As the wild card in the future of the Asia Pacific's economic development, climate change is emerging as one of the most significant priorities for policymakers.
Weather-related insurance losses have increased around the world, but most visibly in North America and Asia. In eastern Asia, average losses every year have doubled over the last decade to more than $20 billion, according to Munich Re, a reinsurance company.
Since 1970, climate-related natural disasters have cost US$259 billion (S$324 billion) to China, $64 billion to Japan and $15 billion in South Korea, according to the Economics of Climate Change in East Asia report released last year by the Asian Development Bank.
That's less than 0.2 per cent of GDP, but the incidence of natural disasters and their cost is rising.
According to the World Bank, climate change can: Decrease the amount of water available and its quality; lead to more floods or droughts; cut water regulation in mountains; make hydropower less reliable and limit biomass production; lead to more waterborne diseases like malaria, dengue and cholera; increase the number of deaths from extreme weather events and the destruction they cause; hurt fisheries and damage ecosystems.
Earlier this year, climate change was a major discussion point at the World Economic Forum in Davos, and is likely to be part of the agenda during another meeting in Tianjin in September, says Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University. Lin was part of a panel at the WEF to consider the challenges and possible solutions to deal with climate and resource risks.
The context is significant. A new report by the Intergovernmental Panel on Climate Change released this year by the United Nations said that it may be difficult to stop mean temperatures from rising by 2 C.
"When you talk about Asia, it is mainly talking about China. No countries can compete with China in terms of scale. Though India has a large population, its energy consumption is low, so its contribution to emissions is limited," says Lin.
"Those dynamic increases (of carbon emissions) are mainly from China, so China's problem is also the world's problem."
Lin says China can be more confident on this issue now, since it has taken action to tackle smog and its environment is getting better. "The policies against the smog problem basically target the energy industry－more specifically, coal. The contribution from coal to the economy must decline annually. This is in line with the reduction of CO2 emissions.
"We have been talking about rejecting economic structure and reducing CO2 emissions for a long time, but the real economy would always choose the most cost-effective way－that is coal. It has no motive to make the change as any alternation is more expensive than coal," Lin says.