun to feel the pinch of climate change. The government appealed for foreign assistance to recover from gigantic floods that caused an estimated Rs 300 billion or approximately US$ two billion worth of damage. This is close to a staggering 2.43% of Sri Lanka’s GDP of Rs. 11,183.2 billion (US$ 82.3 billion) recorded in 2015.

The worst flood coupled with deadly landslides in three decades claimed over 84 lives damaging  a staggering of 35,000 houses, with another 116 missing. Nearly 237,240 people have been displaced from their homes and have moved to 376 ‘safe locations’, including camps, schools, temples, community centres, with host families or in other temporary accommodation.  Time and again both economists and sustainability experts have emphasized the importance of environmental sustainability.


Need for sustainability leadership

Sri Lanka’s national leadership should be committed to sustainability, integrating sustainability into government policy and strategy if the country’s corporate sector and the public at large too were to become conscious of sustainability, a top Sri Lankan advocate of sustainability – Dr. Ravi Fernando opined way back in 2013.

“We need sustainability leadership.  Sri Lanka needs a sustainability leadership that is totally committed to the subject, that which can lead national policies and strategies embedded with sustainability.  Once such national policies are in places businesses would be pushed to absorb and enshrine them (into their strategies) moving into sustainable businesses. Till national sustainability policies and business strategies are in place, the consumer will not have sustainable options. So I think there’s a sequence to this process and this must start from the top end, that is from sustainability leadership itself,” said Dr. Fernando winner of 2007 Global Strategy Leadership Award.

Emphasizing the importance of embedding sustainability into national and corporate strategy, Fernando pointed out that Sri Lanka was the first nation in the world to come out with sustainability integrated strategy.  “We Sri Lankans were the first country in the world to have an environmental strategy. King Parakramabahu the  Great, way back in 12th Century AD said ‘not a drop of water shall run into the oceans without being used’. We have had the world’s best rain water collection system way started back in by King Pandukabhaya 4th Century BC. We can always be proud and tell anyone in the world that we have a heritage that is richer than any one of you are talking about.”

(Dr. Fernando will be spearheading a ground-breaking seminar on ‘Seven Imperatives For Sustainable Business’ on June 15 – see Page 27)


Sri Lanka among worst prone to climate change – ADB

Sri Lanka is among the countries expected to be worst affected by climate change, with adverse effects on all sectors of the economy, increasing the country’s vulnerability and threatening its overall growth and development, says the Asian Development Bank in its publication ‘Assessing the Costs of Climate Change and Adaptation in South Asia’ (

Highlighting the aspects such as the sea level rise, higher temperatures, enhanced monsoon precipitation and runoff, more intense tropical cyclones and storm surges, floods, droughts, and salinity intrusion experienced over the recent past, the ADB says the country’s geophysical and socio-economic characteristics tend to exacerbate the impacts of these phenomena.

Overall, the climate change will slash up to 9% off the South Asian economy every year by the end of this century if the world continues on its current fossil-fuel intensive path. The human and financial toll could be even higher if the damage from floods, droughts, and other extreme weather events is included, adds the ADB.

“… total economic loss due to climate change for each of the six countries of South Asia in 2050 and 2100, respectively. The model suggests that the Maldives, being the most vulnerable among the six countries, will be hardest hit in GDP loss. The mean outcome of the simulation indicates that the economic damage will be around 2.3% of GDP in 2050, ranging between 0.9% and 5.0% of GDP within the 90% confidence interval. By 2050, annual GDP losses are projected under the BAU scenario for Bangladesh (2.0%), Bhutan (1.4%), India (1.8%), Nepal (2.2%), and Sri Lanka (1.2%).”

“In the longer term, the total economic costs associated with climate change impacts are likely to increase in all countries. If no action is taken to adapt to and mitigate global climate change, the average total economic losses are projected to be 9.4% for Bangladesh, 6.6% for Bhutan, 8.7% for India, 12.6% for the Maldives, 9.9% for Nepal, and 6.5% for Sri Lanka (Figure 28). The Maldives could encounter as high as 38.1% GDP loss equivalent (5% chance). Long-tailed distributions of economic impacts are found for all the countries, meaning that catastrophic events could happen, though with low probability.”


Real GDP Impacts of Climate Change in South Asia

Paddy cultivation affected

With the disruption of agriculture and transportation of food, government is to release its buffer stock of rice (188 million bushels), adequate for two months with importing of rice being a most likely possibility in the near future, in order to avoid food shortages.

Tropical and subtropical regions of Bangladesh, Bhutan, India, and Sri Lanka are projected to be vulnerable to increasing temperature and CO2 level, with a decline in rice yield of as much as 23% by 2080, notes the report.

In the wet zone, solar radiation may limit the rice yield during the Yala season (April–August, the drier season) due to high cloud cover arising from the southwest monsoon circulation; a similar situation could occur in the dry zone during the Maha season (October–January, the period with heavy rainfall) due to overcast conditions that may result from weather systems in the Bay of Bengal and the northeast monsoon circulation.


