International Economic Policies: Climate Change Impact on Asia's GDP

This research paper investigates the impact of climate change on the GDP of Asian nations. It explores the direct effects on industries, particularly those with high emissions and the transportation sector, leading to supply chain disruptions and impacting organizational performance. The study focuses on how climate change affects agriculture, a significant contributor to Asia's economy, and analyzes the influence of governmental environmental policies and restrictions on businesses. The paper examines the challenges in empirical observation, the limitations in available statistical data, and the application of the Green Economics theory to understand the interplay between climate change and economic factors. The research utilizes PESTLE and SWOT analyses to assess political, economic, social, technological, legal, and environmental factors, alongside strengths, weaknesses, opportunities, and threats. The conclusion emphasizes the vulnerability of developing nations in Asia, the challenges in resource utilization, and the potential impacts on GDP. The research acknowledges limitations such as the need for primary research and time constraints. This report is a valuable resource for understanding the complex relationship between climate change and economic performance in Asia.

INTERNATIONAL
ECONOMIC POLICIES

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Contents
Introduction...........................................................................................................................................2
Research Question.................................................................................................................................2
Theory, methodology or literature review.............................................................................................3
Conclusion.............................................................................................................................................6
Limitations.............................................................................................................................................6
References.............................................................................................................................................7

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Introduction
Climate change has not only affected the population’s health but also had impact on the
nation’s and region’s economy. It has a direct impact on the GDP of the nation. It is a
worrisome situation for the countries that aims to do good as the industries in these nations
are not able to perform as per their maximum capacity as they are under restriction over the
conventional mechanism (Bosello, Eboli and Pierfederici, 2012). It is to be understood that
climate change has a direct impact on the industries which releases higher amount of gases
and other pollutants. The transportation industry is also affected and due to this the supply
chain is compromised. It will have impact on the organisational performance. In Asia,
agriculture contributes high in the economy and the GDP of the nation and since production
in the agriculture is affected by the change in the climate hence it is having impact on the
overall GDP of the nations. In this research paper there will be analysis about the impact of
climate change on the GDP of the nation.
Research Question
The research questions that this will address is:
 To find the impact of the climate change on the GDP of Asia.
Hypothesis
H0: There is no impact of the climate change on the GDP of Asia.
H1: There is impact on the climate change on the GDP of Asia.
Empirical phenomenon that can be studied in this research is that whether the GDP of Asia is
affected by the climate change. There are some data that illustrates that there is impact on the
business due to change of climate. The challenges in the empirical observation is that the data
does not depicts that the impact on the GDP is only because of the climate change as there are
many other factors that is having impact on the GDP. Statistical background was not easily
available in this area.
The literature in this research will illustrate about the slowdown in the developing nation due
to increasing restriction over the business due to governmental environmental policies. The

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literature here also suggests about the steps taken by government to protect climate change
which has impact on the growth of the Asian subcontinent. The current literature in this
research does not suggest about the exact trend and the quantitative analysis and hence
predicting future condition and the impact of the climate change on the GDP of the nations in
Asia.
Theory, methodology or literature review
Mirza, (2011) suggests that climate change has affected the GDPs all across the globe. It is to
be understood that Asia consists of many developing nations including two global players
like India and China. Due to the change in the climate there are many steps that have been
taken by the governments to save environment. Government like India have ban on single use
plastics have also affected many businesses negatively. It is because of this that many of the
manufacturing and other business activities in which there is larger amount of carbon
emission occurs is banned.
According to Bandara and Cai, (2014), greater the carbon emission, greater will be the impact
on the global climate. The weather patterns have changed so significantly that there was huge
loss of lives and other property in different countries of Asia. In the shadows of Paris summit
on climate change many of the developing nations have made strict policies regarding the
way a company should reduce the carbon emission.
According to Chandrappa, Gupta and Kulshrestha, (2011) it is also seen that Asia is one of
the biggest producers of Agriculture products and due to climate change there is untimely
rainfalls or high temperatures are destroying the crops. Due to this the contribution of
Agriculture on the GDP has reduced. Asia is having larger part of its population as middle
class or poor hence they aim for those products that are available at lower cost but as the
companies had to change their operational mechanism hence the cost also goes on the higher
side.
As per Calzadilla, et al (2014) Asia is one of the fastest developing continent in the world
hence the impact of the climate change will be highest on these nations only. As per Zhai and
Zhuang, (2012) the effect suggests that in the Asian region 11% of the region’s GDP will be
decreased by the end of century especially because of the fact that three major sectors such as
tourism, fishing and agriculture will be highly affected by the climate change. There is an
average increase in the temperature of Asia has effected the production of the rice and by

