The Philippines should intensify policy actions and increase investments supportive of climate change adaptation to reduce economic losses and human costs due to severe environmental disruptions, according to a new report from The World Bank.

The Philippines Country Climate and Development Report (CCDR), launched on November 9, paints a chilling picture for the economic future of the country, the world’s most vulnerable to climate change risks, unless policy action is taken now to avert huge economic losses and human suffering.

As data show that temperatures in the Philippines continue to rise and rainfall patterns to grow more intense and erratic, the impact will be felt the most in crucial key sectors, said Benoit Bosquet, regional director for East Asia and Pacific of The World Bank, in his presentation of the report findings and recommendations.

These sectors are water, agriculture, energy, transport and urban areas. Bosquet said climate change will hurt the water sector, for example, because the changing water flows and quality will affect irrigation, industry and domestic uses, impacting the entire population which depends on water services.

Another important sector that will see serious consequences is agriculture, which will witness a decline in the productivity of many crops. CCDR expects a 5% reduction in the yield of rice and sugarcane “but potentially as much as 20% for maize across the three main regions.” The lower agricultural production will affect the wellbeing of farmers and drive up food prices, Bosquet said.

“The economic damages in the Philippines could reach up to 7.6% of GDP by 2030 and 13.6% of GDP by 2040. All sectors will be affected, with capital-intensive sectors likely to suffer most from extreme events, and agriculture suffering the most from slow-onset trends,” he said.

But it is fortunate that the country also has many feasible and cost-efficient options to dramatically mitigate climate change impacts, he added.

He said adaptation should be the priority action. This calls for reducing the risk and damage from extreme events such as those generated by typhoons and addressing slow-onset events like higher temperatures and sea level rise.

Adaptation measures in agriculture, infrastructure and human capital can reduce the economic losses from climate change by around two-thirds, while investment in such measures could boost short-run GDP by 0.7%. All sectors will benefit from adaptation, with benefits being highest in capital-intensive industries, Bosquet explained.

He likewise highlighted the need for policy action including an accelerated decarbonization plan that targets an 80% reduction in annual carbon dioxide emissions by 2040, mainly through “adopting and boosting the country’s solar and wind power potential and retiring coal-fired power plants more aggressively.”

An accelerated energy transition toward a renewable-energy dominated power system will enhance affordability of electricity and reduce air pollution in the Philippines, said Bosquet.

He added that responding to climate change involves a three-pronged approach. One approach is to make sure incentives to the private sector are in place, such as by providing direct support to climate-smart actions and providing clear information on the cost of climate change and the benefits of climate action.

Another is to improve the effectiveness of government climate actions by strengthening coordination at all levels of government, enhancing the capabilities of local government units to design and implement climate actions, and focusing on effective implementation of existing plans and regulations.

Moreover, it is vital to help the people cope with the effects of climate change and climate actions.

Said Bosquet: “It’s important that the poor and vulnerable people will receive the means to cope, in particular through good adaptive social protection to provide targeted relief to those who are affected.” This involves providing training for green jobs, improving the resilience of the education system, and implementing climate-sensitive health policies.