Economic damage and losses

Economic findings using integrated assessment model suggest that the total climate change cost in South Asia will increase over time and will be prohibitively high in the long term. Without global deviation from a fossil-fuel-intensive path, South Asia could lose an equivalent 1.8% of its annual gross domestic product (GDP) by 2050, which will progressively increase to 8.8% by 2100 on the average under the business-as-usual (BAU) scenario. The model suggests that the Maldives will be hardest hit in GDP loss, while Bangladesh, Bhutan, India, Nepal, and Sri Lanka are projected to face 2.0%, 1.4%, 1.8%, 2.2%, and 1.2%, respectively, loss of annual GDP by 2050. The report noted that nearly 26% of Sri Lanka’s coastline is prone to erosion whilst  … ‘landslides are bound to increase, causing debris flow in the rivers and threat to lives and infrastructure. Increased coastal erosion and landslide occurrence will accompany increased rainfall and intensified cyclones predicted with climate change.’

Sri Lanka’s coastal region covers about 23% of the island’s land area (Coast Conservation Department 2006) and accommodates about 25% of the population, in addition to a heavy concentration of urban areas, tourism infrastructure, and industries that are vulnerable to impacts of sea level rise and increased frequency of storms and the intensification of coastal erosion due to climate change.

Much of the coastal zone lies within the dry zone, with an average annual rainfall of 1,250–1,750 mm and a temperature of around 28°C–320C (Survey Department 2007). Sri Lanka is vulnerable to the risk of sea level rise and increased frequency of storms that can have major impacts on coastal ecosystems that support the marine food fishery. The increasing variability in temporal and spatial distribution of rainfall as well as the increasing temperature affect coastal areas and inland waters that are important for the food fishery industry.


Rainfall and temperature affected 

All three scenarios agree that Sri Lanka precipitation is likely to increase over the three time periods: by 3.6%–11.0% in 2030, 15.8%–25% in 2050, and 31.3%–39.6% in 2080. The ensemble mean from the GCMs indicates a 5%–10% increase by the end of the 21st century, with low agreement. The rainfall projections therefore have low confidence.

Sri Lanka receives its highest rainfall (about 60%) during two seasons: the southwest monsoon and second intermonsoon period. Reservoirs used for hydropower normally recharge during these periods. Annual average rainfall has decreased over the last 57 years at about 7 mm per year, resulting in water scarcities in the dry zone (Rathnayake, et al. 2009). Lower rainfall during the first intermonsoon and changes in rainfall generally have affected hydropower generation (Rathnayake et al. 2009). This puts additional stress on the already insufficient energy resource base; this is in addition to high transmission and distribution losses. Increasing temperatures also mean higher demand for cooling buildings.

Regional climate model projections for future temperature indicate consistent increases: 1.0°C–1.1°C in 2030, 1.3°C–1.8°C in 2050, and 2.3°C–3.6°C in 2080. The ensemble mean indicates a temperature increase of about 2.0°C–3.0°C by the end of the 21st century, with a high degree of agreement (high confidence) among the CMIP3 models.



climate change effects on rainfall regimes could put stress on the water resources. The vulnerability of water resources in Sri Lanka is intensified due to several factors other than climate change. These factors include saltwater intrusion in coastal areas due to overextraction of water from tube wells; overuse of ground and surface waters for irrigation and hydropower; reduced recharge of groundwater due to heavy runoff, coupled with minimal area for surface absorption as a result of expansion of built-up areas (mainly in urban areas); degraded water quality due to pollution of surface and groundwater with nitrates, industrial effluents, and agrochemicals, and spread of aquatic weeds in surface waters; lowering of water quality due to encroachment and inappropriate activities in water supply catchment areas; increasing pressure from population expansion and urbanization; and agricultural practices that require increasing amounts of water. In addition, there is an increase in sedimentation of rivers due to deforestation in catchments and riverbanks, improper cultivation practices in upper catchment areas of river drainage basins, and river sand and gem mining in catchment areas that results in increased siltation of tanks and reservoirs and reduction of water holding capacity.

Climate change increases competition for water resources used for irrigated agriculture and public use. This will mostly affect marginalized groups that have limited capacity to adapt to changes in their environment, especially when their incomes, health, and general living conditions are affected. Large-scale river diversion schemes have affected the longterm stability of water flow in rivers, and land-use changes in catchments have increased seasonal floods and siltation of water bodies.

A study by the Ministry of Environment and Natural Resources (2008) shows that availability of irrigation water is highly vulnerable especially in the dry zone due to the increase in droughts and the high dependence of agriculture. Vulnerability of drinking water to drought is also widespread. The south/south–central, northwestern, and northcentral regions of the country are particularly vulnerable. Drinking water vulnerability to floods is prevalent in many areas of the country. Such areas have limited access to piped water and rely heavily on groundwater, resulting in high incidence of water-borne diseases.


Forests and other ecosystems

The vulnerability of forests and other ecosystems is increasing due to pollution and siltation from unsustainable land-use practices, including deforestation; agricultural runoff; over-extraction of water for irrigation; illegal sand mining; monoculture on steep lands, which causes large-scale soil erosion; large-scale logging in the already fragmented wet zone forests; salinity intrusion into coastal areas; degradation of coastal ecosystems, such as mangroves, lagoons, and estuaries due to unsustainable fishing practices; overexploitation of resources; pollution; unauthorized encroachment and land reclamation; and coral mining and coral death due to bleaching from high temperatures.