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2100 it will reduce by 50%. Calvin, et al (2012) has a view point typhoons and floods have
become very common in the Asian region which is having greater impact on the business
especially the ones that are related to environment. Lal, et al (2010) believes that there is still
a very large employee set in these nations that are not highly skilled which can add to
pollution.
Here the theory that will be utilised is Green Economics theory. This theory fit in the
empirical finding as these two theories explains the different factors that is having impact on
the business operations especially in terms of collecting data about the way in which GDP of
Asia has been affected due to change in the climate.
According to Cato, (2012) green economics theory suggests that economics gets impacted by
the changes in the climate hence most of the countries are trying to impose economics that
aims to protect the environment. In this all those things are promoted that aims to reduce the
carbon emission. For the companies that are not doing so there is implementation of the green
taxation which will have impact on the growth of the organisation. This theory also suggests
making better interactions with the nature so that there is long term and effective utilisation
of nature.
Ruamsuke, Dhakal and Marpaung, (2015) suggests that in the utilisation of the green
economics there must be use of sustainable transports, renewable energy, waste management
etc. All these have impact on the pace of the growth of country as these changes require
investment of resources. It is hard for the developing nations of Asia to easily implement
these because of the financial and resource related constraints. But as the international
pressures on the developing nations are increasing hence they are under pressure to
implement these changes hence having significant impact on the GDP (Paltsev, et al 2012).
Analysis
It is to be understood that global warming has become a major concern for the countries in
Asia and hence businesses are reducing the ways in which they are dealing with their
operations. For example in Asia there are many small scale industries that are working and
since these small scale companies do not have efficient technologies or processes that could
reduce the carbon emission but due to government policies these companies had to shut down
and since they are the major contributors to the GDP of any nation hence it has been effected.
PESTLE analysis

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 Political: Governments have implemented policies that will have effect on the way in
which organisations will do their processes and hence it had impact on their
productions. Governments have increased the tax on the products whose production is
cause of large carbon emission. Sustainable and transparent mechanism of work is
promoted by the government and is enforced on the companies so that government
can look at their internal work process.
 Economic: People are facing scarcity of water in the towns as the rainfall patterns
have changed and due this it become difficult for the companies to ensure regular
flow of raw materials.
 Social: Asian region as most of the countries are developing hence energy demand is
increasing for which coal is their major source of energy which again creates huge
carbon emission on which there is restriction hence GDP is affected.
 Technological: On the contrary Mendelsohn, (2014) suggests that higher use of
technology has somewhat positive impact on the climate change. This is because
technology helps in better utilisation of resources and at the same time it ensures that
lesser amount of pollution takes place.
 Legal: Punishments for avoiding or violating environmental laws have become stricter
and at the same time heavy fines have been implemented on the companies violating
the legal constraints. This had impact on the way organisations are doing their work.
 Environmental: Sudden change in the environment has made the crops vulnerable to
get damaged.
SWOT analysis
Strength
 There are lot of investments coming in these countries hence there is a chance that
new technologies will also come that will have greater chance to react to climate
change.
 Higher amount of crops are grown in this part hence more loss will be faced by the
farmers and hence economy due to uneven climate change.
Weakness

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 They have weakness in terms of the fact that there are large amount of poor living in
these nations and hence any measures have to be taken ensuring that there is lesser
chance that there is no increase in the cost of products.
Opportunity
 There are large numbers of innovations going on in this region which can provide
opportunity for the countries to tackle the environment related challenges.
 Suggests that since there are large amount of area that is covered by forest hence their
chance of protecting the environment enhances.
Threats
 As per Sovacool, et al (2012) huge economic burdens on these countries will act as
threat for investing on economic patterns that could help in reducing the environment
related challenges.
 Threat is also the fact that there is race of getting ahead of the competitor countries
which is resulting in improper utilisation of resources and hence pollution gets higher.
Conclusion
This research illustrates that Asia has large numbers of countries that is developing and hence
there is improper utilisation of natural resources. The climate change has affected the regular
availability of resources especially the ones that comes from nature like agricultural farms.
The effect is both on productivity and quality of the resources. This had an effect on the
company’s businesses and hence impact can be GDP of the Asia. Since most of the firms had
to change the methodologies hence lower cost production can be difficult to achieve and
since most of the people in this region have lower earnings hence foreign products will be
more appreciated. In the time to come these numbers will increase in the coming years.
Limitations
While doing this research, there are limitations faced such as the fact that since it is a
secondary research but there was need of primary research which on this scale is not
practically possible. Second limitation was the fact that there was time constraint hence it was
not possible to analysis the articles that is related to individual nations in Asia.

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References
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Ruamsuke, K., Dhakal, S. and Marpaung, C.O., 2015. Energy and economic impacts of the
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