Climate change threatens Asia’s water and power systems, warn reports
- Last updated: December 8, 2025 | 14:14
Climate change is battering Asia’s water and power systems and putting millions in harm’s way, forcing countries to pour billions into shoring up basic services, according to two recent reports.
Water-related disasters are rising across the region even as spending to protect communities falls short. Asian nations will need $4 trillion for water and sanitation between 2025 and 2040 - about $250 billion a year, the Asian Development Bank said in a report released Monday.
Governments are under growing pressure to protect power systems people rely on every day. By 2050, extreme weather could leave listed power companies in Asia-Pacific with about $8.4 billion a year in damage and lost revenue, a third higher than now, according to recent research by the Hong Kong-based non-profit Asia Investor Group on Climate Change and the New York-based MSCI Institute, a sustainability think tank.
Those risks have been playing out this year across Asia as it was pummeled by late-arriving storms, relentless rains and severe floods.
In central Vietnam’s Quy Nhon, power lines snapped when Typhoon Kalmaegi blasted the coastal city with heavy rain and strong winds. Floods from the relentless downpours left streets submerged under chest-high water days later, turning entire neighborhoods into islands. The day after the storm made landfall, Hai Duong, 29, rushed to a mall that still had power to charge her phone.
"I can’t go back because my home is underwater. I just want to see if my relatives are safe,” she said.
The ADB report says 2.7 billion people, about 60% of the Asia-Pacific population, have access to water for most of their basic needs but more than 4 billion still remain exposed to unsafe water, degraded ecosystems and escalating climate hazards.
Much of the progress since 2013 comes from major gains in rural water access, it says. About 800 million more people in rural areas now have piped water, helping many countries move out of the lowest level of water security. India played a big part in this shift.
But Asia faces a triple threat: environmental pressures, low investment and climate change, said Vivek Raman, principal urban development specialist at the ADB and a lead author of the report. "It’s a tale of two realities,” Raman said.
The report says water ecosystems were rapidly deteriorating or stagnating in 30 of the 50 Asian countries that were studied, plagued by unchecked development, pollution and land being converted to other uses. Asia also accounts for 41% of global flooding and its coastal megacities and Pacific islands face mounting threats from storm surges, rising sea levels and salty water pushing inland. From 2013 to 2023, Asia and the Pacific experienced 244 major floods, 104 droughts, and 101 severe storms - events that undermined development gains and caused widespread damage.
Governments currently meet only 40% of the estimated $4 trillion in investment, or roughly $250 billion annually, in funding needed for water and sanitation from 2025-2040. That leaves an annual shortfall of over $150 billion.
Asia’s rapid growth is both an opportunity and a challenge said Amit Prothi, director general of New Delhi-based Coalition for Disaster Resilient Infrastructure, who was not involved with the report. "The amount of infrastructure we’ll build in Asia in the next three decades will be as much as what was built in the last two centuries. So, this is an opportunity to rethink and build in a new way,” he said.
The coalition found that $800 billion in infrastructure, about a third of it in Asia, is exposed to disasters each year globally.
Extreme heat, floods and water shortages are already costing Asia’s power utilities $6.3 billion annually, a figure projected to exceed $8.4 billion by 2050 if companies fail to strengthen climate adaptation measures, research by the Asia Investor Group on Climate Change and the MSCI Institute shows.
Asia accounts for 60% of the world’s power generation capacity and remains deeply reliant on coal. The report warns that climate changes threatens both energy security and economic growth across a region where over 4 billion people need reliable electricity.
"Overall, if you were looking at the types of impacts and the preparedness of companies, most companies are at very early stages,” said Anjali Viswamohanan, director of policy at the Asia Investor Group on Climate Change.
Its study of 2,422 power plants across China, Hong Kong, India, Indonesia, Japan, Malaysia and South Korea found extreme heat to be the costliest hazard, responsible for over half of all losses by 2050. Heatwaves reduce power plant efficiency and strain transmission networks. India’s main power utility NTPC, Indonesia’s PLN, and Malaysia’s Tenaga Nasional all face a high risk of disruptions caused by rising heat.
Another major threat comes from declining river flows in Asia’s major basins, which supply the water needed by coal and gas plants and fuel hydropower dams.
At the same time, heavy rainfall and flooding also pose risks, especially in coastal and riverine regions. Malaysia’s Tenaga Nasional faces some of the highest coastal flood exposure due to power plants built in low-lying areas, the report said.
Despite mounting hazards, most utilities lacked detailed, funded plans for adapting to climate impacts. The report found that while nine companies of the 11 studied assessed how climate change impacts them, only seven examined risks at individual plants. Just five calculated and disclosed how future climate impacts could raise costs or hurt their earnings.
Rapidly shifting climate risks make it hard to predict the costs and insurance needed to protect energy infrastructure, said Jakob Steiner, a geoscientist affiliated with the University of Graz, who wasn't involved in either report.
Financing gaps in the power sector may be easier to close than those in water and sanitation, since energy projects can attract strong industry interest and investment, he said. But some countries daunted by demands from international investors for environmental safeguards might turn to regional financiers that are less scrupulous about such concerns.
"For energy infrastructure, I see more hope that the financing gap can be closed,” he said. "But that can also come at a cost.”
Associated Press