Increasing population density puts pressure on natural ecosystems and species, especially in the species-rich wet zone where forests and wetlands are surrounded by human settlements. The boundaries of the dry zone may spread into the intermediate zone and the latter may spread into the wet zone under climate change.


Impact on agriculture

Currently, more than 26,100 square kilometers of Sri Lanka are under agriculture. Much of the agricultural land is located in the water-deficient dry zone, where productivity of crops depends entirely on rainfall. The varied climatic conditions in farming systems have given rise to a wide range of crop species that are suited for varied conditions of soils, rainfall, and altitude as well as to diseases and insect pests.

Vulnerability of the agricultural community to climate change will be influenced by several socioeconomic factors, including level of poverty and food security, insecurity of land tenure, education levels, dependence on agriculture for livelihood, availability of irrigation water, supporting institutional framework, and government policies. Farming districts with heavy reliance on primary agriculture, few infrastructural and socioeconomic assets (or low adaptive capacity), and high level of exposure to historical hazards are the most vulnerable (Eriyagama et al. 2010). The vulnerability of rice crops to droughts is expected to increase, especially in the dry and intermediate zones. Tea plantations at low and medium elevations are more vulnerable to impacts of climate change than those at high elevations. Reduction of monthly rainfall by 100 millimeters (mm) could reduce productivity by 30–80 kg of tea per hectare (Wijeratne et al. 2007).

Extended dry spells and excessive cloudiness during the wet season can reduce coconut yield, with annual losses of $32 million to $73 million. However, during a high rainfall year, the economy could gain by $42 million to $87 million due to high coconut yields. Future projections on coconut yield suggest that production after 2040 may not be sufficient to cater to local consumption (Eriyagama et al. 2010).


Fisheries industry

Vulnerability of the fisher community to climate change will be influenced by several socioeconomic factors, including status of poverty and food security, education levels, present level of resources, alternative livelihoods, institutional support frameworks, and government policies. Some other factors that may aggravate vulnerability include use of unsustainable fishery practices (e.g., light fishing, blast fishing, and large-scale purse seining); overfishing; oil pollution from boats and ships; damage to mangrove and coral reef habitats due to overuse of mangrove resources, blasting of coral reefs, anchorage of boats near coral reefs, and dragging of nets; and haphazard construction and expansion of piers and fish landing points, which affect water flow and cause siltation of coastal waters and habitats. Some indirect activities that also increase the vulnerability of the coastal resources are sedimentation caused by inland soil erosion and land degradation; reclamation, sedimentation, and dumping of garbage in lagoons and estuaries; and construction of coast protection structures that alter patterns of sand movement.



Sri Lanka has not reached its optimal potential in terms of nutrition status of the population. Climate change is envisaged to have severe impacts in terms of growth and development of children and productivity of older age groups and future generations. Vulnerability of the health sector is intensified by dumping of solid waste, which creates unhygienic and vector breeding conditions, in contaminated surface and groundwater; over-extraction of such resources as groundwater; poorly managed agriculture and land use; unplanned settlements, which lead to unsanitary conditions; poorly managed urban infrastructure, which enhances the spread of disease; and lack of political will and resources to effectively address issues. Some socioeconomic factors that could increase vulnerability include income insecurity, which hampers access to appropriate nutrition, sanitation, and medical facilities, and induces mental stress; inefficient use of water due to lack of awareness; low education levels among poorer communities and lack of awareness on simple sanitation techniques to prevent spread of disease; and low disaster/epidemic response capacity due to lack of a response mechanism and lack of coordination.

There has been a drastic increase in dengue in Sri Lanka with reported cases reaching 34,054 in 2010. Annual dengue incidence under the A2 scenario could increase to over 353,000 by 2090 with over 2,000 fatalities (Table 19). Annual malaria morbidity across the country by 2090 under the A2 scenario could reach almost 100,000 with 1,700 deaths (Table 19). Under climate change, increase in rainfall intensity can cause water logging and thereby create favorable conditions for mosquito breeding. In addition, vulnerability of the health sector is amplified by other factors, including dumping of solid waste that contaminates surface water and groundwater and also creates vector breeding conditions; poorly managed urban drainage also enhances the spread of disease.


Climate change management

The simultaneous objectives of combating climate change and achieving sustained economic growth for poverty alleviation and other Millennium Development Goals are gauge challenges for Sri Lanka. Addressing these challenges requires urgent action – increased and institutional capacity, and stronger government and private sector policies.

Climate change management will be a complex and highly interactive responsibility involving close coordination among all sector ministries. For both adaptation and mitigation, the development and enhancement of Sri Lanka’s institutional and human resource capacity will be essential in managing investments and identifying intervention areas for research and knowledge management. To this end, Sri Lanka can access technical and financial support from key development partners, such as the Asian Development Bank, states the publication.

According to the report, the impact and cost of climate change in South Asia will depend largely on how the global community tackles the issue.


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