Climate change costs growing

Charles Rollet

The economic impact of climate change in Cambodia could be highly damaging to rural areas and worker productivity, according to a report from American development agency USAID, which applied climate projections for 2050 to today’s Mekong Basin economies.

The study, released on February 19, shows that the economic cost of future climate change – including damage to infrastructure – could put up to 61 per cent of the Kingdom’s rural GDP per capita at risk.

That places Cambodia significantly ahead of the next most vulnerable country, Laos, at 50 per cent, and much higher than Thailand, at 14 per cent.

But despite the effects of climate change on the rural sector being well-publicised, the report’s author, John Talberth, said one of the most overlooked consequences was worker productivity.

“There has been little attention paid to losses in worker productivity in climate adaptation discussions in the region, but it makes complete sense when you think about it,” said Talberth, in a statement.

“There are tens of millions of outdoor workers that are likely to experience greater levels of heat stress and heat-related illnesses when temperatures start rising above 40C.”

The report states that 7.4 million Cambodian agricultural workers and about 240,000 in construction would be adversely affected by 2050’s climate projections, causing a total economic
impact of $1.5 billion.

But Yang Saing Koma, director of the Cambodian Center for Study and Development in Agriculture, said climate change’s effect on worker productivity would mostly be because of water shortages rather than heat illnesses.

“The infrastructure is still not dealing with climate change, as we need to ensure farmers have access to water,” he said.

“If the rainfall is low, this could affect agricultural production and tap into the whole of the economy, as Cambodia is severely dependent on agriculture.”

Dave Welsh, country director of the Solidarity Center, a US-based labour rights organisation, said climate change could add on to the woes of the majority of Cambodian workers who work in the sun.

“Everyone focuses on the plight of garment workers, but most Cambodians work outside, and outside of labour laws,” he said.

The study also estimated the economic impact of future climate change-influenced flooding on Phnom Penh and Kandal at over $4 billion, or more than a quarter of Cambodia’s current GDP.

“The economic impacts of climate change in the Lower Mekong Basin are expected to be wide ranging, significant, and mostly negative,” the study reads.

In June of 2014, ratings agency Standard & Poor’s rated Cambodia’s economy as the most vulnerable to climate change, stating that global warming would be the “second global mega-trend affecting sovereign credit risk”.

But Talberth said adapting to these changes now could be done on the cheap, with investment estimated at 56 cents per person, while the cost of climate change itself runs to $267 per person in the lower Mekong Basin by 2050.

So far, however, independent agriculture economist Chan Sophal says rural infrastructure “is still very much insufficient to meet the current needs, and the challenges of climate change”